UK Insolvency Law allows an insolvent company or a company with debt issues to enter into a Company Voluntary Arrangement (CVA) with its creditors regarding repayment of full or a part of its debts over a mutually agreed period of time. When a company is bankrupt or on its verge, it is the creditors whose money is on stake so this arrangement can only be implemented by an insolvency practitioner who will draft a proposal for the creditors followed by the meeting with the creditors to check if the terms of the proposal i.e. CVA is accepted by them. In case, the proposal gets 75% of votes from the creditors, it is considered to be accepted by all of them and the current legal action against the company, if any, ceases till the time period mentioned in the proposal. Normally, the time period in CVA is anywhere between 1 to 5 years. Once a company enters into a Company Voluntary Arrangement with the creditors, Companies House need to be informed about the same who will register or make a note of this on their credits file.
In case you are not a limited company and are a sole trader or self-employed, then you have to apply for an Individual Voluntary Arrangement (IVA).
To enter into a Company Voluntary Arrangement, it is imperative to have the agreement of the creditors. So the steps to enter into a Company Voluntary Arrangement are as mentioned below:
Usually, even if the creditors’ money is at risk, they are more than willing to support Company Voluntary Agreement even though the chances of recovering their full amount is not very bright, as opposed to the alternative measures like company liquidation.
In case your business is facing cash crunch and facing threats from the creditors and risk of forced liquidation is quite likely, entering into a Company Voluntary Agreement with the creditors is the best solution which not only give you time to deal with the problem but also loosen up the pressure from the creditors and thus might help in reviving your business.
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DNS Accountants
DNS House, 382 Kenton Road,
Harrow, Middlesex, HA3 8DP
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“I have been DNS for the last 3 months and I am very happy with the service. My account manager Sneha Gurudutta guided me and helped me with all the major/minor steps with the account setup. The weekend support they provide is really helpful. I would definitely recommend DNS to all my friends.”
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“Been with DNS Accountants for more than a year I would highly recommened their services. My account manager Sneha has been very helpful and helped with accounts and queries swiftly always! Having a good accountant means you can fully focus on your business, not worry about accounts and tax matters. Thank you DNS :-)”
“I have been extremely satisfied with the service I have been receiving close to past 1 year. Very professional, transparent and helpful. Special mention of my Account Manager Minakshi Arora who made my transition very smooth and always ready to go that extra mile to support and make customer happy. Definitely recommended.”
“I've recently set up a Ltd. Company and signed up with DNS for my accounting services. I've found it very good value for money and hugely helpful in terms of advice and guidance. I have a named Account Manager, Sneha Gurudutta, who keeps in contact with me and offers advice on line and on the phone... I'm really pleased with the service.”
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