Company Voluntary Arrangement (CVA)
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.
A Company Voluntary Arrangement (CVA) is a good option for many companies that are struggling to keep up to date with debt repayments. As a legally binding agreement, it means that your business cannot be targeted while it is in place with winding up petitions or any other legal recourse. You can pay what is affordable, and more importantly focus on turning around your business and allowing you to keep control.
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.