What is Creditors’ Voluntary Liquidation (CVL)?

Creditors’ Voluntary Liquidation (CVL) is a solution for companies (and LLPs) that are in financial difficulty and are unable to pay their debts; and where despite the best efforts of the company directors there is no chance of a recovery.

As licensed insolvency practitioners we help directors to stop trading in a safe and structured way, communicate the situation to those affected, as well as manage the steps involved in placing the company into CVL. As appointed liquidators, we then sell company assets to pay those who are owed money (known as ‘creditors’) so that all those affected can move on to a fresh start.

How we help

What to expect from a free consultation?

CVL Steps


Free Consultation.

Speak with a licensed insolvency practitioner to confirm that CVL is right for you and your company.


Help to stop trading safely and communicate the situation to employees, creditors and those affected.

We support directors in the practical aspects of ceasing to trade communicating the situation to those affected including creditors, HMRC, and employees.

This includes securing assets, speaking with advisors, bringing records up to date and any other practical issues that need to be dealt with incl. redundancies and related claims


Coordinating placing your company into CVL.

We coordinate the associated steps necessary to place your company into CVL. This includes drafting all necessary paperwork and coordinating necessary virtual meetings of directors, shareholders and creditors.


Preparing a report on behalf of the directors to explain the situation to those owned money.

One of the most valuable aspects of the CVL process is that directors have the opportunity to explain the company’s background circumstances, current financial position, challenges, steps taken by directors and why it was the right decision to stop trading.

We draft a report to explain the situation to those affected and show that all steps taken were in the best interests of the company and its creditors. This report is circulated to creditors and shareholders as part of the CVL process.


Realise company assets to repay creditors.

As liquidators, we recover and sell any company assets and use the proceeds to repay those who are owed money (known as creditors), after costs


Conclude the liquation and dissolution.

Once all company assets have been realised we prepare and circulate a final report to creditors which confirms the outcome of the liquidation. This is also filed at Companies House, following which the company is removed from the register and dissolved.

How long does CVL take?

Our support starts from the moment we are approached to help and we can place a company into creditors’ voluntary liquidation in as little as 7 to 14 days.

From the very moment we are appointed liquidators of a company, we take charge, leaving directors free to rebuild and restart.

Once in liquidation it takes us on average seven months to a year to complete the process. Occasionally it can take longer if the asset recovery process needs more time.

What is a “pre-pack” liquidation?

‘Pre-pack’ insolvency sales refer to a situation where a sale of an insolvent company’s business and assets is negotiated to the company entering administration or liquidation. Once in administration or liquidation, the sale is completed by us as the appointed insolvency practitioners acting as either administrator or liquidator.

Key characteristics of pre-pack sales are:

Case study - retail business

A retail company opened its first store in 2004 and had successfully traded for many years, growing to five stores in multiple locations across London and the South East.

Unfortunately, between 2018 and 2019 sales fell sharply, and turnover dropped by around fifteen percent due to the uncertainty surrounding Brexit negotiations and its impact on consumer confidence. The company moved from making a net profit of £100,000 – £200,000 per year to suffering losses.

In response, the Company’s director implemented several cost-cutting strategies over all five of its stores, but trading continued to be challenging and was made worse by unexpected rental increases imposed by some of its landlords.

The director sought our advice on the insolvency options available for his Company. Following our review of the position, it was clear that, despite the best efforts of the Company’s director, ongoing trading was going to result in losses building up and a worsening position for the Company and its creditors. Unfortunately, trading was not viable, and the Company could not be saved.

We supported the director with ceasing to trade the Company’s business in a safe and structured way before things got worse. We also communicated the situation to those affected, and then placed the Company into Creditors’ Voluntary Liquidation (CVL).

As licensed insolvency practitioners we took on the role of liquidators once the Company was in CVL. It was our job to secure and sell the Company’s assets for the best value possible to contribute to repaying the Company’s creditors.

The director expressed an interest in purchasing the goodwill of the Company, being the trading name and its website, as well as its physical assets. Independent valuation agents confirmed that his offer represented good value and would achieve a better outcome than we were likely to achieve elsewhere.

With full disclosure to the Company’s creditors, we completed the sale of goodwill and assets to the director for the benefit of the Company and its creditors.

He has since restarted a new company which trades a smaller, sustainable business, using the assets he bought. The new company also trades with a similar name and trading style. This is generally prohibited, however, the director was able to do this legally as he bought the rights to the name and trading style from us as independent liquidators, for fair value and subject to full and appropriate disclosure by us as liquidators.

We understand that the director’s new company has had a positive start and is operating sustainably. It now can re-employ staff, continue to serve customers, contribute to the local economy, and rebuild supplier/creditor relationships over the long term.


To place a company into CVL can take as little as 7 to 14 days.

Once a company is in CVL and we take control as liquidators, a typical CVL is concluded within 7 months to a year. However, if required a CVL will continue as long as is necessary, for example where more time is needed to recover a company asset on behalf of creditors.

In the short period leading to liquidation, directors remain responsible for the affairs of the company. However, we will provide support and guidance for all the practical decisions and steps that will need to be taken in the lead up to liquidation, for example:

  • How best to cease trading
  • Staff communication and managing redundancies
  • Securing/safeguarding assets
  • Communicating with HMRC and other creditors
  • Dealing with customers
  • Practicalities of placing a company into CVL

Once a company enters CVL, we are appointed liquidators of the company. As liquidators take full control and responsibility for a company’s affairs and although the directors remain in office, their powers cease. The directors only requirement is to assist the liquidators in carrying out their role. That generally involves an initial handover of key information about the company at the outset, and being available to answer ad-hoc questions from time to time that may arise during the course of the CVL.

In the meantime, the directors are free to move on with their lives and re-start, whether that be building a new successor business or seeking employment.

In short, yes. It is a common misconception that if you are a director of a company that fails and enters liquidation or administration, you cannot be a director in the future, but this is not the case.

When a company is placed into administration or liquidation, there is an independent review of the company’s records and the decisions and actions of those who were directors in the last three years. From our experience, in the vast majority of cases directors act in good faith, seek help when they need it and generally act reasonably. If a mistake is made, and if reasonable steps were taken to recover the position, either at the time or even following insolvency, it is very unlikely that those involved will be barred from being a director in the future.

It is only in more extreme cases where directors fail to act, put their own interests ahead of others, or where there is persistently bad behavior, that they face being disqualified from acting as directors in the future.

Wrongful trading is trading whilst insolvent or whilst you ought to have known you were insolvent. Insolvent means unable to pay your debts as they fall due.

If wrongful trading results in a greater loss to creditors overall than had the directors acted sooner and taken professional advice from an insolvency practitioner, they may be required to personally contribute to the company in CVL to restore the position to what it would have otherwise been had they not continued to trade longer than they should have.

If wrongful trading takes place, this may also result from a director being disqualified from being a director again the future.

All company debts are dealt with by the liquidator. Assuming there are sufficient asset recoveries to pay creditors, the liquidators will review and agree to claims to ensure they are valid and then make a payment to creditors according to their class and priority.

Essentially where someone has provided a personal guarantee for company debt, assuming that it was properly entered into with the full knowledge and understanding of the guarantor, then they will have to settle any shortfall that the company in CVL cannot meet.

We can give guidance on how best to approach personal guarantees when they arise, subject to the specific circumstances.