CVA – Company Voluntary Arrangement
- If you have historic debt that you are unable to keep up the payments for, then this process can help restructure the payments
- It can help rescue your business for future trading
- A typical Directors Company Voluntary Arrangement will last up to 5 years
We’d like to offer you a Free Options Review with one our in-house Insolvency Practitioners. Martin, Carolynn and Richard are awaiting your contact.
What is a Company Voluntary Arrangement?
Some key advantages to a Company Voluntary Arrangement
- Survival of the company
- Higher returns to creditors
- Interest is frozen on the debts
- No director conduct investigation
- Directors retain control of the company
What is the Company Voluntary Arrangement process?
A key part of the Company Voluntary Arrangement process is the preparation of the proposal and the voting of the proposal by creditors.
Once a company is insolvent, company directors owe a duty of care to creditors to take the necessary steps to minimise the losses they may suffer. The proposal therefore needs to highlight the benefits of the business rescue process compared to the liquidation alternative and show a higher return to creditors if they were to approve it.
The details of the proposal need to include:
- What is the arrangement for?
- Background to the proposal
- Comparison of CVA outcome to a liquidation outcome
- The financial proposal being put forward to creditors
- The proposed duration of the process
- What will happen to the business during the process?
- Set out how much creditors will receive if the company were to enter liquidation
It is required by law that 75% of the votes at the creditor’s meeting are required to approve or modify the proposal. The 75% refers to 1 vote per pound owing of those who choose to vote.
How FA Simms & Partners can help
FA Simms & Partners has a high success rate of getting CVA proposals approved by creditors. We also have a high rate of CVAs being a success as we do not prepare un-realistic pence in the £ offers to creditors. Our proposals are put together after a full review of the company and their cash flow so the recommended figures will be what the company can actually afford going forward.
We like to ensure the burden is taken off of the director from the start and so even before we are appointed we get involved with preparing the necessary paperwork needed for the CVA process and help to arrange the meetings with the creditors and members.
Download CVA Help Sheet
Download: Company Voluntary Arrangement (CVA) Help Sheet