A
company
voluntary arrangmeent represents a significantly
lower cost alternative to administration or receivership.
Company voluntary arrangements can improve liquidity and
cashflow quickly. The proposal of a CVA confirms to creditors
that you are being pro active and that you are attempting
to maximise their interest.There are strong arguments to
preserve a viable company including preserving goodwill,
liquidation costs and a reduction in the value of assets.
If a company is insolvent creditors interests must be maximised.
The initiative is two fold as it can be beneficial to the
turnaround of the company. A
company
voluntary arrangement is also an invaluable
tool to terminating employment contracts, leases and onerous
customer and supply contracts. The need to act decisively
at an early stage will also stop any creditors from potentially
winding up the company should they decide to progress a
claim through the County Court.
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This may confirm the company's insolvency
and a petition to wind up the company may well follow,
i.e. a statutory demand for more than £750. Remember
failure to maximise creditors interests could lead to
personal liability with further inferences to wrongful
trading. The preparatory period for a CVA is typically
two to eight weeks. Initial information required would
be where is the business based, turnover, legal status,
assets, goodwill, management, creditors etc.
A well written CVA can terminate
landlords leases with little or no cost, directors and/or
managers contracts can also be terminated. Other benefits
within the process will alleviate pressure from PAYE,
VAT and HMRC and quickly improve cashflow. A CVA from
a creditors point of view is positve as they, ultimately,
receive a dividend on their debts. Click on the enquiry
button above to see how a
company
voluntary arrangement can work for you.
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