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Company Voluntary Arrangement (CVA)

The process for a company voluntary arrangement:

  1. An appointed insolvency practitioner reviews the financial and trading position of a company in financial difficulty.
  2. The insolvency practitioner determines that a company voluntary arrangement is viable in preference to liquidation.
  3. The insolvency practitioner liaises with the directors and prepares a realistic schedule for the repayment of debts.
  4. The proposed schedule of repayments is reviewed by the company directors.
  5. The proposal is filed at court and a copy is sent to all the creditors.
  6. The creditors have a minimum of 17 days to consider the proposals before a meeting is held.
  7. The insolvency practitioner invites creditors to vote on the proposals at a creditors’ meeting.
  8. A moratorium can be applied preventing creditors from taking action against the company whilst the proposal is being negotiated.
  9. If at least 75% of the creditors (by value of debt) agree to the proposal then the CVA is approved.
  10. Another meeting is held for creditors connected with the company (such as directors and employees).
  11. If at least 50% of the connected creditors (by value of debt) agree to the proposal then the CVA can proceed.
  12. After the CVA has been approved the insolvency practitioner is appointed in the role of supervisor.
  13. The insolvency practitioner as supervisor distributes a report on the meeting and voting decisions to the court and the creditors.
  14. After the CVA has been reported to the court there is a period of 28 days within which for creditors to challenge it.
  15. The company voluntary arrangement commences.
  16. The company can carry on trading with the directors in control.
  17. The CVA supervisor collects payments from the company every month which are usually distributed to creditors annually.
  18. The CVA is monitored by the supervisor and the arrangement usually lasts for 2-5 years.
  19. If the company defaults on scheduled payments it is likely to be wound up via compulsory liquidation.

What is a Company Voluntary Arrangement? Company Voluntary Arrangement Explained

A company voluntary arrangement (CVA) is procedure that can be used when a company’s debts threaten the future of a business which still has a viable chance of recovery.

A company voluntary arrangement is not the same as administration. A company may go into administration if it was viable but insolvent, whereas a CVA is usually entered before insolvency.

Unlike other insolvency processes a CVA can avoid some of the negativity that accompanies other insolvency procedures. Although notification of a CVA is filed at Companies House, a CVA is not usually published as a legal notice under corporate insolvencies alongside winding up petitions and winding up orders, liquidation or receivership, or administration.

Employees of the company are informed and will attend a meeting where they, along with the directors and other creditors directly connected to the company, will vote on the CVA proposals put forward by the insolvency practitioner.

A company voluntary arrangement can only be made through an insolvency practitioner. It is a procedure which creates a legal agreement between the company and its creditors.

The insolvency practitioner can be approached by the directors of a company that realise their company is at risk of becoming insolvent and want to attempt to rescue the company by pre-empting any unsecured creditors from taking any more damaging action such as filing a winding up petition.

The insolvency practitioner will examine the company’s financial and trading position, and decide whether there is a chance that the company could continue to trade viably if its liabilities are rescheduled with debts being settled from future profits over an agreed period.

The arrangement can allow the directors to maintain day to day decision making and the business can continue trading. Once in place the CVA buys valuable time for the company to reorganise and restructure itself while a statutory moratorium period can be put in place.

The moratorium prevents unsecured creditors from taking further action which could hasten the demise of the company, such as issuing a winding up petition while the insolvency practitioner is drawing up proposals to put to the creditors.

If no CVA proposal can be agreed upon, the directors may have to consider voluntary liquidation or creditors may move to wind the company up via compulsory liquidation.

It should be noted that if the company has any secured creditors, secured creditors are not subject to the conditions of a company voluntary arrangement, and as such may still be able to take their own action.

At the end of the CVA period, if there are debts remaining, they may be written-off. Sometimes, it is also possible to extend the CVA to address any remaining debts, depending on the circumstances. Secured creditors are not bound by the terms, which means a bank could still withdraw their funding or push for liquidation.


Company Voluntary Arrangement Notices

The following is a list of Notices that can be published during the process of a company voluntary arrangement and what they mean:

It should be noted that a CVA is not usually published as a legal notice, however the progress and process of a company voluntary arrangement differs on a case by case basis, and in some cases these and other notices may appear in relation to companies in a CVA.

2408 Other Corporate Insolvency Notices. Notice of Meeting to Approve CVA and Proposed Distribution. A notice of a meeting of creditors and inviting creditors to submit claims.

2408 Other Corporate Insolvency Notices. Notice of Proposed Distribution. A notice of a distribution or a final distribution.

2408 Other Corporate Insolvency Notices. Giving notice of a meeting of the creditors of the company for the purpose of considering a proposal or an amendment to a proposal.

2406 Notice of Intended Dividends. Notice of the intention to declare a first and final dividend to creditors of a company or to make an interim distribution to creditors.

2457 Notice of Dividends. Notice of a declaration of a dividend, or a final dividend with no further dividends to be made.

2455 Meetings of Creditors. Notice giving details of the time and place of the initial meeting of creditors or any subsequent meeting of creditors, virtual or physical, for the purpose of considering the liquidator’s proposal for a company voluntary arrangement or any meeting of creditors due to take place.

2446 Notice to Creditors. Notice requiring creditors to prove their debts with the intention to make a distribution to creditors of the company.

2447 Deemed Consent. Notice seeking approval from creditors in respect of their proposals or a revision of original proposals.

2454 Appointment of Liquidators (Notice 2454 under Liquidation by the Court). Placed by the liquidator giving notice of the date of appointment, name and address and contact details for the liquidators.

2450 Petitions to Wind-Up (Companies) (Notice 2450 under Liquidation by the Court). Placed by the petitioner. Notice of a winding up petition having been made to the courts in respect of a limited company.

2410 Appointment of Administrators (Notice 2410 under Administration). Indicates the date of appointment and the name and address and contact details of the administrators.


See also corporate insolvency:


Creditors' Voluntary Liquidation (CVL)

Winding Up Petitions and Winding Up Orders

Members’ Voluntary Liquidation (MVL)


Company Voluntary Arrangement (CVA)


Company Insolvency Procedures

Warning Signs of Insolvency


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