Creditors' Voluntary Liquidation

Creditors' Voluntary Liquidation (CVL) is a process used by a financially distressed company to formally wind up its affairs when it can’t pay its debts. The company's directors voluntarily choose to enter liquidation, and a liquidator is appointed to sell off the company's assets. The proceeds are then used to repay creditors in order of priority. Unlike compulsory liquidation, which is initiated by creditors through the courts, CVL is a proactive step taken by the company to manage its debts responsibly and to ensure a fair distribution to creditors before ceasing operations.