A Company Voluntary Arrangement (CVA) is similar to an Individual Voluntary Arrangement (IVA) except it is for companies and not individuals. This procedure involves directors entering into an agreement with their creditors which lays out how the company debts are to be repaid and handled.
Company Voluntary Arrangement Explained
Entering into a CVA allows you to continue trading and retain control whilst enabling the company to repay your creditors.
The creditors who usually receive a payment are trade creditors, HM Revenue & Customs and landlords otherwise collectively known as the unsecured creditors.
Secured creditors are usually banks and finance companies and are not usually included in the CVA and are paid in accordance with usual business terms.
What Our CVA Experts Can Do For You
A company voluntary arrangement is usually for companies who have a sound business and are either experiencing cashflow difficulties or bad debts which they are struggling to recover. You, as a director, will make a proposal that is issued to creditors which will establish how much the company can afford to pay into an arrangement over a period of time.
The information in the proposal should be backed up by a business plan and projected cashflow forecast. The proposal will also detail how much creditors should expect to receive, whether this will be a full or partial payment. It will also highlight the timelines for when the creditors can expect to receive such dividends.
Your company will then make all necessary payments to a designated client account that is supervised by the Insolvency Practitioner whose role it is to ensure that the payments are being received on time. Once a sufficient pot of funds has accumulated, it is then distributed to creditors.
If you want to enter your company into a CVA, as long as the proposals are financially sound and viable, then they are usually accepted by creditors. After you have entered into a CVA, you and any other directors continue running your business and making day to day business management decisions. Inquesta’s insolvency practitioners are here to ensure that the agreed proposal of the CVA is implemented in line with the terms and conditions.
Unlike any other corporate insolvency processes, there is no investigation into either you the directors, or your business.
Contact CVA Specialists Today
If you want to discuss whether a CVA is an option for you, call Inquesta’s insolvency practitioners today on 0844 272 8380 or Live Chat with us now. Alternatively, you can complete our online enquiry form and one of our CVA insolvency practitioners will be in touch promptly.