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What is a Creditors Voluntary Liquidation (CVL) ?
A CVL is a voluntary process initiated by the directors and shareholders of a company, having recognised that it cannot pay its liabilities, as and when they fall due.
It is usually seen as an option when a company’s financial position has deteriorated to a point of no return or when directors want toclose a companyandstart afresh, or simply just walk away.
In such circumstances, directors have a duty to act in the best interests of the Company and its creditors, to protect their position.
What is a Members Voluntary Liquidation (MVL) ?
An MVL, or a solvent liquidation, is a process which facilitates the wind down of a solvent business, in a structured manner and which allows shareholders to extract funds in the most tax efficient way.
In an MVL all creditors must be paid in full together with statutory interest and any surplus is paid to the Company’s shareholders.
Our team will work with you and assist to implement the MVL process to ensure that funds are distributed to creditors and shareholders within a relatively short period of time.
What is a Company Voluntary Arrangement (CVA) ?
A Company Voluntary Arrangement can only be implemented by an Insolvency Practitioner who will draft a proposal for the benefit of creditors.
If the core of a Company is viable but finds itself insolvent, by reason of circumstances such as a bad debt, or poor trading conditions, then its directors can call a meeting of creditors for them to consider proposals for a partial or deferred payment in respect of historic debt.
In most instances if a CVA is approved by creditors, the Company will continue trading.
This is a Court driven procedure designed to allow a Company breathing space whilst it is protected from aggressive actions of creditors.
During this period the Company will prepare and present proposals to enable it to do one or all of the following statutory purposes:
If a Company has no assets or liabilities and has not traded for 3 months, then it can apply for voluntary strike-off.
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