How does a creditors' voluntary liquidation work?
A CVL is a voluntary statutory process initiated by the directors and shareholders of an insolvent company. It is not a private arrangement and creditors have defined rights.
7 min read · Last reviewed August 2026Before the appointment
The board reviews the financial position and alternatives, prepares information and coordinates the shareholder and creditor decision procedures.
- Statement of affairs information
- Creditor and employee details
- Company books and records
- Asset information
- Recent transactions and director explanations
After appointment
The liquidator takes control of the company's assets and statutory affairs.
- Realise assets
- Agree creditor claims
- Report and investigate
- Deal with statutory filings
- Distribute available funds
- Close the liquidation
Costs
Costs depend on complexity, assets, records, employees and the work required. The funding and approval basis should be explained before the process begins.
Common questions
Do directors choose the liquidator?
Directors and shareholders nominate an insolvency practitioner, subject to the statutory creditor decision process.
Can a company with no assets enter CVL?
Funding and practical arrangements still need to be addressed. The appropriate route depends on the circumstances.
This guide is general information only and does not constitute insolvency, legal, tax or financial advice. The position should be reviewed using the company's current facts and documents.