The following Environment guidance note Produced in partnership with Robert Smailes of Shipleys LLP provides comprehensive and up to date legal information covering:
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 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 of practitioner is neutral.
The meeting of the board of directors will usually resolve to convene both meetings of the shareholders and creditors at this time and notices will be sent to all known creditors and
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