Partnership Voluntary Arrangement

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Partnership Voluntary Arrangement

Thinking of a Partnership Voluntary Arrangement? What Are The Options?

 

A partnership voluntary arrangement or PVA is similar to a Company Voluntary Arrangement (or CVA), except that it has been drafted especially for partnerships rather than limited companies.

A new culture of looking at insolvency was envisaged by the U.K. government in the 1980s and 1990s which found that it was best to save businesses if at all possible rather than let businesses wither away. So the partnership voluntary arrangement and similar instruments were born.

A partnership voluntary arrangement, put simply, allows the partners to keep control of the partnership while entering into an agreement to pay the creditors of the business under the terms of the PVA, which details how the liabilities and debts of the partnership will be dealt with under the various provisions available in law.

A partnership voluntary arrangement will allow the business, which may have known cashflow issues over a period of years, to repay its liabilities either fully or partially over a term of years. The payments are restructured, any money thus generated (for example, from book debts) may be then used as a source of working capital. Crown debts such as monies owed to VAT and HMRC may also be paid off gradually in this way, so that the cashflow of the partnership can be liberated and the debts not permitted to squeeze the business.

There are several other ways a business may be helped, aside from a partnership voluntary arrangement, or even in addition to a PVA. Other advanced options include the pre-pack, which would separate the bad parts of the business from the good parts, sell them off and restart as a new ‘phoenix’ company which is free from the burden of the old debt.

Also, looked at it more detail, there is nothing to stop the individual partners looking into the possibilities of IVAs for themselves as individuals, especially if they have invested personal assets into the business.

If you would like to talk about a partnership voluntary arrangement to a specialist with 17 years corporate insolvency experience then enter your details into the web form below for a no-obligation chat.

However, if you need help with personal debt (rather than business related debt) go to our free debt management plan application form.

 

 

 

 

We specialise in the following:

business debt factoring
invoice discounting

business bankruptcy
business finance

company bankruptcy
voluntary arrangement

pre pack administration

voluntary liquidation
business liquidation
wrongful trading
business insolvency
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business turnaround

pre pack liquidation

 

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