Creditors Voluntary Liquidation (CVL)

A Creditors Voluntary Liquidation (CVL) is the winding up of an insolvent company.

  1. A CVL is initiated by the Directors and Shareholders, who decide the company is insolvent, and pass a resolution to this effect (and also appoint a liquidator).
  2. These directors pass a resolution that meetings of the company’s shareholders (known as members) and creditors are convened.
  3. This is done to place the company into liquidation, because they decide the company is insolvent, and to appoint a Liquidator.
  4. The directors nominate a Licensed Insolvency Practitioner to assist in this process and accept the appointment as Liquidator.
  5. At the meeting of members the resolution to wind up the company must be approved by a 75% majority of members voting at the meeting, either in person or represented by proxy.
  6. The company ceases to trade and any assets will be realised by the liquidator for the benefit of creditors.

View the Creditors Voluntary Liquidation Case Studies here.

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