How Long Does a Creditors’ Voluntary Liquidation Take?

October 6, 2022 / CVL

For many companies, the threat of insolvency is something that will need to be dealt with at some point – especially given the current economic climate, plus the ripple effects of Brexit and the Coronavirus pandemic.

When a company is faced with potential insolvency (i.e. being unable to pay all of its bills), the directors should know what options are available to them for dealing with the situation.

One option is the Creditors’ Voluntary Liquidation (CVL) procedure. This is a popular method for dealing with an insolvent company, as it provides assurances that the company’s debts and the responsibilities of the company directors are all dealt with correctly, and in accordance with the relevant laws and insolvency regulations.

If you are a company director and considering a CVL as an option, it is important that you know what is involved, including how long the procedure takes.

In this article, Clarke Bell address this, as well as discussing the wider implications of the CVL procedure.

What is the Creditors’ Voluntary Liquidation procedure?

A Creditors’ Voluntary Liquidation (CVL) is a formal insolvency procedure. It is voluntarily initiated by a company’s directors, rather than a compulsory liquidation which is initiated by a third party who is owed money by the company. A CVL is used by companies that cannot pay their debts when they are due, and have no intention or viable means to remain trading.

The CVL process begins with the appointment of a licensed insolvency practitioner. Directors can appoint whoever they like, unlike in a compulsory liquidation where the director has no say in which insolvency practitioner deals with the liquidation of their company. The courts make this decision.

The insolvency practitioner is appointed by the company director, and acts on behalf of the creditors of the company. They will help to ensure that your company is properly liquidated. They will realise any funds held within your company, distributing any proceeds amongst creditors, as applicable. A CVL will prevent creditors from taking legal action against your company, along with protecting your personal finances, assuming you have not signed a personal guarantee as part of your loan agreements.

For more information, read our full guide on the CVL process.

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The length of the CVL procedure

It is impossible to definitively state how long the CVL procedure takes, as it varies depending on the particular situation of the company being liquidated. The length of the process is also determined by a company director’s swiftness in dealing with all the necessary requirements of the process.

While it is difficult to pinpoint a precise time, the average liquidation takes several months to complete. The more complex the case, however, the longer the liquidation is likely to take – with some taking several years to conclude.

Also Read: What Are the Consequences of Creditors’ Voluntary Liquidations for Directors?

Potential delays during the liquidation process

In the ideal scenario, the CVL procedure would be carried out without impediment. However, this is often not possible, with several factors that could cause the procedure to suffer delays.

Information gathering

A lot of information is required when putting a company through the CVL process – including the company’s book and records, accounting information, creditor details and details about any staff, such as wages, hours contracted, holidays accrued and notice date.

It can take a lot of time for directors (and their accountants) to gather all of this information, as most do not have it all to hand. Clearly, the longer it takes to provide this to the insolvency practitioner, the longer the CVL will take.


These delays can take a wide variety of forms, with a common one being if any litigation is required, for example to help settle any disputes and/or undertake any investigations regarding the case.

Insolvency practitioners will try to avoid legal action wherever possible, preferring using dialogue and negotiation. However, this is not always possible, and litigation is sometimes required. This will, inevitably, extend the duration of the CVL procedure.


As part of the insolvency procedure, an investigation will be opened by the insolvency practitioner. In our Statement of Insolvency Practice 2 (SIP 2) investigation we look into the affairs of the insolvent company. This includes a review of the actions of the directors and the company’s bank statements – which is where we would spot any funds that were misappropriately used e.g. using a Bounce Back Loan for non-business activities.

The result of the SIP 2 investigation is issued to the Insolvency Service, and they determine how they wish to proceed with that information.

If misconduct is found, penalties may apply to the directors. The most common is disqualification, which can last up to 15 years. This disqualification will also include other management positions, both in the current company and others. In addition, directors could also assume personal liability for their company’s debts, or be expected to pay a fine. In the most severe cases, directors may even face a prison sentence.

Naturally, this investigation work takes time – especially if the Insolvency Service want further details – and may result in some delays to your CVL process.

Clarke Bell can help you

If your company is struggling with its finances, or you are considering a procedure such as a Creditors’ Voluntary Liquidation, then let Clarke Bell help you.

We have over 28 years of experience in helping companies in your situation, and we can help you.

For a free, no-obligation consultation, contact us today.