Similar to IVAs where a Co enters into agreement with it's creditors for composition to satisfy it's debts or a scheme for future running of the Co.
Authorised IP must oversee proposal. Presented at a creditors meeting
Intended to prevent unnecessary winding ups. Co makes proposal to avoid winding up. The proposal put to a creditors meeting after due notice (28 days) ~ this has led to few Company Voluntary Arrangements being used
If accepted by majority of creditors an IP is appointed as Nominee in Company Voluntary Arrangement
Nominee must oversee arrangement & may be same person who proposed Company Voluntary Arrangement
Company Voluntary Arrangement will run for stated period
At date of Company Voluntary Arrangement all debts frozen & no action can be taken. Repayment made as per Company Voluntary Arrangement overseen by Nominee see Kaye v South Oxfordshire & Certain Exhibitions Limited
Court approval is required but involvement minimal.
Local Taxes frozen & rank as unsecured
Local Taxes must be apportioned to date of Company Voluntary Arrangement - any debt after - recovered in normal way not covered by Company Voluntary Arrangement. The Co will remain liable for ongoing taxes.
The Nominee has no personal liability - Company's name only on accounts
