Company Voluntary Arrangements (CVAs) - Law - CVA with a moratorium

Schedule A1 - Insolvency Act 1986 - Paragraph 16 - Company invoices, etc

 

 

 

It is common sense that if a Company has obtained the benefit of a moratorium (freeze on creditors enforcenent actions) for the period leading up to a Company Voluntary Arrangement (CVA) creditors meeting that the company should be transparent with people & organisations with which it deals in that period - by declaring the existence of the moratorium. Paragraph 16 of Schedule A1 to The Insolvency Act 1986 requires the company, for this period, to declare the existence of the CVA moratorium by making an appropriate record on,

 

- invoices

- orders

- letters

- websites

 

In this way the existence of the moratorium will come to the attention of parties, who may not be existing creditors, with whom the company wishes to contract on credit in the moratorium period.

 

The actual wording of Paragraph 16 of Schedule A1 to The Insolvency Act 1986 is reproduced below in bold.

 

 

16. (1 ) Every invoice, order for goods or services, business letter or order form (whether in hard copy, electronic or any other form) issued by or on behalf of the company, and all the company's websites, must also contain the nominee's name and a statement that the moratorium is in force for the company.

(2) If default is made in complying with sub-paragraph (1), the company and (subject to sub-paragraph (3)) any officer of the company is liable to a fine.

(3) An officer of the company is only liable under sub-paragraph (2) if, without reasonable excuse, he authorises or permits the default.

 

The recording of the existence of the CVA moratorium on these various categories of paper & electronic media ensures that a record is brought to the attention of future contracting parties of the present existence of a CVA moratorium.