CVA – The advantages of company voluntary arrangements

If you are considering entering into a company voluntary arrangement (CVA), then you should weigh up the pros and cons of the process first, to decide whether or not a company voluntary arrangement is right for you or your business.

There are a number of advantages to applying for a company voluntary arrangement.

• It is legally binding.
• It is a private matter, so it will not appear in the press.
• It is cheaper than admin istration or liquidation.
• It avoids the need for an Insolvency Practitioner investigate the affairs of the company.
• It stops creditors taking any further action against you, unless your company fails to fulfil the terms of the arrangement.
• It allows the directors to maintain day-to-day control of the business.
• It allows the core business to trade on, providing the company directors with continued income.
• It provides the company with breathing space so the company can put a rescue plan together, allowing time for the company to be  restructured without  the threat of creditor action.
• It provides you with more time to deal with your debts, preventing creditors from taking enforcement action via the court system.
• The Government, banks and large creditors are generally prepared to work with troubled businesses to save them.
• It allows structured payment of crown tax arrears.
• It is a cost effective method for avoiding outright insolvency for a company with financial problems.
• It is a flexible w ay of dealing with a companies debt problems because the process involves company directors.

It is really important that you also look into the disadvantages of company voluntary arrangements before making the decision to apply for one.

More information

• CVA – What is a company voluntary arrangement?
• CVA – The company voluntary arrangement process
• CVA – Who needs a company voluntary arrangement?
• CVA – When to apply for a company voluntary arrangement
• CVA – How to apply for a company voluntary arrangement
• CVA – The disadvantages of company voluntary arrangements
• CVA – Insolvency and company voluntary arrangements