Company Voluntary Arrangement Kemp Town in Kemp Town

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