Partnership Voluntary Arrangements (PVA)

If you’re struggling with business debt, then a Partnership Voluntary Arrangement may be a viable option to save your company from insolvency. Similar to a Company Voluntary Arrangement, they enable creditors to be paid back over an agreed time period. This allows partners in a business to be provided with breathing space to pay off their debts, all while continuing to run a profitable business. For this reason, it is one of the most effective and efficient ways to release a debt burden.

For tailored support applying for a PVA and expert business debt help, contact one of our expert Insolvency Practitioners today.

What is a Partnership Voluntary Arrangement?

A Partnership Voluntary Arrangement is a legal agreement between business partners and their creditors to pay off all outstanding debts within an agreed time period. Typically, this is between three and five years. By doing so, a business is granted the time and space to pay off their outstanding debts without any pressure, all while continuing to operate a business that has underlying potential.

In that time, the partners also have the opportunity to restructure and rescue their business. This could involve new processes being introduced, a new management style or other tactics to provide the most effective big or small business debt help.

How do PVA’s work?

When a partnership is insolvent but has an underlying profitable business, it may be appropriate for the partners to seek the agreement of creditors for a Partnership Voluntary Arrangement. A PVA works similar to a CVA. The main difference between the two is that a PVA is formed by business partners, whereas a CVA can be implemented by the company directors.

Design a payment plan

Here, a binding legal document guided by an Insolvency Practitioner is created that provides a payment plan and a business strategy to pay off outstanding debts, all while ensuring that the company is able to make a profit by continuing to operate. The Proposal for a PVA can take any form, it is usually by way of contributions from future profits but can include a sale of assets, third party funds or any combination.

Agree to the terms of the PVA

Creditors consider the Proposal for a Partnership Voluntary Arrangement at a decision procedure. In order for it to be approved, 75% of voting creditors need to approve it. If the majority is reached, those voting against it would be bound by the terms of the Proposal.

As long as the Partnership adheres to the terms of the Proposal, the Partnership Voluntary Arrangement will be concluded successfully, and the remaining debts will be written off. At all times, the day to day running of the Partnership remains with the partners.

Complete the payment plan

It is then the responsibility of your chosen Insolvency Practitioner to ensure that all payments are made on time, and that the Partners stick to the agreed plan. Once your PVA has been agreed by your creditors, the business will then be protected against liquidation, so long as the plan is adhered to.

What are the main benefits of a PVA?

Alongside the ability to save your business, a PVA also offers companies:

A lower repayment by writing off a percentage of the debt.
A frozen interest rate on outstanding debts.
One single scheduled payment per month.
A timeline for business recovery.
The ability to run a profitable business.

Unfortunately, there is no one-size-fits all solution. Each company is different, meaning that the terms of contract and benefits will vary depending on your unique scenario. For more information, talk to one of our experts for confidential business debt advice.

How Restart BTi can help

Don’t struggle with your business debts. The sooner you seek professional business debt help, the more we can do to save your business from insolvency. If you believe that a PVA is the right solution for your business, simply fill out the form below, and one of our experts will be happy to help.

Partnership Voluntary Arrangements FAQs

How long does a PVA last?

When your Partnership Voluntary Arrangement is complete, the business can begin to operate as normal without the monthly scheduled payments to pay off existing debts. To ensure that your business runs smoothly, it’s advised that you speak to one of our experts to avoid further financial problems.

What happens once a PVA is finished?

To get a Partnership Voluntary Arrangement, you will need a licensed Insolvency Practitioner to plan, organise and complete your application.

How do I set up a PVA?

No matter what the size of your business is, we are available to discuss the problem and design a solution that is tailored to meet your specific scenario. Simply contact our team to arrange a call back, during which you will be provided with expert business debt advice, while maintaining your confidentiality.

enquiries@restartbti.co.uk

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Gareth Graham Self is authorised to act as an insolvency practitioner in the UK by The Insolvency Practitioners Association under office holder number 9706.
Restart BTi is the trading name of Restart Business Turnaround Insolvency Limited, a limited company registered in England and Wales no: 11517419
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