A common question we are asked is: What are the costs involved in a CVL?
The costs of a Creditors Voluntary Liquidation process are split into 2 sections:
- The cost of assisting the company directors into placing the company into CVL.
- The cost of appointing the Liquidator to administer the process.
The cost of the first stage is usually pre-agreed with the director and is fixed and realistic.
The cost of the second stage is governed by the Insolvency Rules 2016, which stipulate that the fee must be fixed by either one, or a combination of, the following:
- Fixed (as a set amount), or
- Equivalent to a percentage of the assets realised, or
- Be based upon the time spent by the Liquidator and their staff when dealing with the CVL process.
The nature of the CVL and the work involved will more often than not determine the fee basis. Naturally, the more complex the case, this more this is reflected in the overall cost.
However, when a company enters into CVL, these costs will typically be recovered out of the assets which have been realised.
This is however not set-in stone, and these costs can be funded in other ways.
To find out more about the Creditors Voluntary Liquidation process please click here.