Creditors Voluntary Liquidation or CVL is when the shareholders or directors of a company make the decision to close it by placing it into liquidation because they’re unable to pay their debts.

A CVL is a terminal process for the business and isn’t to be entered into lightly. 

As it’s a formal, legal insolvency process it has to be carried out by a licensed Insolvency Practitioner.

Companies can be placed into voluntary liquidation in as little as two weeks and we’ll take over dealing with the creditors from the very start of the process.

Members Voluntary Liquidation (MVL) is a voluntary closing-down process initiated by the shareholders of a solvent company who want to close the company and release cash and assets in the most efficient way.

It’s usually initiated by those looking to close the company and release cash and assets in the most orderly and tax efficient way.

It’s a relatively straightforward process and can be concluded in as little as ten days or
sometimes even less.

If your clients main hurdle to profit is making their monthly debt repayments in full and on time then it might make more sense to tackle these debts holistically with a CVA.

A Company Voluntary Arrangement (CVA) is a formal insolvency process agreed between a company and its creditors where, in return for a proportion of debts being written off, the company agrees to pay back a lower proportion of the remaining collective debt in those regular monthly instalments until cleared.

It’s a way for a company to remain trading and have certainty around its debt while it restructures itself to hopefully come out stronger and more profitable at the end of the process – and debt free.

If a CVA fails or if the problems at a client require a more complicated and serious response than writing off a proportion of debt then a full administration process could be the answer for them.

Administration is a formal insolvency process that puts a company under the
control of an external administrator to see if the company can be rescued and
if the owners can turn things around. 

Alternatively a pre-pack administration sale can often be arranged if it is the best outcome for all parties.

Administrators can be appointed by directors, shareholders or even floating
charge holders and other creditors. The administrator’s job is to protect their
interests and if the business can’t be saved, they will close it and look to sell company assets to obtain the best value for creditors.