Creditors' Voluntary Liquidation (CVL)
A CVL is an insolvent liquidation procedure instigated by the Company's directors. It is typically undertaken when there is little or no likelihood of the business being saved as a going concern. The liquidation will typically involve the immediate cessation of the business and the sale of its assets by auction.
Usually with the assistance of an Insolvency Practitioner the directors would call a meeting of shareholders and creditors with a view to putting the Company into liquidation and appointing a liquidator
This is where a petition is presented to court for the Company to be wound up. The petition can be presented by the Directors, the Company itself, or a creditor of the company and, as in a CVL, is typically utilised when there is little to no likelihood of the business being saved as a going concern.
Advantages of Liquidation include:
Members Voluntary Liquidation (MVL)
An MVL is a solvent liquidation. This means that the company is in a position to pay all of its liabilities in full, within 12 months of a declaration of solvency. A situation where an MVL may be appropriate is where a company has been set up for a specific purpose and that purpose has been acheived.
The potential advantages of an MVL will depend on the specific circumstances of both the company and the shareholders.
For further information regarding an MVL and to discuss all options available to you please contact one of our advisors on 0141 274 2044.