Creditors Voluntary Liquidation (CVL)
A Creditors Voluntary Liquidation (CVL) is the winding up of an insolvent company.
- 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).
- These directors pass a resolution that meetings of the company’s shareholders (known as members) and creditors are convened.
- This is done to place the company into liquidation, because they decide the company is insolvent, and to appoint a Liquidator.
- The directors nominate a Licensed Insolvency Practitioner to assist in this process and accept the appointment as Liquidator.
- 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.
- The company ceases to trade and any assets will be realised by the liquidator for the benefit of creditors.
Download further information here Creditors Voluntary Liquidation