Creditors Voluntary Liquidation

In situations where an insolvent company makes the voluntary decision to enter into liquidation, a Creditors Voluntary Liquidation (CVL) becomes the chosen path. The Start-Up Shop is here to guide you through this process, ensuring that you understand and fulfil your statutory responsibilities while efficiently navigating the necessary procedures.

Director-Initiated Process: Typically, a CVL is initiated by the company’s directors. To kickstart this process, the board of directors convenes a meeting to reach a consensus that the company should undergo liquidation. Subsequently, notifications are dispatched to shareholders and creditors.

Notice Requirements: According to the 2014 Companies Act, a minimum 21-day notice period must be provided for the meeting of all creditors. Furthermore, the creditors’ meeting must be publicly advertised at least ten days prior to the scheduled meeting date. This advertisement should appear in at least two daily newspapers circulated in the district where the company’s registered office or primary place of business is located.

Presentation of Key Information: During the creditors’ meeting, a presiding director typically delivers a concise statement outlining the reasons compelling the company’s liquidation. Additionally, the director is obliged to present a Statement of Affairs. This statement provides a comprehensive overview of the book value of the company’s assets, as well as their realizable value. Creditors may seek clarification or pose questions regarding this statement to ensure transparency and accuracy.

The Start-Up Shop’s role in this process is to provide expert guidance, ensuring that all legal requirements are met and that the liquidation process proceeds smoothly. We help you navigate the complexities of a CVL, allowing you to focus on resolving financial challenges while maintaining compliance with statutory obligations.

Through our support, you can confidently navigate the intricate procedures of a Creditors Voluntary Liquidation, making informed decisions that align with the best interests of your company and its stakeholders.