Company Voluntary Arrangement Shader / Siadar in Shader / Siadar

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 Shader / Siadar 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 Shader / Siadar (Western Isles)

Get in touch

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


Skip to

Gallery

Other locations available for company voluntary arrangement shader / siadar
Skigersta / Sgiogarstaigh Kirivick / Cirbhig Haun / Haunn Àird Mhidhinis Port of Ness / Port Nis Na Pairceanan Claddach-Knockline / Cladach Chnoc a Lin Balivanich / Baile a' Mhanaich Ceann Hurnavay Steinis Drinishader / Drinisiadar Tom na Ba Gerinish / Geirinis Achamore / Acha Mòr Bayherivagh / Thiarabhagh Stornoway / Steòrnabhagh Port Sgiogarstaigh Beacravik / Beacrabhaic Orinsay / Orasaigh Flesherin / Fleisirin St Kilda / Hirta / Hiort Garynahine / Gearraidh na h-Aibhne Càrnan Cliasmol Rhenigidale / Reinigeadal An t-Ob Bunavoneadar / Bun Abhainn Eadarra Ceann a-staigh Chuil Leideag Uigen / Uigean New Tolsta / Bail' Ur Tholastaidh Garrabost Sgallairidh Eanacleit Calbost Portnaguran / Port nan Giùran Griomsidar Taobh Siar Vatisker / Bhatasgeir Linshader / Linsiadar Habost / Tàbost Liniclate / Lionacleit Ceann a' Chòinich Barabhas Iarach Corunna Cearsiadair Abhainn Suidhe Baile Glas Claddach Illeray / Cladach Iolaraigh Cnoc an t-Solais Lemreway / Leumrabhagh Sildinis / Shiltenish Frobost Ardvourlie / Àird a' Mhulaidh Lingarabay / Lingreabhagh Kallin / Ceallan Howbeg / Tobha Beag Gravir / Grabhair Bàgh Mòr Cladach a' Bhaile Shear Mullach Chàrlabhaigh Baleshare / Baile Sear Sruth Mòr Grenitote / Greinetobht Àird Lochskipport / Loch Sgioport East Kilbride / Taobh a' Chaolais Melbost / Mealabost Keose / Ceòs Beinn Casgro Gleann Labost Taobh Tuath Scadabay / Scadabhagh Baile nan Cailleach Aignish / Aiginis Trumaisgearraidh Borve / Borgh North Locheynort / Taobh a Tuath Loch Aineort Blashaval Baile Iochdrach Lionacuidhe South Locheynort / Taobh a Deas Loch Aineort Drimsdale / Dreumasdal Tigharry / Tigh a' Ghearraidh Broker / Brocair Seilebost Cnoc Amhlaigh Brevig / Brèibhig Raon na Crèadha Middlequarter / Ceathramh Meadhanach Àird Cumhang South Glen Dale / Gleann Dail bho Dheas Sollas / Solas Lochboisdale / Loch Baghasdail Ceann Shìphoirt Balnabodach / Buaile nam Bodach Paible Tong / Tunga Bostadh Mealasta Govig / Gobhaig Eagleton / Baile na h-Iolairne Cluer / Cliuthar Balemore Àird na Monadh Botarua / Botarubha North Glendale / Gleann dail bho Tuath Ceann a' Ghàraidh Castlebay / Bàgh a'Chaisteil Habost / Tabost Portvoller / Port Mholair Cairinis Eishken / Eisgean Five Penny Borve / Coig Peighinnean Bhuirgh Tobson Samhla Shulishader / Sulaisiadar Marvig / Marbhig Balmartin / Baile Mhàrtainn Torastay / Torastaidh Upper Bayble / Pabail Uarach Collam Àird nan Strùban Flodabay / Fleoideabhagh Croir Cleat / Cleit Geàrraidh Gadhal Seana Bhaile Grimsay / Griomasaigh Creagastrom Àird Mhìghe Uidh Cnoc Bhuirgh Garyvard / Gearraidh Bhaird Rubha Ban Balranald / Baile Raghnill Rodel / Roghadail Coire an Fhuarain Eochar / Iochdar Borve / Na Buirgh Crosbost Swainbost / Suainebost Lackalee / Leac a' Lì Àird Mhòr Dalmore / Dail Mòr Kneep / Cnip South Lochboisdale / Taobh a' Deas Baghasdail Craigston / Baile na Creige Kyles Stockinish / Caolas Stocinis Cnoc Màiri Urgha Strumore / Struth Mòr Einacleit Baile Gearr / Ballagarr Borrowston / Borghastan North Lochboisdale Greosabhagh Ranais Keose Glebe / Glib Cheois Crùlabhig Stoneybridge / Staoinebrig Tangasdal Dòun Chàrlabhaigh Leth Meadhanach Bruach Màiri Manish / Mànais Giosla Barbhas Uarach Grìminis Kirkibost / Circebost Holm / Tolm Smerclate / Smeircleit Dunganachy / Dùn Gainmhich Aird Tong / Àird Thunga Baile Gharbhaidh Claddach Kirkibost / Cladach Chirceboist Sliabh na h-Airde Liurbost Scalpay / Sgalpaigh Upper Coll / Col Uarach Clachan na Luib Ceann-na-Cleithe Carnais Sandwick / Sanndabhaig Camas an t-Saoithein Ardslave / Àird Shleibhe Holmar / Tholmair Cnoc Cuidhein Cabharstadh Lundale / Lundal Baghasdail Meavag / Miabhaig Siadar Uarach Carminish / Cairminis Rhughasinish / Rubha Ghaisinis Shawbost / Siabost Bornish / Bornais Bac Diraclett / Direcleit Barvas / Barabhas Nask / Nasg Finsbay / Fionnsabhagh Lochcarnan / Loch a' Chàrnain Kentangaval / Ceann Tangabhal Sandwick / Sanndabhaig Vatersay / Bhatarsaigh Àird Dhail Cradhlastadh Scotvein / Scotbheinn Siadar Iarach South Dell / Dail bho Dheas Callanish / Calanais Bràigh na h-Aoidhe Ceann a Bhàigh Gramsdal Iolaraigh Cuidhtinis Peninerine / Peighinn nan Aoireann Balla / Am Baile Borve / Borgh Adabroc Cille Pheadair Cnoc nan Gobhar Borve / Borgh Laxdale / Lacasdail Melbost Borve / Mealabost Bhuirgh Newmarket Buaile Dhubh Eilean Anabaich Carloway / Càrlabhagh Uachdar Kershader / Cearsiadar Kyles Scalpay / Caolas Scalpaigh Steinis Brue / Brù Knock / An Cnoc Bogach Bàgh a' Chàise Hacklete / Tacleit Earsary / Earsairidh Malacleit Grithean Ardhasaig / Àird Asaig Arivruaich / Airidh a Bhruaich Gress / Griais Ness / Nis Howmore / Tobha Mòr Tom an Fhuadain Urgha Beag Mingearraidh Grimshader / Griomsiadar Sgarasta Mhor Tobha Beag Flodaigh Tobhtaral Port nan Long Mangersta / Mangarstadh Àird Adhanais Garry Claddach / Gearraidh Cladach Àird Uig Milton / Gearraidh Bhailteas Breinis Arnol Baile Ollag Bruernish / Bruairnis Claddach Kyles / Cladach a' Chaolais Coig Peighinnean Coilleag Meavaig / Miabhaig Hushinish / Huisinis High Borve / Bail Àrd Bhuirgh Bragar Creagorry / Creag Ghoraidh Losgaintir Gearradubh / Gearraidh Dubh Gleann Tholastaidh Doune Carloway / Dùn Chàrlabhaigh Brèbhig North Dell / Dail bho Thuath Tolsta Chaolais / Tolastadh a' Chaolais Bayhead Swordale / Suardail Allasdale / Allathasdal Ruisgarry / Ruisigearraidh Kildonan / Cill Donnain Breaclete / Breacleit Clachan Sands / Clachan Shannda Cladach Chairinis Cromore / Cromor Ardvey / Àird Mhìghe Ardmore / Àird Mhòr Baghasdal Eorodale / Eòradal Hougharry / Hogha Gearraidh Ceann nam Buailtean Siabost bho Dheas Griminish / Griminis Siabost bho Thuath Crothair Pàirceanan Crois Dùghaill Hacklet / Haclait Leachcan / Leacainn Blackhouse Village Aird Lochportain Islibhig Borsham / Boirseam Rubha Dubh Cnoc an Torrain Tarbert / An Tairbeart Baile Mhic' Phàil Àird a' Mhachair Fidigeadh Cross / Cros Sgarasta Bheag Ahmore / Athmòr Baile Raghaill Geàrraidh na Mònadh Borrisdale / Borghasdal Eoropie / Eòropaidh Scarista / Sgarasta Ceann a-muigh Chuil An Cnoc Ard Ballantrushal / Baile an Truiseil Carnach Earshader / Iarsiadar Lacasdal Cill Amhlaidh Oratobht Cnoc a' Lin Maaruig / Màraig Kilerivagh / Cill Eireabhagh Daliburgh / Dalabrog Lionel / Lìonal Cialla Cliaid Carishader / Cairisiadar Guershader Torlum Horgabost Hosta Geisiadar Blathaisbhal An Gleann Ur Timsgarry / Timsgearraidh Caolis / Caolas Grìanan North Tolsta / Tolastadh bho Thuath Beitearsaig Glenside / Taobh a' Ghlinne Valtos / Bhaltos Acairseid Gabhsann bho Thuath Kyles Flodda / Caolas Fhlodaigh Lochmaddy / Loch nam Madadh Shader / Siadar Lacasaidh Gramasdail Baile Ailein Ormiclate / Ormacleit Locheport / Loch Euphort Caw / Cadha Col Àird Mhithinis Cliff / Cliobh Carragreich / Carragraich Likisto / Liceasto Strombane / Srom Ban Àird Ruairidh Ceann Loch Àird Choinnich Geocrab Lower Bayble / Pabail Iarach Ardheisker Culrigrein Dalabrog an Iar Meavaig / Miabhaig Ceann a Deas Loch Baghasdail An Leth Meadhanach Snishival / Sniseabhal Dail Beag Sidnish / Saighdinis Loch a' Ghainmhich Ardroil West Kilbride / Cille Bhrìghde Aisgernis / Askernish Garenin / Na Gearrannan Valasay / Bhalasaigh Plocrapool / Plocrapol Reef / Riof Pairc Shiaboist Srannda / Strond Bun a' Mhuillinn Breasclete / Breascleit Cuidhir Stilligarry / Stadhlaigearraidh Sheshader / Seisiadar Eoligarry / Eòlaigearraidh South Galson / Gabhsann bho Dheas Barraglom