If your limited company is insolvent, it can use a Company Voluntary Arrangement (CVA) to pay creditors over a fixed period. If creditors agree, your limited company can continue trading.
How to apply
A company or limited liability partnership (LLP) can apply if the directors or members agree.
You can only get a CVA through an insolvency practitioner. They will charge you to apply for the CVA and also to administer it.
What happens next
The insolvency practitioner will work out an ‘arrangement’ covering the amount of debt you can pay and a payment schedule. They must do this within a month of being appointed.
They’ll write to creditors about the arrangement and invite them to vote on it.
The CVA is approved if 75% (by debt value) of the creditors who vote agree.
You’ll need to make the scheduled payments to creditors through the insolvency practitioner until these are paid off.
Unless three quarters of those who vote approve the CVA, your company could face voluntary liquidation.
If you do not meet the agreed payment schedule, any of your creditors can apply to wind up your business.