Benefits of a CVA

• Can quickly improve company cashflow
• Stops pressure from creditors including HM Revenue & Customs and covers all tax arrears
• Can be implemented quickly even if a winding up petition has been issued
• Not advertised locally or in the Gazette
• Directors and shareholders retain supervised control of the company
• No requirement to report to the Insolvency Service on the conduct of directors
• Significantly lower costs than Administration or Compulsory Liquidation

A Company Voluntary Arrangement (CVA) is an alternative to liquidating your limited company allowing it to trade out of its financial difficulties over a specified period of time.  It allows you as a director to retain control of your company and continue to trade without the burden of historical debts that can be a significant drain on cashflow.

Debtfocus will conduct a full review of the company’s cashflow and restructure the monthly payments to establish the amount affordable and the period over which it is to be paid (usually 60 months).

CVA's provide a higher return to creditors than the alternative of Compulsory Liquidation due to the huge saving in associated costs and are therefore are widely recognised across the industry.  HM Revenue & Customs have a department set up solely to consider proposed CVA's and providing it can be shown the Company can trade at a profit they are more than happy to consider the offer on the basis they will get a much better return.  They are often willing to put any enforcement action on hold that may be in progress.
We will assist you every step of the way in restructuring the Company to ensure it is profitable and draw up the company proposal.

Once the proposal is agreed by creditors they cannot demand any changes to the proposal and providing the company maintains the agreed payments it will be debt free within the agreed time scale.

Advantages of a CVA:

• Your company pays one simple, affordable monthly payment to its creditors.
• All the costs and fees involved in an CVA are taken from your monthly payment.
• All interest and charges on the unsecured debts are frozen.
• Your company is protected from any further court or bailiff action.
• On successful completion of the CVA all outstanding debt is written off.
• CVA’s are not published in your local newspaper or the London Gazette.
• It will not impact on your ability to act as a company director.

Your Commitment In An CVA:

• The company will need to work in line with the predicted cash flow forecast for the term of the CVA.
• You will agree not to take any further credit for the duration of the CVA.
• Any additional company profits will be made available to your creditors.

The CVA Process:

Once it has been agreed that a CVA is the best debt solution for your company the following process will be carried out:

• You will be asked to provide documentation which confirms the company’s cash flow and details of all company assets and liabilities.
• Once this is received we will draft a CVA proposal on your behalf.
• Once the proposal is signed it is circulated to your creditors and a date for the meeting of creditors and shareholders is set.
• The meeting of creditors will be held and your creditors will vote on acceptance of your proposal.
• After the meeting has been passed the monthly payments will commence.
• Once all the payments have been made and the terms of the arrangement are met you company will be debt free.

To conclude, a CVA is a great way for your company to offer an affordable monthly repayment to your creditors for a reasonable period of time in settlement of its debts, whilst protecting your company assets, hopefully leaving you with a profitable company for the future.