A structured and responsible way to close an insolvent business, ensuring creditors receive fair treatment while allowing directors to move forward.
How Creditors' Voluntary Liquidation Works
Board ResolutionDirectors hold a meeting to conclude that the company cannot continue trading due to financial difficulties.
Shareholder Approval At least 75% of shareholders (by share value) must agree to the liquidation.
Appointment of an Insolvency Practitioner A licensed insolvency practitioner is appointed as the liquidator.
Creditors’ MeetingA meeting is convened with creditors, where they can vote to approve the liquidator’s appointment.
Asset Realisation The liquidator takes control of the company’s assets, sells them, and distributes funds to creditors.
Benefit of CVL
Closure & Relief Allows business owners to move on and potentially start anew.
Why choose CVL?
A company may enter Creditors' Voluntary Liquidation when:
- The company is no longer viable due to declining business performance.
CVL vs. Members' Voluntary Liquidation (MVL)
CVL Used when a company is insolvent and cannot meet its debts.
MVLSuitable for solvent companies where assets exceed liabilities, offering a tax-efficient distribution of remaining funds. Read about MVL