A creditors’ voluntary liquidation (CVL) is a process that is instigated by the directors of the company. It can, therefore, be commenced at any time once a director has identified that the company is insolvent. The benefit of a director initiating this process is that it can be achieved in a more controlled fashion, which typically improves realisations, helps employees, and evidences that you are taking positive steps to deal with the situation and avoiding making matters worse for creditors.
Whilst the process is initiated by the directors it is the shareholders and not the creditors that make the decision to place the company into CVL.
The liquidator’s job is to identify, realise and collect in the assets of the company for the benefit of its creditors.
The liquidator, once appointed, takes over all the executive powers of the company and is given additional powers by statute to investigate the affairs of the insolvent company.
Once the investigations and assets have all been dealt with the liquidator is released and the company is dissolved at Companies House.