A Company Voluntary Arrangement (CVA) is similar to an Individual Voluntary Arrangement (IVA) except it is for companies and not individuals. The procedure involves directors entering into an agreement with their creditors that states how the company debts are to be repaid and handled.
Entering into a CVA allows you to continue trading and retain control whilst enabling the company to repay creditors.
The creditors who usually receive a payment are trade creditors, HM Revenue & Customs and landlords. They are otherwise collectively known as the unsecured creditors.
Secured creditors are usually banks and finance companies. They 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 CVA is usually for companies which are essentially sound but are either experiencing cashflow difficulties or have bad debts which they are struggling to recover. As a director, you will make a proposal to creditors which will establish how much the company can afford to pay 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 and whether this will be a full or partial payment. It will also highlight 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 is to ensure that the payments are being received on time. Once a sufficient pot of funds has accumulated, this is distributed to creditors.
If you want your company to enter into a CVA then, as long as the proposals are financially sound and viable, 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 management decisions.
Inquesta’s insolvency practitioners are here to ensure that the agreed terms of the CVA are adhered to.
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 chat live with us now. Alternatively, you can complete our online enquiry form and one of our CVA insolvency practitioners will be in touch promptly.