Contact

Creditors’ Voluntary Liquidation (CVL)

A Creditors’ Voluntary Liquidation (CVL) is a process initiated by a company that is unable to pay its debts as they fall due. When directors recognize that the company is insolvent, they are obligated under company law to commence liquidation. It is crucial for the company to cease trading promptly to protect all creditors, including employees and shareholders, and to avoid further financial liabilities.

Directors’ Duties for an Insolvent Company

Upon realizing the company’s insolvency, directors must take immediate action to protect the company’s assets and prepare for an orderly wind-down. Key responsibilities include organizing the creditors’ meeting and ensuring all statutory requirements are met. Our team can assist with arranging the creditors’ meeting, including notifications, advertisements, and booking meeting rooms. We can also provide access to specialist insolvency solicitors or chairpersons if needed.

Preparing for the Creditors’ Meeting

Directors must present the following documents at the creditors’ meeting:

Estimated Statement of Affairs

This summary details the company’s assets and liabilities, highlighting the estimated realizable value.

Chairman’s Statement

This executive summary outlines the company’s background, reasons for insolvency, and the rationale behind the liquidation.

Role of the Liquidator

Once appointed, the liquidator is tasked with a range of responsibilities, including realizing assets and managing debtors, and handling interactions with banks, Revenue Commissioners, creditors, and employee claims. The liquidator processes employee claims, such as redundancy and insolvency claims, and if there are insufficient funds, prepares employee forms and coordinates with the Department of Social Welfare. Additionally, the liquidator is responsible for distributing dividends to creditors according to their preferential status and must report to the Director of Corporate Enforcement under Section 682 of the Companies Act 2014 within six months of their appointment.

Standard Questions for Creditors’

Insolvency

  • When did the directors recognise the company’s insolvency, and what actions were taken?
  • Has the financial position deteriorated since the realisation of insolvency?
  • Did the directors seek professional advice, and were these advisors paid or are they creditors?
  • When did the company cease trading?

Estimated Statement of Affairs

  • What are the fixed assets (e.g., company cars, plant & machinery)?
  • Are any assets financed or mortgaged? Have any assets subject to finance been returned to the financier?
  • Are remaining assets securely located?
  • What is the status of current assets, including stocks with retention of title claims and debtors?

Overall Deficit

  • What was the company’s average margin (gross/net of VAT)?
  • What was the turnover and how does it compare to the expected financial position?
  • Are there any significant differences between the expected financial position and the actual deficit?

Financial Statements

  • When were the last audited accounts prepared and filed with the Companies Registration Office?
  • Were Management Accounts prepared regularly, and if so, by whom?
  • What was the last audit opinion, and did the auditor reference a going concern?

Other Matters

  • Are any directors also chairpersons of other companies, or do they have company cars?
  • What is the status of director salaries and personal guarantees?
  • How many employees did the company have, and what is their payment status?

Changes Under the New Companies Act 2014

Changes in the Companies Act 2014 have affected the liquidation process significantly. Liquidators are now required to be qualified professionals and must not have been officers or employees of the company within two years prior to the liquidation. Additionally, filing periods for liquidation documents have been revised, and there are new form requirements. Court-appointed liquidators are now permitted to follow creditors’ voluntary winding-up procedures. Furthermore, statutory documents must clearly indicate if a liquidator has resigned.

Contact Us Today

For more information or to schedule a consultation on Creditors’ Voluntary Liquidation, please contact us. Our team is here to guide you through the CVL process and ensure a compliant and efficient resolution.
More

Testimonials

"Fitzwilliam Corporate guided us through a complex shareholder exit with expert valuations and smooth transition support. Their strategic plan review provided valuable insights, boosting our confidence for future growth."
Denise CullenCEO, Enterprise Solutions Limited
"Fitzwilliam Corporate has been invaluable in helping us with our challenges. Their strategic advice has been key to the growth of our business."
Robert MatthewsCEO, Pipiper
"We’ve worked with Fitzwilliam Corporate on multiple projects. They’re responsive, knowledgeable, and understand our business goals, providing real value in Audit, Tax, and Business Advisory."
Jim MooreTelclic
"Fitzwilliam Corporate, led by Cormac Mohan, has been a great partner. They bring both commercial focus and technical expertise, making them a great choice for growing businesses."
Ciaran LarkinKinvara Properties

Trusted by Leading Businesses

Contact
Facebook-square Linkedin