Company Voluntary Arrangement (CVA)
A CVA is an arrangement between your struggling company and its creditors which secures it with a protective fence from attack from creditors, including HMRC.
It allows your financially distressed but underlying viable company to repay its creditors, usually a significantly reduced amount. The creditors accept a sum of money as a way of settlement towards the debts which are owed to them, over a period of usually 3 to 5 years.
You could benefit from a CVA if you have cashflow problems, mounting debts and need to find an effective solution.
The main benefit of a CVA is that it allows a fundamentally good business that has become saddled with debt and cashflow problems, to survive and trade out to recovery and make money again. The directors stay in control of the company and can continue trading, giving them the breathing space they need to fix the underlying problems to turnaround the business. It also allows the opportunity for the business to be sold or refinanced.
Why Choose A CVA?
These advantages make it one of the most preferred rescue options for a troubled company because company stakeholders get the best chance to recover as much of their monies as possible.
To make a CVA successful requires the support of an experienced turnaround advisor/specialist.
If you have cashflow and debts problems and are considering your options then a CVA may be the solution for you.
To obtain approval, the rules require at least 75% in value of the creditors voting to agree. And once the proposal has the go ahead, all unsecured creditors are bound by the arrangement.
We can help arrange this to make sure you have the best chance of a successful outcome when negotiating with your creditors and HMRC.
But you must act quickly and seek professional help early to maximise your chances of successfully negotiating an agreement that works.
What Are The Benefits?
- You are protected from creditors and HMRC threatening the company with winding-up petitions
- The directors remain in control and can continue running the business
- You can focus on rapidly improving cashflow and the company financial position
- HMRC and other creditors are more supportive – they now have a vested interest in seeing your company recover back to profitable trading, allowing them to recover a higher percentage of their monies compared to forcing it into liquidation
- You can rapidly reduce costs with increased flexibility to restructure the business – e.g. terminate property leasing obligations, staff costs and onerous contracts
- No announcement is required to your customers
How WE Help
We help you successfully manage the challenges of a CVA
A CVA is a challenging situation for the directors to handle and expert help and advice will ensure you navigate it successfully.
Clarity Transformation can help you turnaround the business and recover it back to health.
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