Understand the position
Clear information before you decide what to do next
Understand how a Company Voluntary Arrangement can allow a viable insolvent company to repay creditors over an agreed period.
- Designed for a viable but insolvent company
- Proposed through a licensed insolvency practitioner
- Requires creditor approval by value
A CVA must be affordable
The proposal is based on what the company can realistically contribute after meeting ongoing costs and taxes. Forecasts, funding needs and operational changes should be tested before terms are put to creditors.
Creditors vote on the proposal
An insolvency practitioner prepares and supervises the arrangement. Approval requires the statutory creditor majority by debt value. Once approved, the CVA binds affected unsecured creditors subject to the terms and legal rules.
Directors retain day to day control
Unlike administration, directors normally continue running the company while making agreed contributions. Failure to meet the terms can cause the CVA to fail and may lead to liquidation.
Practical next steps
What to prepare now
A clearer picture helps the first conversation focus on realistic options.
- Test future profitability and cash generation
- Identify debts that may fall outside the proposal
- Prepare an integrated cash flow forecast
- Compare the CVA outcome with administration and liquidation
Common questions
Company Voluntary Arrangement (CVA) FAQs
What creditor approval does a CVA need?
At least 75 per cent by value of creditors who vote must approve the proposal, subject to additional connected creditor voting rules.
Can the company keep trading during a CVA?
Yes. Continued trading is a central feature, provided the company can meet ongoing liabilities and the agreed contributions.
Does a CVA include secured debt?
A CVA does not normally alter secured or preferential creditor rights without their agreement. The debt structure must be reviewed carefully.
This page provides general information and is not legal, tax or financial advice. The right action depends on the company’s circumstances. Formal insolvency procedures must be handled by an appropriately authorised professional.