Company Voluntary Agreeements (CVAs)

A company voluntary arrangement (CVA) is a formal business recovery process designed to restructure insolvent businesses which enables them to avoid liquidation and continue trading.

A CVA will allow you the breathing space you need and restructure how you pay your creditors, including HMRC, over a fixed period (usually 5 years).

The arrangement highlights that at present the company cannot pay its debts but will be able to out of future profits. The business will pay towards its debts for the agreed period and once completed all remaining debts are written off.
Vital Components of a successful Company Voluntary Arrangement (CVA) are:

  • A viable business that can return to profitability.
  • Commercially structured – offers creditors reasonable payment prospects
  • Where required an introduction of appropriate levels of working capital which may include the restructuring of debt.
  • Determination of the Directors of the business to ensure success of the CVA
  • Directors need to use an experienced Insolvency Practitioner.
  • Realistic forecasting.

Who can propose a CVA?

A CVA may be proposed by the directors of the company. When the company is in administration, the administrator can propose a CVA. A CVA can only be proposed if a company is insolvent or contingently insolvent.

How long does it take?

In practice it often takes several weeks from instruction to approval however the sooner you act can make a difference.
CVAs typically have a duration of 3-5 years.
If your business is in this situation, you’ll need the services of a licensed insolvency practitioner.
The company makes scheduled payments through us (your insolvency practitioner) until the terms of your arrangement are complete. If any payments are missed, creditors can force you to wind up the business.
Our experience in managing formal insolvency procedures extends over 20 years.

 

Advice you can trust

For peace of mind, why not ask our advice?
Request a free, no obligation, confidential consultation with one of our insolvency specialists today.

Who can propose a CVA?

A CVA may be proposed by the directors of the company. When the company is in administration, the administrator can propose a CVA. A CVA can only be proposed if a company is insolvent or contingently insolvent.

How long does it take?

In practice it often takes several weeks from instruction to approval however the sooner you act can make a difference.
CVAs typically have a duration of 3-5 years.
If your business is in this situation, you’ll need the services of a licensed insolvency practitioner.
The company makes scheduled payments through us (your insolvency practitioner) until the terms of your arrangement are complete. If any payments are missed, creditors can force you to wind up the business.
Our experience in managing formal insolvency procedures extends over 20 years.

 

Advice you can trust

For peace of mind, why not ask our advice?
Request a free, no obligation, confidential consultation with one of our insolvency specialists today.