The Creditors’ Voluntary Liquidation process or CVL as it is often referred to, is a fast effective means by which directors of an insolvent company can comply with their statutory duties regarding insolvent trading and quickly mitigate further losses to themselves and creditors.
The process is voluntarily instigated by the directors and shareholder of the company once they have determined that there is no prospect of saving the business, however the appointment of the Liquidator may either be ratified by the company’s creditors or they may elect to appoint an alternate Liquidator.
The Liquidator’s primary functions are to investigate and report the reasons for corporate failure, determine whether all of the company’s assets have been accounted for and secure, realise and distribute company assets to creditors. The Liquidator is also required to report his findings to the Australian Securities and Investments Commission.
Alternatively a Creditors Voluntary Liquidation can follow a Voluntary Administration.
Amendments to the Corporations Act 2001, now make the Creditors Voluntary Liquidation process an option available to Director’s attempting to avoid liability for a Director’s Penalty Notice issued by the Commissioner of Taxation.
If you wish to contact Shaw Gidley to make an enquiry regarding a creditors voluntary liquidation, please use the enquiry form on the right and one of our Corporate Insolvency Services Team will respond to you in the near future.
With Offices in Newcastle, Central Coast and Port Macquarie, Shaw Gidley is your bankruptcy, liquidation and insolvency specialists.