A Company Voluntary Agreement is the most dynamic insolvency procedure that has ever been put into law – also known legally as a Company Voluntary Arrangement.
When a company cannot pay its unsecured debts but has a good prospect of keeping the sales rolling in, then there is no better way of trading on than with a Company Voluntary Agreement.
Many companies often make the mistake of liquidating their company because of the lack of advice. Not many insolvency practitioners provide a full option package, especially if they have never put together a Company Voluntary Agreement before.
Pressure mounts upon directors when adverse financial information hits the public domain and directors telephones will ring ten times more than the PPI firms could manage. So it is understandable that the few recommendations to set up a Company Voluntary Agreement would be lost in the calls to liquidate.
Directors should slow things down and take careful advice and follow it up with a little research on the Internet, as it is generally quite good. It has probably taken years to build up the company and it would be a shame to close a limited company just because a Company Voluntary Agreement has not been fully explored.