Company Voluntary Arrangement
A company voluntary arrangement is a recognised legal procedure, under the provisions of the Insolvency Act of 1986 that enable a company to enter into a binding agreement with its creditors detailing how the company's debts and liabilities will be dealt with, and allows the directors to retain the control of the company.
In essence a company voluntary arrangement allows a company with historical cash flow problems to repay its liabilities, either in part or in full (including the Inland Revenue and VAT) over a period of time. Once the company's liabilities have been restructured any monies generated by the company e.g. book debts can be used as working capital rather than paying its old debts.