Creditors Voluntary Liquidation (CVL) - The Details

Our clients always ask us what is Compulsory Liquidation or Creditors Voluntary Liquidation? Simply both of these processes to stop a company from trading and to liquidate the company's assets for the benefit of the company's creditors.

Normally in order for the company's creditors to consider a CVL or for the directors to consider Compulsory Liquidation the company will typically have no cash and unable to pay its debts.

Very often the directors do not believe in the long term viability of the business and are concerned about the possible implications of wrongful trading.

If you have already decided to liquidate your company then we will be able to assist in starting the CVL process as quickly as today!

We will also answer all of your questions such as;

• Can I liquidate my company and still be a director?
• Could I liquidate my company and start the same business again?

Creditors Voluntary Liquidation - an overview

Firstly, we are never in favour of liquidating a company before all the other options such as an CVA, Pre-Pack or Administration have been considered!

If your company is struggling and you have spoken with your accountant, lawyer or financial advisor it is likely that they may have put you into contact with an Insolvency Practioner who may of suggested that liquidation may be the best option particularly if you as a director are concerned over being made personally liable for your company's debts. In our experience most Insolvency Practitioners generate work on the back of advising directors of the dangers of wrongful trading and personal liability of a company's debts.

In our opinion this is not necessarily wrong advice but very often it is equally not the best advice.

Creditors Voluntary Liquidation is only appropriate under certain circumstances. Such circumstances may include;

• When your business is Insolvent
• you as a director do not believe the business is viable
• the market conditions for your company's product or service have un-recoverably declined
• the directors have lost the will and determination to battle on