Company Voluntary Liquidation

Professional advice on insolvent liquidation

What is a Creditors’ Voluntary Liquidation (CVL)?
A CVL is used to close a company that is insolvent and cannot pay its debts. Once the decision is made, the company should cease to trade immediately and not worsen the position for the creditors. You will not be liable for the company’s debts, unless as a director you have given personal guarantees.

The CVL process:

Speak to one of our licensed insolvency practitioners in Epsom
They will discuss and review the company’s position – the difficulties it has faced, the assets and liabilities and the viability. They will then go through the options and if the company cannot be saved then they will advise you on liquidation.

Collation of information – the insolvency practitioner will need to be provided with:
  • List of creditors – names, addresses, amounts
  • List of assets
  • Bank account information and balance
  • Employees’ details – names, addresses and amounts owed
  • Company history and the reasons why it has failed
From the information, the insolvency practitioner will advise on which decision procedure is used to place the company into liquidation – deemed consent or virtual meeting. (New insolvency rules came into effect on 6 April 2017, changing the way creditors are involved in the process.)

Notices to creditors
The insolvency practitioner shall despatch notices to creditors advising on the impending liquidation and providing creditors with information on the company, including a statement of affairs (the assets and liabilities of the company and the likelihood of a return being paid). They will also note the decision procedure being used with a decision date (within 14 days).  

Decision date
The shareholders will first pass resolutions to place the company into liquidation. A minimum of 75% of the shareholders need to vote.
For creditors, if deemed consent procedure is used, the liquidation should automatically start on the decision date; if it is a virtual meeting, then the creditors are given the opportunity to question the directors at the meeting and vote on the appointment of a liquidator.
Liquidation starts and a liquidator is appointed

The liquidator will carry out the following:
  • Realise the company’s assets
  • Correspond with the creditors and the employees on the progress of the liquidation and if funds allow, agree claims and pay a distribution
  • Investigate the company’s affairs and the conduct of the director(s)
  •  Conclude the liquidation
collection of information
business deals
handshaking
Need more information about voluntary liquidation?

Call Cullen & Co in Epsom 0203 8877 200
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