A Creditors Voluntary Liquidation (CVL) is used to wind up an insolvent company — one that cannot pay its debts. Creditors are the primary focus, and any available assets are distributed among them after costs. A Members Voluntary Liquidation (MVL) is used for solvent companies — those that can pay all debts in full. The remaining assets after paying creditors are returned to shareholders. An MVL is often used as a tax-efficient exit strategy for business owners. The key distinction is solvency: if the company can pay everything it owes, an MVL is appropriate; if not, a CVL is the correct process.
