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Corporate Insolvency

Corporate Voluntary Arrangement (CVA)

A CVA is a viable option where there is a strong commercial business, but the company has come across some unfortunate times. This option will give you time, space, and legally protects you from creditor actions. It will preserve jobs, assets and investments, whilst easing financial pressure.

A CVA is a legally binding agreement between a company and its creditors, whereby the Company agrees to repay a fixed monthly amount, over an agreed period of time. The payments need not be 100p in the £ and the balance is written off.

If you enter into a CVA, the debts are frozen. The creditors cannot threaten your business with statutory demands or other legal action. The company places a legal ring-fence around itself in respect of its outstanding debts, giving it time and space to move forward.


Suitable where the company appears viable, but cannot continue trading in its current form.

Administration is a rescue tool for insolvent businesses. When a company enters into administration it is protected from creditors commencing or continuing legal action against it.

Administration is often used to allow a sale of the company’s business and assets to another entity, which ensures the continuity of business and employment.

This process can be done very quickly; where the business and assets are valued and a purchaser found prior to administration, the business and assets can be sold immediately upon the appointment of an administrator. This has become known as a “pre pack” administration and is a powerful rescue tool that is available.

A company may enter into administration with the aim of:


Suitable where there are insufficient assets to meet liabilities and the company is no longer viable.

Creditors Voluntary Liquidation (CVL)

A board meeting is held to resolve that the company cannot continue to trade and that it should be placed into liquidation. Shareholders and creditors meetings are then called.

The meeting of shareholders resolves to place the company into liquidation and appoint liquidators.

The subsequent meeting of creditors receives a short report on the company and ratifies the appointment of the liquidators.

The liquidators’ role is to realise the company’s assets for the benefit of its creditors and pay a distribution to them.

Members Voluntary Liquidation (MVL)

An MVL is an option available to solvent companies, usually when there is a breakdown of relationships between key stakeholders, changes in market conditions, or members simply wishing to retire.

The directors produce a schedule of assets and liabilities, and make a statutory declaration that the company’s debts will be paid within twelve months from the date of liquidation. A liquidator is appointed by the shareholders.

Once all the funds have been distributed to creditors, the surplus funds are given back to the shareholders. There is no requirement for the insolvency practitioner to investigate the conduct of the directors.

There are also tax advantages and planning opportunities with an MVL that we can assist and advise you upon.

Compulsory Liquidations

This is also referred to as a winding up, and happens as a result of a Court order. A compulsory liquidation takes control completely away from the directors, as the Official Receiver is initially appointed as the liquidator to deal with the winding up of the affairs of the business.

Where appropriate the Official Receiver will appoint an Insolvency Practitioner to act as a liquidator if the company has sufficient assets that need to be realised and distributed. A winding up order causes an immediate cessation of trading.

The liquidator has the same duties as a liquidator in a CVL, but the investigation element of the directors conduct, and the affairs of the company leading up to the winding up order is predominately dealt with by the Official Receiver.

If you are issued with a statutory demand, then you have limited time to keep control of the business. If a winding up petition is issued, then it is still not too late for us to help you. You really must act immediately if you are faced with this possibility.

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Pathfinder Financial Services also trades as DebtManagementUK and is a company registered in England number 7039857, Data Protection Registration number Z2019459, Consumer Credit Licence number 0659592. Authorised and regulated by the Financial Conduct Authority. All telephone calls are recorded and monitored. When calling our “0845” from a BT landline, the call may be free depending upon which plan you are on. If you are calling from a mobile it is probably cheaper to dial our “0161” telephone number. On this website we also provide hints, tips and guidance including a link to free services provided by the Money Advice Service. You will find a wealth of useful information on this site

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