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Understanding creditors’ voluntary liquidation
A creditors’ voluntary liquidation (CVL) is an arrangement reached to ensure the voluntary winding down of a company and the liquidation of its assets in order to settle its debts. A CVL can only be pursued once there has been a meeting between directors, creditors and company members.
Once this meeting has taken place an insolvency practitioner is appointed for the purposes of liquidation, meaning that the company ceases to trade and directors and shareholders lose the power to influence events. Once a CVL has been entered, directors are legally obliged to cooperate with all reasonable requests made by the liquidator.
Why creditors’ voluntary liquidation?
There are many reasons why it may be beneficial for a company to enter creditors’ voluntary liquidation. These include the following:
- A CVL can help maximise assets
- A CVL can help minimise losses
- A CVL can help minimise creditor complaints
- It gives shareholders and directors the opportunity to address issues of personal liability
Simply.Law – for insolvency legal advice
Understanding of the key legal and financial issues is critical to the survival of any business facing insolvency, creditors voluntary liquidation or similar financial concerns. Simply.Law’s insolvency solicitors specialising in CVLs and CVAs bring you confidence and clarity by offering clear and concise legal advice to help you maximise your assets and minimise your debts.
Find the specialist solicitor who is right for you by using our Match Service, browsing our member profiles or talking with an advisor today.
