Compulsory Liquidation vs Creditors' Voluntary Liquidation

What is the difference between a Compulsory Liquidation and a Creditors Voluntary Liquidation?

A Compulsory Liquidation is when a creditor of a Limited Company petition to winds the Company up due to failure to pay the creditor. This is a very serious matter and the Director has no choice when it comes to the Compulsory Liquidation, as a Winding Up Petition is considered a last resort.

A Creditors Voluntary Liquidation (CVL) is when a Director voluntarily chooses to close the Limited Company due to it being insolvent. The Director selects the insolvency practitioner themselves, unlike in a Compulsory Liquidation process. One of the main benefits of a CVL is that the Director is acting responsibly by deciding to close the company, which lessens the financial impact for creditors.

If your Limited Company is worried about creditor pressure and its financial circumstances, we can help.

The Directors Helpline specialise in guiding limited company directors through stressful financial circumstances. Our service is FREE, confidential and impartial. We have over 15 years experience and have helped over 20,000 directors overcome creditor pressure.

Whatever you're facing, our expertise cover:
- Bounce Back Loan Help
- Closing a Limited Company
- Help with HMRC Pressure
- Advice on Personal Implications
- Business Restructuring
- IR35 Advice
- Alternatives to Closing

Get in touch with our team today.

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