Company Voluntary Arrangement (CVA)

Company Voluntary Arrangement (CVA)

If your limited company is insolvent, it can use a Company Voluntary Arrangement (CVA) to pay creditors over a fixed period, It is often in the best interests of an insolvent company’s creditors and can allow the company to continue trading under the control of its directors. A CVA is a legally binding agreement between a company and its creditors.

A company or limited liability partnership (LLP) can apply if all the directors or members agree. You can only apply for a CVA using a licensed Insolvency Practitioner. They will charge you to apply for the CVA and also to administer it.

The Insolvency Practitioner will work out an ‘Arrangement’ covering the level of debt the Company can reasonably afford to pay and a payment schedule over a given period which may provide for partial or full repayment. They will write to creditors about the arrangement and invite them to a meeting to vote on it.

To get a CVA approved, at least 75% in value, of the voting creditors must vote in favour. If approved, the CVA will bind all creditors who were entitled to vote.

On completion of the CVA the business will now be solvent and can continue trading. You make the scheduled payments to creditors through the insolvency practitioner until these are paid off.

If you don’t get the 75% vote from the creditors, your company could face Voluntary Liquidation.

If you do not meet the agreed payment schedule, the Insolvency Practitioner can apply to wind up your business.
Saud & Co will help you with professional advice to make a viable CVA’s proposal. We will assist you in the drafting of all necessary documents, ongoing funding and will deal with all your creditors.

Saud & Co, Registered office: 21 Highfield Road, Dartford, Kent DA1 2JS
Tel 0208 304 0609 - Fax 0700 608 8816
Saud & Co is a trading name of Saud & Company Limited.
Company Registration Number 08402929 – VAT registration 726 1719 34
Authorised by the Insolvency Practitioners Association to act as Licensed Insolvency Practitioners in the UK