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Company Voluntary Arrangements


A Company Voluntary Arrangement (CVA) is an insolvency process which, under the right circumstances, will enable your company to come to a formal arrangement with company’s creditors to repay debts over time and, where appropriate, allow you to pay a proportion of the debts rather than the full amount.

The CVA is legally binding and enables the company to repay an agreed proportion of its debts over a period of time – usually 1 to 3 years, but occasionally over 5 years. For the proposal to be approved, at least 75% of the creditors (by value of debt) need to agree to the proposal’s terms and therefore it is a process which requires creditor approval.

The CVA is a rescue process, providing the company with breathing space whilst it addresses the root causes of its financial difficulties

The CVA procedure is primarily adopted by insolvent businesses that want to ‘ring-fence’ historic debts to repay over a longer period of time, whilst continuing to trade. A company may be eligible for a CVA when it is insolvent and has engaged an insolvency practitioner and is able to demonstrate that the business remains a viable going concern.

Put simply, this means that the company must be able to provide evidence that it will have sufficient funds in the future to repay the debts, whilst remaining profitable and continuing to pay ongoing liabilities such as VAT and PAYE.

How does a CVA work?


Our insolvency practitioners will assist the directors in preparing a written proposal after gathering all necessary information with regards to the company’s affairs.

Once the proposal has been agreed by the directors and the insolvency practitioner, they will write to all creditors and invite them to vote at a creditors’ meeting.


A Moratorium can be applied for from the court, which provides the company with ‘breathing space’, preventing suppliers and other creditors from taking action against the company whilst the proposal is negotiated.

Creditors’ Meeting

The creditors’ meeting is an opportunity for creditors to discuss the proposals with the insolvency practitioner and voice any concerns about the viability of the proposal. The creditors may attend the meeting in person, or they can vote by proxy via email or post. Directors are not obligated to attend the meeting of creditors.

If at least 75% of the creditors (by value of debt) agree to the proposal then the CVA is deemed approved.

There will also be a separate meeting held for the connected creditors, such as employees or directors. At least 50% of the connected creditors (by value of debt) need to agree to the proposal for it to be successful.

Insolvency Practitioner’s Report

Once the CVA has been approved and the Insolvency Practitioner has been appointed as the Supervisor, they will distribute a report to the court and the creditors detailing the meetings that were held and a summary of the voting.

CVA Commences

The CVA is confirmed subject to the proposals receiving 75% of the voting at the meeting of creditors. The company then makes scheduled payments to the creditors via the Insolvency Practitioner to repay the debt. The company is protected by the arrangement providing all scheduled payments are made. If the company defaults on a payment then it is likely that the CVA will fail and the company will be wound up via compulsory liquidation.


One80’s insolvency practitioners have been developing successful CVA proposals for many years and have years of experience in negotiating with creditors, and supporting a successful restructuring programme to secure the company’s long term future.