Company Voluntary Arrangement (CVA)
A Company Voluntary Arrangement, or CVA, is a legally binding deal between a company and its creditors to repay some or all of its debts over a fixed period, usually three to five years, while the company keeps trading. It becomes binding on all unsecured creditors if those representing at least 75% by value of those voting approve it. It is one of the main UK business rescue tools. Insolvency Act 1986, Part I; gov.uk
- What it is
- A binding deal to repay creditors over about 3 to 5 years
- Approval needed
- 75% by value of creditors who vote
- Who keeps control
- The directors, supervised by a practitioner
- Best for
- A viable business that can afford realistic monthly payments
- Risk
- Failing the CVA usually leads to liquidation
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How a CVA is agreed
A CVA is proposed with the help of a Licensed Insolvency Practitioner, who acts as nominee and then supervisor. Creditors vote on the proposal, and once approved it binds all unsecured creditors.
When a CVA is the right tool
A CVA works when the business can trade profitably going forward but is weighed down by historic debt such as HMRC arrears or supplier balances, for example after a one-off shock, and can afford a realistic monthly contribution from future profits. It avoids liquidation, lets you keep trading and keep control, and protects jobs. It requires honest, achievable forecasts, because failing a CVA usually leads to liquidation. If the business isn't viable, liquidation is usually more honest and cheaper.
Related data
Our 2025 insolvencies by type breakdown: How rare CVAs are next to liquidations and administrations, in numbers. Every page on our data hub names its official source.
Common questions
Does a CVA affect my credit and contracts?
The company enters a public arrangement, which suppliers and lenders can see, so terms may tighten. But it avoids the far greater damage of liquidation and lets the business continue.
What happens if I miss CVA payments?
The supervisor can terminate the arrangement, which usually triggers liquidation. That is why the monthly figure must be realistic from the start, based on honest forecasts.