A CVL is the most common insolvency procedure for an insolvent Limited Company (LTD) or Limited Liability Partnership (LLP) and is the mechanism for a formal winding of a company’s affairs.
The directors, of a limited company may realise that the company is insolvent since it cannot pay its debts as they fall due (cash flow insolvent) or it has more liabilities than assets (balance sheet insolvent). They will then contact a licensed insolvency practitioner with a view to reviewing the Company’s finances and where appropriate assisting them to place the company into a CVL.