A CVL is an insolvency procedure available to companies in financial distress. This process is typically instigated by the Director(s), following consultation with an Insolvency Practitioner. A company is deemed to be insolvent when it is unable to pay its debts as and when they fall due and/or its liabilities exceed its assets. This is typically evidenced by an unsatisfied judgement debt, statutory demand or on a balance sheet basis where the liabilities exceed the value of its assets.
The process of placing a company into liquidation and appointing a Liquidator requires a meeting of the Company’s Members followed by a decision procedure whereby Creditors have the opportunity to vote on certain resolutions.
Key Facts:
- This is one of the more common forms of Insolvency Procedure.
- This is a voluntary process which gives the Director(s) more control over the process and outcome.
- Whilst recognised by the Courts, this is not a Court driven process and is relatively straightforward.
- Avoids necessity of creditors having to take legal action to wind-up Company.
- The process from instruction to liquidation can take from between seven and fourteen days.
- Once the Company is in Liquidation, responsibility over the Company’s assets and liabilities transfers to the appointed Liquidator.
- A liquidator will be appointed at the Members Meeting, although this appointment is subject to ratification or alteration by Creditors.
- Directors’ have a fiduciary duty towards a Company and a responsibility to avoid wrongful trading.
- The Director(s) are allowed to start trading through another Company subject to certain restrictions.
How we can help:
- We will arrange a free initial consultation with the Director(s) to evaluate the Company’s financial position, provide details of all options available, and make appropriate and bespoke recommendations.
- Explain the process adopted in detail and answer any questions or concerns.
- Liaise with creditors on the Director’s behalf.
- Convene the requisite Meetings and decision procedures on the Director’s behalf.
- Assist in the preparation of the statutory forms, report and statement of affairs.
- If appropriate, recommend agents to ensure a smooth and timely disposal of assets is achieved.