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What is a CVA? Company Voluntary Arrangement Explained

If your company is experiencing financial difficulties, get in touch with an Insolvency Practitioner as soon as possible. The earlier you act, the greater your range of options, and it may be possible to save the business.

A Company Voluntary Arrangment or a CVA is a tool that is different to any other insolvency procedure, giving a business a viable chance of recovery. 



A CVA is a formal procedure in the form of a legally binding agreement between your business and its creditors. A CVA will set out how any repayments of a company's debt should be made to creditors. A CVA is a favoured route as it often delivers a better outcome than a business going into administration or liquidation.

The purpose of a CVA is to give the company sufficient time to negotiate with unsecured creditors. This includes:
  • Suppliers
  • HMRC
  • Employers
  • Landlords
the purpose is to generate liquidity whilst maintaining the business as a 'going concern.'

What are the benefits of a CVA?

There are significant benefits to having a CVA in place these are:
  • All debts are frozen - no interest can be charged
  • Creditors cannot take enforcement action to recover their debt
  • A CVA means the business can still trade this means that the business is still able to generate income in order for it to be able to repay some of its debts 
  • A CVA allows the company time to reorganise and restructure itself
  • A CVA should enable a company to avoid any negativity of other insolvency procedures, this is due to a CVA not normally being advertised but it is registered at Companies House and employees of the business must be informed. 


A CVA comes into force at the time when the company's creditors approve the CVA proposal that has been made in respect of the company. But it is worth noting that it is common for a CVA document to specify a different date from which any provisions apply. 

A proposed CVA is considered and voted on by the company's creditors by the following permitted procedures:
  • Email
  • Correspondence 
  • Internet meetings 
For a CVA proposal to be approved by the creditors it requires a vote in favour by at least 75% of the creditors who have voted on it. 


You can apply for a Company Voluntary Arrangement if all directors and members agree. The CVA must be applied for and administered by an insolvency practitioner.
The insolvency practitioner will put together a repayment proposal covering the amount of debt you can pay and a payment schedule to the company’s creditors. 

The proposal must show that the CVA offers a better return for creditors than liquidation. 

The CVA must be approved by 75% (by debt value) of the creditors. No more than 50% of unconnected creditors may vote against the CVA.


How Moore uk can help

Our expert insolvency practitioners will review your situation to determine whether a CVA is the best option for you. 

If we determine a CVA is the right solution, we will support you through the entire process including:
  • Preparing a report to Court (the Nominees Report)
  • Supporting the company directors to put together a CVA proposal that is both realistic and attractive to creditors
  • Writing to creditors about the arrangement and invite them to vote on in
  • Ensuring the terms of the CVA proposal are met
  • Overseeing the CVA whilst allowing the directors to run the business
  • Reviewing the company’s financial performance (usually on a six monthly or yearly basis) to ensure the company is complying with the terms of the CVA proposal