What is Creditors Voluntary Liquidation or CVL

The costs of the process very much depends on the complexities of the case and the likely time it will take the Insolvency Practitioner to carry out their duties and responsibilities.  The main things to consider are;

1. The number of creditors and how much is owed.
2. How many employees there are
3. Are there any book debts to collect
4. How much investigation is needed into the company's affairs.

The costs of liquidation can put directors off but not doing anything is likely to cost you more in the long run!  Generally the costs start at around £3500 + VAT. This would be for liquidating a company with a single creditor, such as having an unpaid Bounce Back Loan (BBL) or HMRC. For more than one creditor issue, we would expect the fee to be approximately £3,750-4,000 plus VAT. For more complex issues including companies who have landlords, employees, BBLs and supplier debts we will provide a written quote after our meeting with the directors to discuss the company’s options. Do get in touch to discuss your company’s liquidation, don’t delay and hope the problem will go away!

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

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.

The appointment of a liquidator, which means that the powers of the directors cease, usually takes between one and two weeks.

It is possible, if 90% of the shareholders agree, to do a Creditors Voluntary Liquidation in seven days but this is rare. This is more likely to happen in the case of perishable assets such as fresh food.

However, the liquidators have to sell the assets etc, do investigations and file the necessary paperwork. This can take 1-2 years, if not longer. The bigger the liquidation, the longer it takes (usually).

If for some reason funds are found to pay back the creditors in full then it is possible to stop the process as long as assets of the company have not been actually liquidated i.e sold. However, this is extremely unlikely to happen.  If there is money suddenly available at the eleventh hour then it might make more sense to allow the company to go into liquidation and buy back the assets at a fair value. 

When the all the assets are sold, creditors reported to, and any monies paid over from the liquidation the company is struck off the register and effectively ceases to exist.  As the debts belong to the company the liability dies with the company.  However, if directors have personally guaranteed the company liabilities then creditors will be able to claim on these.  The liquidator will have investigated the conduct of the directors and assuming that there was nothing untoward then life carries on!  Directors are able to start a new company although there are strict rules about reusing the same or similar company name.  Learn more about this in our downloadable guide