Creditors Voluntary Liquidation (CVL)
A Creditors’ Voluntary Liquidation (CVL) is the most common liquidation process in Cyprus. If a company does not have enough cash flow to pay its debts, it becomes Insolvent and sometimes the only logical course of action would be for the Directors to place it into Voluntary Liquidation. The most common way for this to be handled would be a CVL.
A CVL is appropriate when:
- The Company is insolvent.
- The Company does not seem to be viable even after restructuring.
- The Directors do not have the confidence or the drive to rescue the Company.
The Directors must convene meetings of shareholders and Creditors to agree to place the Company into Liquidation. When the liquidator has been appointed by the members and Creditors, it is his duty to:
- Realise the Company’s assets.
- Agree to the claims of the company’s Creditors and pay dividends.
- Investigate the Company’s affairs and the Director’s conduct.
What happens when a liquidator is appointed?
Once a Company is placed into Liquidation the liquidator undertakes the following duties:
- Secures books, records and assets
- Process employee claims for arrears of wages, minimum notice and redundancy
- Investigates reasons for the Liquidation
- Sells assets
- Submits report to the Office of the Official Receiver
- Agrees claims of Creditors
- Pays dividends to Creditors if asset realisations in the Liquidation are sufficient
How Can We Help You?
- Act as liquidators
- Advise on all the necessary steps to place a Company into liquidation
- Relieve some of the stress by explaining the process and advising you on how to fully prepare yourself for the Liquidation.
- Deal with all issues, including employee claims, taxes and creditors.
- Provide consultation to directors seeking advice on their options for dealing with insolvent companies.
For further information please contact us at firstname.lastname@example.org or 22-264455.
This website contains general information based on Cyprus law and practice. Please note that it does not constitute legal or commercial advice, nor is it intended to create a client relationship. Neither is it intended to provide a comprehensive or detailed statement of the law or practice.
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