CVL (Creditors’ Voluntary Liquidation)

Creditors’ Voluntary Liquidation (CVL) is a legal process used when a company can no longer pay its debts. The company's directors propose liquidation, typically when they recognize the business is financially unsustainable. During CVL, an appointed liquidator takes over, selling off the company's assets to pay creditors. The goal is to settle debts fairly, while ensuring the interests of creditors are prioritized. Unlike compulsory liquidation, which is often initiated by creditors or a court, CVL is a voluntary decision made by the company’s directors in the best interest of all parties involved.