Creditors’ Voluntary Liquidation is a formal insolvency procedure available to insolvent limited companies. If your company has entered insolvency you need to protect the interests of your creditors, and CVL allows you to meet these obligations.
By voluntarily placing your company into liquidation, as opposed to waiting for a creditor to make a winding up petition at court, you prevent further creditor losses and adhere to the stringent requirements under insolvency law.
Apart from the importance of prioritising creditors, you can also protect yourself and other directors from allegations of wrongful trading by entering a CVL. You have more control over the process in terms of timing and the liquidator appointed, and may also be eligible to claim director redundancy.
Here’s a checklist for Creditors’ Voluntary Liquidation to provide an outline of the different stages of the procedure. The time it takes to liquidate a company largely depends on the complexity of its affairs, including the number and type of assets.
Part of the liquidator’s role is to investigate how the company failed, and uncover any specific reasons why it had to enter insolvent liquidation. They’ll look for instances of wrongdoing or misconduct that could have led to the company’s demise. Having entered liquidation voluntarily, however, you’ve clearly placed the interests of your creditors first and so are unlikely to face allegations of wrongful trading.
In addition to gaining more control over the liquidation process, entering CVL could also enable you to claim director redundancy pay. For more information and advice on Creditors’ Voluntary Liquidation, please contact our team at Real Business Rescue to arrange a free, same-day consultation.
We’re insolvency experts and will offer the clear, reliable advice you need. We operate an extensive network of offices around the country, so you’re never far away from professional assistance.
If you are considering liquidation for your limited company, taking advice from a licensed insolvency practitioner can help you understand your options.
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If you are considering liquidation for your company, taking expert advice at an early stage is crucial. At UK Liquidators, our team of licensed insolvency practitioners are committed to providing limited company directors with the help and advice they need to make an informed decision.
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