Company Voluntary Arrangement (CVA)

A Company Voluntary Arrangement (CVA) is a legally binding agreement between your company and its creditors for you to repay a proportion of debt owed.

It will be based on what you can afford, usually repaid over a five-year period and once completed, the balance of any unsecured debt is written off.


It’s an effective compromise between a company and its creditors.


They’re guaranteed some repayment of the debt, although not all. You retain control of the business, it can keep trading and hopefully return to profit.


The alternative for both is usually worse for both parties so a CVA is an amicable way forward.

How does it work?

The first stage of implementing a CVA is to formally instruct us to do so.


We’ll prepare proposals for creditors and the other essential legal documentation required to formally enter a CVA.


Next, we’ll assess the company’s assets, prepare a full statement of affairs, a new business plan and cash forecast. These all make up the proposal that is sent to creditors ahead of their meeting.


A CVA isn’t automatically declared — it has to be voted on at a meeting of creditors and has to be approved by 75% of them to be passed.


We schedule this meeting and discuss any issues the creditors may have with the proposals or the CVA.


The vote is taken and subject to any approvals or amendments, the CVA is formally accepted.

What are the benefits?

  • Pressure on cash flow is released as the debt and tax burden has been reduced
  • Legal action from creditors stops when CVA accepted
  • Builds a better understanding and relationship between you and your creditors. The CVA allows this to continue.
  • Unlike liquidations or administrations, CVAs are not advertised
  • The positions of shareholders and directors are unaffected
  • Any outstanding financial or lease agreements or employee claims can be terminated and placed into the collective CVA creditor pot
  • Creditors will hopefully receive more from a CVA than from a liquidation

Any negatives?

  • The CVA requires a 75% majority of the creditors to vote for it at the meeting. It can be held up or defeated by a determined minority
  • A CVA is a five-year financial commitment so be sure that you can keep up the repayments
  • If the CVA fails then the company can still go into administration or ultimately be liquidated
  • Going into administration or liquidation after a failed CVA could be very expensive

Trading Administration

A rarer but useful form is a trading administration where the company continues to operate and trade while the administrator looks to sell it.

Find Out More

Partnership Voluntary Arrangement (PVA)

In practice, a Partnership Voluntary Arrangement (PVA) is virtually identical to a Company Voluntary Arrangement (CVA) with the differences being those specifically related to the different structure of partnerships.

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Pre-Pack Administration

There’s nothing new about Pre-Pack — it’s just a more efficient and effective administration procedure for viable companies.

Find Out More

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