A Creditors’ Voluntary Liquidation is a process where the company’s directors decide to bring the business to an end voluntarily.
The CVL procedure is a quick and efficient way of shutting shop and putting an end to worries caused by the company’s mounting debt pile.
In this article we’ll cover the usual timeframe of this process.
How Long Does Liquidation Take?
Unfortunately there is no easy answer to this question. It varies widely depending on the state of the company, its size and the complexity of its assets.
- Appointing a liquidator takes one to two weeks.
- To actually place the company into a CVL can take as little as 14 days.
- To complete the liquidation so that all assets have been realised and the proceeds distributed to creditors is more commonly a process that takes one year, or even longer where big companies are concerned.
- From start to finish, it usually takes between six and 24 months to liquidate a company.
Typical voluntary liquidations are fast-paced and deadline-driven procedures.
The day after the shareholders’ meeting where the company was wound up and a liquidator was nominated, the company directors have seven days to deliver a notice to creditors, requesting their vote on the resolutions passed.
The decision date or meeting on these resolutions should be no earlier than three days after the notice is delivered and no later than 14 days after the shareholders’ meeting.
Creditors can vote on the proposals using a number of decision-making methods, such as correspondence, electronic voting or a virtual meeting using video conferencing, for example.
Creditors also have the right to request a physical meeting if they can meet the 10/10/10 rule. This is 10% of creditors (in value) or 10 individual creditors or 10% of creditors (in number) must support the request for this type of meeting.