Whether a CVL is appropriate for your company depends on a range of factors including the financial position of the company, the likelihood of the business being able to return to a profitable position, and the desire of its directors to effect a recovery.
In some cases, liquidation is the only realistic option, particularly when it comes to ensuring you do not worsen the position of your creditors. For some businesses this may mean that they have to cease trade immediately in order to prevent further losses being accrued, while others may be able to continue to trade temporarily if this would allow for a better financial return for creditors.
Insolvency is a highly complex area therefore it is always advisable to seek the advice of a licensed insolvency practitioner at the early signs of insolvency. They will be able to assess the position of your company and help you understand your options. If liquidation is the most appropriate next step, they will be able to place your company into a CVL and ensure an orderly winding up of its affairs.
As a formal insolvency process, a CVL can only be entered into under the guidance of a licensed insolvency practitioner who will adopt the role of the company’s liquidator.
One of the main benefits of trading as a limited company is that directors are given the protection afforded by limited liability.
A Creditors’ Voluntary Liquidation – or CVL – is a formal insolvency process for insolvent limited companies.
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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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