Company Voluntary Arrangement (CVA) Insolvency
Company Voluntary Arrangements (CVAs) are legal agreements that allow a business to pay what they can afford towards their debts to help them get back on a level footing – allowing you to keep control of your business.CVAs are a helpful option for any company in situations where:
- you are struggling to keep up-to-date with debt repayments
- you need to find a payment arrangement that is affordable
- you need legal protection from winding up petitions
For anyone looking to explore entering a company voluntary arrangement, you can speak to us here at The Insolvency Experts about finding the right arrangement for you. We have a team of experienced CVA experts who are more than happy to speak with you and help you find the reliable financial support at such a key time.
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4 Key Questions on Company Voluntary Arrangement
How do you know if a Company Voluntary Arrangement is right for you?
A Company Voluntary Arrangement (CVA) is a good option for companies that are struggling to keep up to date with their debt repayments. As mentioned above, it provides a legally binding agreement that means your business cannot be targeted with winding up petitions or any other legal recourse while the agreement is in place.
Once you decide to seek a CVA, a voluntary agreement proposal will be put together by an Insolvency Practitioner, based on your finances. This will be put to your creditors, with 75% approval required for it to be accepted. It also needs to be ratified by your shareholders before it can be implemented.
Once it’s been agreed, a trust account is set up for payments to be made into and for creditors to be paid from. A CVA can buy time for you to improve cash flow, and it can help you to retain the services of key members of staff to ensure you’ve got the best chance of keeping your business solvent.
What are the main reasons to consider a CVA?
For anyone looking at a CVA insolvency solution, there are a number of key motivations for finding the right company voluntary arrangement for you and your company, including:
- It allows you to keep control of your business
- It provides your company with protection from its creditors
- Your business carries on trading, enabling a restructure to improve profitability
- Rather than calculating numerous creditors, they’re all consolidated into one payment
What are the main benefits of a CVA?
In addition to the main protections offered by finding the right company voluntary arrangement through the support of a CVA expert, there are a range of key benefits offered, namely.
- Improvements in cash flow, therefore increasing working capital in the business
- The company continues in its existing form without requiring a “new company”
- A discrete proceeding – the situation is not publicly advertised as it is with an administration
- Can prevent a winding-up petition taking effect (as long as action is taken quickly)
- Your creditors will feel more confident they will receive the amount owed, reducing pressure they put on you
- Enables an ongoing relationship with many of your suppliers, often under different payment terms
How do I find the right CVA expert?
Here at the Insolvency Experts, we have a wealth of experience in helping clients across the UK to navigate the process of constructing a company voluntary agreement that helps protect the financial interests of their company. To speak to a CVA expert, contact us today if you believe this may be appropriate for you. For more information, email us on email@example.com or give us a call on 0300 303 8284.