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Complete Guide to Creditors Voluntary Liquidation or CVL

Liquidation is when a company stops trading and its assets are "liquidated" and turned into cash to pay back the creditors.

Creditors Voluntary Liquidation is started by the directors, they tell the shareholders the company is not viable, it is insolvent and they must stop trading. The shareholders then ask a licensed insolvency practitioner to call a creditors meeting as soon as possible (not less than 14 days notice is required, but its usually 21 or so days). At this meeting the creditors vote to appoint a liquidator.  These meetings are usually held virtually unless this is explicitly requested by at least the following;

  • 10% by value of creditors or
  • 10% in total number of creditors or
  • 10 individual creditors

Then a physical meeting can be held.  In the current Coronavirus crisis, no meetings can be held. 

Liquidation can help you to end the worry. The process stops creditor pressure and worries, end those sleepless nights and ultimately help you get on with your life.

Read our detailed liquidation guide for more free information, or you can download our free 50 page PDF guide.  

When is it necessary for the directors of the company to think about Voluntary Liquidation?


  • The company has run out of cash
  • Creditors are threatening a winding up petition or other legal action
  • The company appears to not be viable
  • The company cannot pay its debts on time
  • The directors are concerned that the business may build up more debts. 
  • They are also worried about wrongful trading.


How will a Voluntary Liquidation stop my worries?

Voluntary Liquidation enables you to wrap up your company quickly and professionally. You can then become director of another company once the liquidation process is complete, but there are restrictions on the re-use of the company name. You will no longer be authorised to trade under an identical or similar name - it could lead you in court if you do so.  It is worth noting, if as a director you have been compliant and on the payroll for many years, you can actually claim redundancy from the government like any other employee. Ask us about this.

Voluntary Liquidation Process Step by Step

Step 1

Find a liquidator. We have a number of licensed insolvency practitioners at the firm. Uniquely to KSA Group, YOU can speak to one of our IP's TODAY, if you call now on 08009700539. It is not legally possible to liquidate your own limited company!

Step 2

Pass details of any company assets over to the proposed liquidator, and our valuers may get these valued. This will independently set the value of the assets for going to auction, or you may wish to buy them.

Step 3

Let us know who the company owes money to (creditors). KSA Group will write to them all to let them know what's happening and tell them that a creditors meeting will be held. The meeting can be held over the phone or online. This will quickly remove creditor pressure from YOU and they will start talking to KSA instead!

Step 4

Give us all company information and books and records. KSA Group will give you a list of all the information we need in order to liquidate your company. This information will allow us to prepare the necessary reports for the creditors.

Step 5

A company director needs to "chair the meeting of creditors". In actual fact the liquidator will run the meeting but you or one of your directors must attend it by law. The meeting of creditors is usually a simple short meeting with no one attending and can be done online or by phone conference.  From April 2017 though a physical meeting of creditors will not be summoned unless this is explicitly requested by at least the following;

  • 10% by value of creditors or
  • 10% in total number of creditors or
  • 10 individual creditors

What if there are no assets to pay for the liquidation?

This is a common question and one that indicates the directors have failed to control the situation carefully. Look, if there are no assets to pay a modest fee for the liquidation I would ask, where has all the money and assets gone? Surely you as directors knew (or ought to have known) that the company was facing failure and you therefore should have ACTED SOONER?

Most basic liquidations cost around £4-6,000 why then has the board of directors run the company into the ground to such an extent that there is not enough in the way of cash and assets to pay for this. REMEMBER as a failed limited company the assets DON'T BELONG TO YOU!

Therefore if you have had the benefit of the assets then it makes sense for the directors to pay for the liquidation process.

Related Guides

A Worried Director

The Ultimate Guide For Worried Directors

Worried about poor cashflow? How to win new work? How to pay wages on pay day? For expert advice on a range of issues download our free Ultimate Guide For Worried Directors today. Or just call us on 0800 9700539

Please note that the guide was written pre Covid-19 and there are some likely changes to insolvency rules regarding wrongful trading.  Please see this page here.​​​​​​​

Related News

Case Studies

Just a quick note to say a big thank you to all the staff at KSA, our CVA was passed today by creditors voting in an overwhelming number including HMRC to accept the proposal as prepared by KSA.

The road to reach today’s conclusion has been bumpy, but at each stage your team has supported and guided us through the issues and we have reached a very satisfactory outcome to the benefit of customers, staff, all creditors and shareholders.

Company name withheld

KSA Client

It's time to take back control

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