| Type of Insolvency Regime |
Company Voluntary Arrangement |
Creditors’ Voluntary Liquidation |
Administration |
| Do you have to be insolvent? |
Yes |
Yes |
Yes |
| Who starts the process? |
Directors |
Directors / Shareholders |
Directors and/or Floating Charge holder / Creditors |
| What is the timeframe to implement? |
3 weeks (minimum) |
8 days (minimum) |
Hours to several weeks |
| When and is the company protected? |
When approved it will bind all pre-CVA creditors |
N/A |
Moratorium freezes all creditor actions, starts when notice is filed at court |
| What is the purpose? |
Usually the survival of the Company and turnaround |
To wind-up a company |
Various objectives |
| What happens to Employees? |
Typically remain employed, but some may be made redundant pre-CVA to return the company to profitability |
Typically made redundant, however can transfer to the purchaser if there is a going concern sale |
Some may be made redundant to enable the company to trade within its means, but if a purchaser buys the business as a going concern, all remaining employees will be transferred. Otherwise, all will be made redundant |
| What is the Insolvency Practitioner’s Main Role? |
To supervise the arrangement |
To dispose assets and wind down the affairs |
To manage the company’s business and affairs and to achieve a purpose of the Administration |
| What are the Insolvency Practitioners' powers? |
Limited to terms of arrangement |
Various: realise assets / disclaim onerous property / bring and defend legal actions / distribute funds to creditors |
Various: realise assets / bring and defend legal actions / trade / distribute funds to preferential and secured creditors / distribute the prescribed part to unsecured creditors |
| Does the Insolvency Practitioner report on the directors’ conduct? |
No |
Yes |
Yes |
| Can the Directors purchase the Company’s business and assets? |
N/A |
Yes |
Yes |
| What happens to funds realised by the Insolvency Practitioners? |
Applied in accordance with the terms of the arrangement |
Applied according to a statutory order of priorities |
Applied according to a statutory order of priorities |