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Creditors Voluntary Liquidation
Creditors Voluntary Liquidation (CVL) is where the directors of an insolvent company decide to wind it up and appoint a liquidator, rather than waiting for a court to order it. The liquidator takes control, realises whatever assets are available, investigates the company's affairs and reports to creditors and ASIC. It is most often used where a company genuinely cannot continue and the directors want to deal with that properly.
WHO IS THIS FOR?
Company directors considering voluntary liquidation, the accountants and advisers supporting them, creditors affected by a company closing, and lawyers managing the process.
IN DETAIL
A Creditors' Voluntary Liquidation (CVL) is initiated by the directors of a company when they recognise the company is insolvent and unable to continue its operations. This decision is taken voluntarily to orderly wind up the company with the involvement of its creditors.
There are several benefits that make a CVL a considered choice for directors looking to manage their company’s insolvency responsibly and effectively.
A controlled process
Avoidance of compulsory liquidation
Minimise your director liability
Potentially Rescue your business
Fair distribution of assets
HOW TTJ CAN HELP
TTJ talks directors through what liquidation involves and whether anything else is realistically open to them first. Where CVL is the right step, we act as liquidator, take control, realise available assets, carry out the required investigations, deal with creditors and complete the statutory reporting.
WHEN TO SEEK HELP
Get advice if the company cannot pay its debts, if directors are concerned about insolvent trading, if creditors are pressing, or if the directors have already accepted that the company needs to close. Acting earlier usually leaves more options and reduces personal risk.
OUR PROCESS
A CVL follows a clear sequence once the decision to wind up is made. The steps below outline how TTJ approaches one, from the initial review through to finalisation.
Important Considerations
Employee entitlements, directors' duties, insolvent trading and how creditors are paid all depend on the facts of the matter. None of these should be presented as definitive without review.
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AUSTRALIA
Thyge Trafford-Jones
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Principal — ASIC Registered Liquidator (No. 458321) · AFSA Registered Trustee (No. 1582)
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Member, Australian Restructuring Insolvency & Turnaround Association (ARITA)
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Member, CPA Australia
TTJ Advisory is a registered business name of Restructure My Small Business Pty Ltd (ACN 670 511 476).
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