Purnells

	Two types of CVA
	what are the two types? why two types? who can apply for a new type of CVA? are their different rules? when would an old type CVA be used? when would a new type of CVA be used?
	Old type CVA - No Moratorium the limbo period nominees duties disclosure issues directors duties the proposal impact of proposal on various parties
	New type CVA - With Moratorium enormous power enormous responsibility disclosure issues impact of proposal nominees duties creditors meeting voting rights supervisors duties a typical proposal costs concluding the CVA banks and debenture holders landlords petitioning creditors preferential creditors unsecured creditors
	Table of differences table to show the differences between the two types of CVA?
	Administration Order v CVA when would administration be sought rather than take up a new type CVA?
	Case Studies case study 1 case study 2 case study 3

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The answer is "a small company".

A "small" company is defined by section 247(3) of the Companies Act 1985 as one which satifies two or more of the following requirements. The revised threshold from 30th January 2004 are:

Turnover - not more than £5.6 million
Balance sheet total - not more than £2.8 million
Number of employee's - not more than 50

This begs the question "why cant larger companies have a CVA with a moratorium period?" The answer is that larger companies can achieve the same objective by applying for an "Administration Order".

Administration orders are dealt with at a different part of this website. There is more formality and cost attached to an administration and that is why the administration process may be more suitable for the larger company.

Conclusions:

If you are a director of a "small" company you could apply for either:

An old type CVA
or a new type CVA
or an administration order

If you are a director of a larger company you could apply for either:

An old type CVA
or an administration order

Professional advice is available to indicate what is the best option for your company - it all depends on your individual company circumstances. Purnells offer free meetings to explore the alternatives open to you and your company.