How long does a CVL take?
This is a collaborative post.
Being in the position of needing a CVL (creditors’ voluntary liquidation) is never going to be totally stress-free. As a result, you’re likely keen to know how long it’ll take until it’s over and done with so that you can return to relative normality.
Unfortunately, the amount of time it can take for a CVL to be completed varies dramatically, depending on a number of different factors.
While it’s impossible to give a single, one-size-fits-all answer, we can take you through the process so you understand what it entails.
Preparation
Prior to the actual initiation of a CVL, the directors of the company in question will need to consult with a qualified insolvency practitioner from a firm and find out if it’s the best solution given the financial circumstances the business finds itself in.
This will entail gathering a wide array of documentation, covering outstanding debts, available assets, and a wide range of other financial and legal information.
How long this preparation stage takes will obviously vary significantly depending on how large and complex the business in question is.
Meetings
A CVL typically involves two important meetings: a meeting with all the shareholders, and then a meeting with the creditors.
The shareholder’s meeting is so that they can vote on whether or not to enact a CVL and choose a licenced insolvency practitioner.
The creditor’s meeting will allow them to ask any questions or express concerns about the process.
Appointment of a liquidator
After these meetings, the insolvency practitioner can officially be appointed.
They will then start the process of collecting all of the business assets, selling them off for as much as possible and then using the proceeds to pay back creditors in the legal order of entitlement.
How long this can take will vary significantly; some assets can take a very long time to sell, while others may be very easy to liquidate.
Investigations
It’s possible that as part of the liquidation process, the liquidator may have to conduct some further investigations into the way that the company got into that situation.
That may involve investigating instances of misconduct, fraud, or other illegal actions. Depending on these factors, and the potential need to involve other agencies, this could add a lot of time to the process.
How long do they take roughly?
If you came here for a single, easy number, you’ll be disappointed to hear that CVLs can take anywhere from a few months to a few years.
Speaking to a qualified insolvency practitioner will be the best way of finding out how long it’s likely to take based on your specific circumstances.
As you can see, winding down and dissolving a business is a very lengthy process – almost as long as building the business in the first place.
It’s not something that can be rushed, although choosing an experienced insolvency practitioner can definitely help to limit some of the unnecessary holdups.
Other than that, all you can do is prepare the business as best as possible and hope for the best.