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Company Voluntary Arrangement

This agreement specifies new conditions regarding your company’s debts, such as the total amount of debt and the debt repayment schedule.

Is your company experiencing financial difficulties? If your company is currently unable to pay its creditors, it has a range of options to avoid being liquidated and can potentially return to normal trading.

A Company Voluntary Arrangement, which is also known simply as a CVA, allows your company to negotiate an agreement with its creditors to reduce its debts and reschedule its liabilities over a longer period of time.

With a CVA, your company could ease the strain on its cash flow and start trading again. Contact us to learn more about how our team of business recovery experts can help your business successfully propose a CVA to its creditors.

 

 If you feel your business is in financial difficulty it is important to deal with it immediately. Call now on 0845 676 9033 for free confidential advice, or visit our contact us page.

Introduction to FRP


  • What is a Company Voluntary Arrangement?

    A Company Voluntary Arrangement is an agreement between your company and its creditors. This agreement specifies new conditions regarding your company’s debts, such as the total amount of debt and the debt repayment schedule.

    For example, a CVA may specify that your company is no longer required to pay the full amount of its debts to creditors, and can instead repay a certain percentage of its original amount.

    Normally, a CVA will include new repayment conditions for your company, such as an extension of its debt repayment schedule. It’s common for CVAs to extend your company’s liabilities to a period of time, such as 60 months.

    A Company Voluntary Arrangement is a legally binding contract made between your company and its creditors that, once approved, provides protection against winding up petitions and other legal action by creditors.

     

    Is a Company Voluntary Arrangement suitable for your company? 

    Not all companies can enter into a CVA. In order for your company to be eligible for a Company Voluntary Arrangement, it must:

    ·         Be insolvent, either via cash flow insolvency or balance sheet insolvency, or contingently insolvent.

    ·         Be commercially viable with a realistic chance of returning to normal trading if the CVA is agreed to by creditors.

    ·         Have sufficient projected cash flow to pay back creditors according to the terms of the CVA.

    Company Voluntary Arrangements are most suitable for insolvent companies with a viable and effective business model that need to renegotiate the terms of their debts to improve cash flow and resume trading.

     

    What are the benefits of a Company Voluntary Arrangement?

    Entering into a CVA has several benefits for your company. It brings legal pressure from your company’s creditors, such as a statutory payment notice, to an end, and protects your company from legal action, while it complies with the CVA.

    It also gives your company financial flexibility by allowing you to negotiate a new repayment agreement with creditors. A successful CVA can lead to reduced debts and an extended repayment schedule, improving your company’s cash flow.

    Finally, a CVA lets your company’s directors remain in control of the company. This makes it an attractive alternative to solutions such as administration, which require directors to give up control of the company.

    Entering into a Company Voluntary Arrangement doesn’t just benefit your company alone. A successful CVA also helps your company’s creditors by ensuring they get an amount of the debt owed to them returned.

     

    Contact us to learn more about a Company Voluntary Arrangement

    If your company is insolvent or struggling under creditor pressure, entering into a Company Voluntary Arrangement with its creditors could give you the conditions you need to save your company.

    Our business recovery experts have provided advice and assistance to hundreds of UK companies. Contact us now for a free initial meeting to learn about the CVA process and understand the options available to you in order to save your company.