Since the introduction of the Insolvency Act 1986, the CVL has been the most widely used procedure for the liquidation of an insolvent company. It provides directors with an opportunity to explain their actions by preparing a written report to creditors, and enables shareholders to nominate a Liquidator of their own choice, subject to the creditors' ability to have that Liquidator replaced by their own nominee. Where necessary, appointment of a Liquidator can be done quite quickly in order to protect assets from creditor enforcement action.

The Liquidator's appointment is finalized at a meeting of creditors, normally held after a meeting of shareholders. The creditors can appoint a Liquidation Committee to assist and advise the Liquidator. A specific resolution regarding how the Liquidator should be remunerated is proposed.

The Liquidator's role is primarily to realize the assets of the company and to distribute funds to creditors in statutory order of priority. The Liquidator also has a duty to investigate the affairs of the company and to report to the Department of Trade and Industry under the Company Directors Disqualification Act 1986 as regards specified types of misconduct by the directors. In appropriate cases, the DTI may then issue proceedings to have directors disqualified. The Liquidator also has significant powers to issue proceedings against directors for compensation for losses caused by fraudulent or wrongful trading, or by preference, and also generally for recovery of assets.