Company Voluntary Arrangements (CVA)

A Company Voluntary Arrangement, or CVA, is a formal procedure designed to help an insolvent company to alleviate creditor pressure and ultimately avoid liquidation.

This option may be considered where a company is seeking to repay its debts and has a viable prospect of recovery.

Under a CVA, a company will normally pay a set monthly sum to its creditors via a licensed insolvency practitioner, over an agreed timescale of up to five years. At the end of the period any outstanding debt will normally be written off.

A CVA can offer a cost-effective approach to dealing with insolvency, helping to quickly reduce costs and improve cash flow while allowing the directors to maintain control of the company. It also affords a company protection from legal action, including County Court Judgements and Winding up Petitions.

When you enter into a CVA, there is no requirement to publicly advertise the fact, although Companies House will make a record on the company’s credit file, which could affect its ability to obtain credit.

At Gibson Booth, we can work with you to discuss your options and put together an appropriate CVA proposal. For further advice and assistance, please contact our expert team.