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What is a CVL?

Thinking of getting a CVL? Contact us to see if this is the right option for you. 

Helping you to understand the process of a Creditors' Voluntary Liquidation (CVL)

A Creditors' Voluntary Liquidation, also known as a CVL, is a formal insolvency procedure involving the directors of an insolvent company who voluntarily choose to bring their business to an end, by winding the company up. 

How to Get a CVL

A CVL can only be entered into under the guidance of an appointed liquidator, the liquidator must be a licenced insolvency practitioner. Here, at Moore UK we have a team of licenced insolvency practitioners who are able to assist you in the CVL process. 

What Happens During a CVL?

Your appointed Insolvency Practitioner will be able to handle your CVL process from start to finish. The insolvency practitioner will have to carry out a number of roles and responsibilities during the CVL process these include;
  • Identifying company assets
  • Liaise with outstanding creditors
  • Ensure the company is shut down correctly 
  • Remove the name of the company from the register held at Companies House 
Once the process of a CVL has begun all trading must cease and employees are then made redundant. If you are considering a CVL You must also be mindful of the implications for you as a Director.

Continuing to trade an insolvent company without proper planning and consideration puts you at risk of being liable for claims of wrongful trading or misfeasance. These claims are made against you personally and not the company.

Before exploring if a CVL is the right option for your business we suggest you speak to a member of our
insolvency team. 

The Benefits of a CVL

It is never a pleasant task of closing your businesses doors. But when a company can no longer be rescued it is often better for directors and creditors to start the CVL process as soon as possible. 

Below are some benefits to a CVL:
  • A CVL can stop further legal action 
  • Quickly removes creditor pressure
  • Allows your employees to claim their unpaid wages and redundancy pay from the Government
  • Can provide a lifeline that a business will need, to be able to continue trading under a different legal entity 

Is a CVL the Right Solution For You? 

A CVL may be the solution to the company’s insolvency but other alternatives must and should not be ruled out before placing the company into a CVL, these include:

  • An informal arrangement with creditors
  • A formal arrangement with creditors (Company Voluntary Arrangement)
  • Administration
  • Pre-pack Administration

How We Can Help You 

If you feel as though your company is struggling to meet its liabilities to creditors, and is facing a dramatic downfall in its financial status, then the Moore Restructuring and Insolvency Team can help you. 

We are able to advise you on how the CVL can be best applied to your company and as we are licensed and regulated to carry out the process we are able to manage it for you from the start to finish.