Creditors Voluntary Liquidation Procedure
In a Creditors’ Voluntary Liquidation, the shareholders appoint an authorised insolvency practitioner to act as the liquidator.
This appointment will then need to approved by the creditors at the creditors’ meeting.
This usually takes place three weeks after the initial engagement.
The directors must hold a meeting to confirm that the company is insolvent and that steps are being taken to place the company into a Creditors Voluntary Liquidation.
The shareholders’ meeting will normally take place immediately before the creditors’ meeting. If the shareholders agree to the liquidation, they can then confirm the directors’ choice of the liquidator.
After the shareholders’ meeting, there must be a creditors’ meeting, which is often held on the same day.
Creditors must receive a statutory minimum of 7 days notice of the meeting.
Once the Liquidator has been appointed the business of the winding up of the company can formally commence. Typically agents will be instructed to value the assets if this has not already been done and asked to realise them for the best value.
Upon completion the costs and expenses of the Liquidation will be discharged. Thereafter the company will be prepared for formal closure leading to its dissolution.