Company Voluntary Arrangement Black Rock in Black Rock

Contact Us

Company Voluntary Arrangements or CVAs, as they are also known, are one of the ways in which a limited company, which is classed as insolvent, can pay back their debts to creditors over a fixed period of time.  Insolvency is when a company is unable to pay back their debts as they fall due or if they do not have enough assets to cover its debts, for example, if the value of assets falls less than the amount of liabilities. 

If you think this may apply to you and your company, don’t fret, we can definitely help. If your company is deemed insolvent, then the director no longer has a primary responsibility towards the care of its shareholders but its creditors instead.  It is similar to bankruptcy, but bankruptcy is the term used only for personal debt, whereas insolvency is the terminology used for business debt.

Find Out More

Many companies across the UK find themselves insolvent and every circumstance of insolvency is different to the next.  That is why there are several ways that directors can consider to ensure that the matter is best resolved.  It is recommended that companies seek sound advice to ensure that the best solution is chosen, and this should be chosen sooner rather than later. 

There are in fact four different procedures to consider if you feel as though your organisation is heading towards insolvency that may help rescue the situation before it gets bad.  These include Administration, Administrative Receivership, Liquidation and finally, as discussed below, Company Voluntary Arrangements.   This is one of the lesser known insolvency procedures available for businesses.

What is a Company Voluntary Arrangement?

A Company Voluntary Arrangement is an agreement with your company’s creditors to allow more time to pay back debts. This is a legally binding agreement as it stands and 75% of creditors, by value, must support the proposal, otherwise it will not be approved. 

After the proposal has been approved by all involved, any unsecured creditors are bound to it and your limited company can continue trading, even those creditors that did not vote (by choice or no notice) have to act within this arrangement.   Therefore, no unsecured creditors are able to take legal action against your organisation outside the CVA.

It is certainly one of the most flexible insolvency methods available as, apart from the procedure and content of your proposal, which are both dictated by law, the rest of this arrangement is determined by the company, with the hope that the creditors will agree to it. 

Unlike other procedures which may be considered, this has no effect on employee contracts so jobs can be saved, unless redundancies are a necessary part of the procedure, for example, during a restructure.

The arrangement will usually last over a period of 3-5 years and is closely monitored by a licensed insolvency practitioner who acts as a supervisor to the arrangement.  The time agreed on will help the business to repay all or some of its debts whilst still trading and remaining under the management of its own directors. 

How Much Does a CVA Cost?

A CVA can only be granted through an insolvency practitioner who not only charge for the application process but also the administration process.  It is difficult to say exactly how much the Company Voluntary Arrangement will cost as each case is unique and varies depending on total number of creditors, employees, position of the bank and what level of negotiation is needed. 

There are many people involved within the arrangement, and that does mean that a lot of communication needs to take place between not only to the company and its creditors but also the company’s stakeholders.  Like many other insolvency procedures, the sooner the ball is rolling the easier, and cheaper, the case can be to handle.  Professional insolvency practitioners can give you an idea of cost once they fully understand your company’s financial position.

Pros and Cons of a Company Voluntary Arrangement

Pros

·         Can improve cash flow within a short amount of time

·         Pressure from tax, VAT and PAYE is lifted whilst the agreement is being prepared

·         Company remains operational as a separate legal entity and managed by its existing team

·         Business contracts, accreditations and licenses are likely to be unaffected

Cons

·         It is possible that there may be disagreements over the proposed CVA between directors.

·         If a single creditor makes up a large percentage of the company’s debt, then they have a strong position to negotiate deals on their terms

·         It will have a negative effect on company’s credit rating and obtaining future credit may be an issue well after the arrangement has ended.

·         The arrangement does not legally bind secured lenders, so they can still take legal action.

CVA Process in the UK

The application process for a CVA in the UK can only begin if all the directors or members agree and this must be done with an insolvency practitioner.  The insolvency practitioner will then start to work out a plan and arrangement as to how much debt the company can pay back and a payment schedule to ensure this is achieved.  This must be completed within a month of being appointed to supervise the CVA.

One the arrangement has been written up, the insolvency practitioner will write to all creditors and provide necessary information and invite them to vote on it.  As mentioned earlier, for the Company Voluntary Arrangement in Black Rock to be granted, it must be approved by creditors who are owed at least 75% of the debt.  If this cannot be achieved, then the company may face voluntary liquidation, whereby its assets are used to pay off its debts, the business will stop trading and will be removed from the companies register at Companies House.

If the voting is successful and works in the company’s favour, then the scheduled payments must be made to the creditors via the insolvency practitioner over a set amount of time and until the agreed amount is paid off.

Get In Touch

We cover Black Rock (East Sussex)

Get in touch

We aim to get back to you in 1 working day.


Skip to

Gallery

Other locations available for company voluntary arrangement black rock
Holmes's Hill Bowlers Town Moulsecomb Broomgrove Bulverhythe Chapel Row Ratton Village Brightling Camber Etchingham Whitehawk Best Beech Hill Little Horsted Broad Oak Cornwell's Bank The Pound Jenkins' Green Barcombe Broomham Cackle Street Peasmarsh Durgates Ninfield Sharp's Corner Pebsham Millbrook East Saltdean Aldrington East Hoathly Blackness Heron's Ghyll Laughton Hazard's Green Guestling Green Hellingly Balcombe Green Rickney Roser's Cross Church Wood Witherenden Hill Pevensey Ridgewood Patcham Little Common Friar's Hill Hollington Park Sidley Mutton Hall Hove South Street Hamsey Old Town Town Row Marle Green Southover Crowlink Battle Bishopstone Southease Furner's Green Staplecross Berwick Round Hill Pell Green Goatham Green Lower Willingdon Foul Mile Piltdown Burnt Oak Hale Green Hollington Pett Level Harbour Heights South Malling Jury's Gap Fairwarp Burwash Common Burgh Hill Windmill Hill Grisling Common St John's Sparrow's Green Hampden Park Town Littleworth Hollingdean Catsfield Stream Southern Cross Broomsgrove Fletching Common Ringles Cross Beckley Portslade-by-Sea Westfield Kingston near Lewes Oxley's Green Coleman's Hatch Upperton Hooe Peacehaven West Hill Splayne's Green Mott's Mill Cousley Wood Mount Ephraim East Chiltington Bodle Street Green Pett Birling Gap St Anne's Duddleswell North Chailey Hawkhurst Common Magham Down Plumpton Green Quabrook Burwash Weald Westdean Horns Cross Heighton Street Clayhill Earl's Down Fairlight Chiltington Wannock Bells Yew Green Broyle Side Chilley Green Friston Hammerwood Bachelor's Bump Hartwell North End Winchelsea Black Rock Bardown Meads Cuilfail Chelwood Gate Argos Hill Waldron Down Five Ash Down Blacklands Shortbridge Chuck Hatch Skippers Hill East Blatchington East Guldeford Wood's Green Northease Dittons Portslade Village Stonegate Warbleton Gun Hill Selmeston Poundford Guestling Thorn Wallcrouch Newbury's Upper Wellingham Twelve Oaks Wood's Corner Newbridge Old Town Birchden Laughton Common Dukes Green Bodiam Broadstreet Green Ditchling Davis's Town Darwell Hole Herstmonceux High Wickham Brighton and Hove Withyham Saltdean Ovingdean Coldean Stanmer Firle Mill Corner Rockrobin Horam Streat Mount Pleasant Steel Cross Fairlight Cove Upper Dicker West Blatchington Kent Street Dodd's Hill Cripp's Corner Churches Green North Corner North Moulsecoomb Chailey Stone Cross Godleys Green Lidham Hill Seaford Chilsham Hall's Close Barcombe Mills Lower Horsebridge Upper Hartfield Chalvington Litlington Snagshall Boreham Street Normans' Bay Beckley Furnace Eastbourne Langney Whatlington Wych Cross Whydown Glyne Gap Wallands Park Rotherfield Red House Common Whitesmith Tidebrook Broad Oak Silver Hill Woodingdean Blackham Netherfield Groombridge Winton Northiam High Hurstwood Little Norlington Isfield Westham Lunce's Common Cowbeech Hill Tilsmore Hollingbury Penhurst Moulsecoomb East Moulsecoomb St Leonards Green Dodd's Bottom Woolbridge Flowers Green Lower Cousley Wood Green Street Ashburnham Forge Little Bayham Cottenden Clive Vale Horney Common South Chailey Caneheath Jarvis Brook Buxted Frant Lewes Rushlake Green Alfriston Blackness Rushy Green Glynde Beddingham Mark Cross Framfield Cackle Street Beacon Down Ely Grange Canadia New Town Burwash Silverhill Park Lions Green Icklesham Crumbles Mark Street Chapman's Town Wadhurst Rye High Cross Ore Rye Harbour Danegate Hollingrove Wivelsfield South Heighton Caldbec Hill Ponts Green Silverhill Mayfield Downside Spithurst Tile Hurst Newhaven Rocks Park Wellbrook Cade Street Pound Green Kemp Town Chelwood Common Cross in Hand Down Street Uckfield Cooper's Corner Hadlow Down Golden Cross Roedean Tolhurst Tompset's Bank Teasley Mead Baldslow Poundfield Sweethaws Exceat Highgate Chiddingly Wivelsfield Green Steven's Crouch Piddinghoe Cowbeech Falmer Three Cups Corner Hankham Rye Foreign Norton Butcher's Cross Terrible Down Shover's Green Birchett's Green Filching Rodmell West Marina Henley's Down Mountfield Castle Hill Langney Village Ditchling Common Milton Street Trull's Hatch Ringmer Cogger's Cross Foxhunt Green Mount Pleasant Willard's Hill Crowhurst Grove Hill Denton Westmeston Withdean Founthill Maresfield Punnett's Town Heathfield Brighton Golden Cross Halton Shortgate Crowborough Stone Cross Poundgate Iden Broadland Row Fletching Friday Street Cooden Horsted Green Great Maxfield Eridge Green Swiftsden Norlington Telham Five Ashes Belmont Burlow Honey's Green Jumper's Town Ashton Green Peacehaven Heights Lyewood Common Primmers Green Park Corner Sutton Wartling Pounsley Cackle Street Plumpton Tarring Neville Starr's Green St Leonards-on-Sea Dale Hill Crowborough Warren The America Ground Hartfield Brownbread Street Robertsbridge Ripe Halland Swaile's Green Holton Hill Beachlands Balls Green Flackley Ash Maynard's Green East Dean Wickstreet Winchelsea Beach St Helen's Wood Telscombe Sharpsbridge Danehill Hooe Common Jevington Salehurst Watermill Landport Bevendean Flimwell Telscombe Cliffs Waterhall Holtye Maresfield Park Riseden Brede Lunsford's Cross Cock Marling Carter's Corner Foulride Green Union Street John's Cross Glenleigh Park Boarshead Playden Catsfield Wilmington Green Newick Old Heathfield Harley Shute Polegate Cliff End Houghton Green Muddles Green Chapel Cross Gallypot Street Sleeches Cross Arlington Collier's Green Berner's Hill Ticehurst Palehouse Common The Platt Pestalozzi International Village Folkington Marden's Hill Alciston Coggins Mill Fisher's Gate Ginger's Green Bexhill Rottingdean Upper Horsebridge Vines Cross Northbridge Street Sheffield Green Broad Street Potter's Green Sedlescombe Whitehill Iford Cliffe Friar's Gate Barcombe Cross Udimore Little London Ewhurst Green St Helen's Alderbrook Cooksbridge Eckington Corner Buckham Hill Four Oaks Forest Row Rose Hill Nash Street Offham St Anthony's Hill Lower Dicker Blackboys Thunder's Hill Dallington Peter's Green Vinehall Street Hurst Green Wilmington Nutley Three Leg Cross Budlett's Common Mile Oak Stunts Green Waldron Pevensey Bay Westdene Rusher's Cross Hailsham Three Oaks Marsh Green Glyndebourne Roselands Mark Cross Hangleton Preston Bexhill-on-Sea Hastings Eason's Green Willingdon Trolliloes West Firle Chitcombe Russell's Green Etchingwood Bohemia