Insolvent Liquidation (CVL)

Creditors’ Voluntary Liquidation (CVL) – this is the most common used insolvency procedure in the UK for businesses that are insolvent. As the name suggests, it is a voluntary process, led by the directors of the company but a licensed insolvency practitioner will be instructed to guide the directors through the formal procedure and then act as liquidator of the company.

Although it is a voluntary process, it is typically used after the business and its directors have explored all other options.

The company will cease to trade and the appointed liquidator takes control of the company. Broadly, the liquidator’s role is to realise the assets of the company, deal with all statutory formalities involved and if there are surplus funds to enable a return to be paid to creditors, to adjudicate on creditor claims and pay a dividend, before dissolving the company.