The following Banking & Finance guidance note Produced in partnership with Robert Smailes of Shipleys LLP provides comprehensive and up to date legal information covering:
On 6 April 2017 the Insolvency (England and Wales) Rules 2016 (IR 2016), SI 2016/1024 replaced the Insolvency Rules 1986 (IR 1986), SI 1986/1925.
For a summary of the changes to CVL’s, see Practice Note: The Insolvency (England and Wales) Rules 2016—Part 6: Creditors’ voluntary winding-up [Archived].
A creditors’ voluntary liquidation (CVL) is a voluntary process initially instigated by a board of directors and is an alternative to the company being wound up by the court on a petition presented by a creditor of the company.
The process is initially commenced with a meeting of the board of directors of the company. At that meeting, the directors (a quorum of which must attend or be present via telephone/internet) must decide, having considered the plight of the company, that it should take steps to place the company into CVL.
Once a decision has been taken by the directors, they must instruct a firm of licensed insolvency practitioners to act on behalf of the company. Unlike a creditor-led winding-up petition, the choice of insolvency practitioners at this stage is a matter for the directors to decide upon. However, the choice of practitioners should not include anyone who has had a material professional relationship with the company and cannot be the current auditors, as it is key that the company’s choice
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