Guide to Creditors Voluntary Liquidations
Our London office team has put together this easy to use infographic that takes you through the processes that are involved in creditors voluntary liquidations – or insolvent liquidations, as they are sometimes called. We have been appointed as the liquidator on hundreds of CVLs since we started as Licensed Insolvency Practitioners in 1997. In 2018 we placed 31st in the country in the Insolytics League Table of Insolvency Practitioners for 2018. In 2018 our team was appointed to act on 140 company insolvencies.
If you’re business is in financial difficulties and it looks like a creditors voluntary liquidation is the only realistic option, please contact us or call us on 0208 088 0633 for a FREE initial discussion.
Creditors Voluntary Liquidations are the Most Common Type of Company Insolvency
In 2018, in England and Wales, 17,439 companies entered insolvency, which was an increase of 0.7% on 2017. Excluding bulk insolvencies, 11.152 of these were creditors voluntary liquidations – 69.3% of the total. The number of CVLs increased by 9.3% on 2017, with the total being the highest since 2013. Of all liquidations, it is estimated that 1 company per 246 active companies was liquidated in 2018, up from 1 in 264 in 2017.
After reviewing all of the data provided by the Insolvency Service for 2018, it seems that the insolvency market is on the rise, This could be due to a number of reasons including: uncertainty over Brexit, and the fast growing pace of the technological market, causing businesses who have not kept up with it to close.
Act Quickly to Avoid Liquidation
As our insolvency and restructuring guide shows, the road from financial distress to crisis can be quick and brutal. With the former, there might still be an opportunity to restructure the business and turn it around if professional advice and help is sough quickly. However, once the crisis point is reached, often characterised by a lack of liquidity, which makes it impossible to pay HMRC, suppliers, meet overheads, pay staff or simply finance the running of the business, then that is when a formal insolvency procedure is required.
Company Voluntary Arrangements and Administrations will be considered at this stage. However, if irt is considered that there is no realistic prospect of saving some or all of the business, than that is when a creditors voluntary liquidation is used.