Company voluntary arrangement
A supervised agreement that changes how a company deals with qualifying creditor debts.
A company voluntary arrangement is a formal proposal to compromise or rearrange a company’s debts. If approved under the relevant rules, it binds the company and the creditors caught by the arrangement. Directors commonly keep running the company while an insolvency practitioner supervises delivery.
What the proposal must explain
A CVA may offer contributions from future trading, asset sales, new investment or a combination. Creditors need enough information to compare the proposal with the realistic alternatives, including what they might recover in an insolvency that follows failure.
The proposal should identify the debts and creditors affected, the funding and duration, how claims will be assessed, the supervisor’s remuneration and what happens if the company cannot meet its obligations. A trading forecast is an assumption to test, rather than a promise of a dividend.
How approval works
Directors usually initiate a proposal with an insolvency practitioner acting as nominee. An administrator or liquidator can propose one when the company is already in that procedure. Creditors vote under statutory value-based rules, with safeguards relating to connected creditors; members consider the proposal through their own process.
Court involvement in filing, supervision or a challenge should not be confused with a court approving every ordinary CVA. The outcome of the creditor decision and the statutory rules determine approval and effect.
Technical detail
In Great Britain, the ordinary creditor approval threshold is at least 75% in value of those voting, subject to the unconnected-creditor safeguard and other rules. Secured and preferential rights cannot simply be reduced without the necessary consent. Northern Ireland’s own Order and Rules must be used for its decision process.
Who runs the company afterwards
The supervisor oversees the arrangement and distributes money in accordance with its terms. The directors usually retain operational control, unless another procedure or the arrangement itself changes the position. The company must also meet liabilities that fall outside the CVA and keep its normal records and filings up to date.
Creditors should retain notices, supporting documents and payment records. They should check whether their claim is included, disputed or excluded, and whether the proposal affects continuing supply or lease obligations.
Protection, challenge and failure
A CVA does not by itself provide the general moratorium associated with administration or the separate corporate moratorium. Any protection must be identified under the relevant procedure or court order.
There are time-limited routes to challenge an arrangement for specified grounds, including unfair prejudice or a material irregularity. If the arrangement fails, its terms and the law determine the consequences. Administration or liquidation may follow; repayment in full is not guaranteed.
The Scottish framework
For Scotland, Part I of the Insolvency Act 1986 operates alongside the Insolvency (Scotland) (Company Voluntary Arrangements and Administration) Rules 2018. Use the Scottish procedural requirements for the nominee’s report, creditor decisions, supervision and completion.
A company CVA is not a Scottish protected trust deed or Debt Arrangement Scheme. Those address different debtors and legal structures.
The process, at a glance
- Build a supported proposal. The company and nominee assess viability, creditor treatment, funding and the likely alternative outcome.Process stage — practical timing varies
- Issue the information and notices. The proposal, nominee material and decision notices go through the required creditor and member procedures.Statutory milestone — check its trigger and exceptions
- Creditors and members consider it. The statutory voting rules and safeguards determine whether and how the proposal is approved.Statutory milestone — check its trigger and exceptions
- Supervisor oversees delivery. The company makes contributions or performs the agreed steps. Progress and payments follow the terms and statutory reporting requirements.Process stage — practical timing varies
- Complete or terminate. The supervisor records the result. The terms determine what happens if obligations have not been met.Statutory milestone — check its trigger and exceptions
Sources & review
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Initial source-based editorial review: 26 Oct 2026. Next scheduled review: 26 Nov 2026. Substantive changes are reviewed before publication.
Source-checked editorial overview. It does not assess an individual case or replace the current legislation and court directions.
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