The short answer
A Company Voluntary Arrangement (CVA) is a binding deal with creditors to repay an agreed proportion of debt over time — usually while the directors keep running the business. Administration hands control to a licensed administrator and imposes a moratorium shielding the company from creditor action while it is rescued, restructured or sold. A CVA keeps directors in charge; administration replaces them with an officer of the court.
Both a CVA and administration are rescue procedures for a company that is struggling but potentially viable. The difference is about control and protection. A CVA lets directors stay at the wheel and trade their way out under a repayment plan; administration puts a professional in charge behind a legal shield. This guide compares them so you can see which suits the situation.
CVA vs administration at a glance
- CVA Binding repayment deal with creditors
- Administration Moratorium & administrator control
- Who runs the company CVA: directors · Admin: administrator
- Approval CVA: 75% of creditors by value
- Protection Admin gives a moratorium; CVA does not by default
- Best fit Viable company, cash-generative future
How a CVA works
A CVA is a formal, legally binding agreement between a company and its creditors, proposed with the help of a licensed insolvency practitioner (the nominee, who becomes supervisor). Creditors vote on the proposal; if 75% by value of those voting approve it, it binds all unsecured creditors, including those who voted against. The company then makes agreed contributions — usually monthly from trading profits — over a set term, and the directors remain in day-to-day control.
How administration works
Administration places the company under a licensed administrator, who takes over management and works towards a statutory objective — rescue as a going concern, a better result for creditors than liquidation, or realising assets for secured and preferential creditors. Crucially, it brings a moratorium: most creditor enforcement is frozen while the administrator acts.
Side-by-side comparison
| Feature | CVA | Administration |
|---|---|---|
| Who controls the company | Directors stay in charge | Administrator takes control |
| Creditor protection | No automatic moratorium | Moratorium freezes most action |
| How it is approved | 75% of creditors by value | Court or qualifying-charge holder route |
| Typical aim | Repay a proportion over time, keep trading | Rescue, restructure or sell the business |
| Binds dissenting creditors | Yes, unsecured creditors | Via the administration outcome |
| Public profile | Lower — trading continues | Higher — formal court procedure |
When to choose which
- Choose a CVA where the business is fundamentally sound, generates cash, and directors can deliver a realistic repayment plan without needing protection from imminent enforcement.
- Choose administration where the company needs an immediate moratorium, a restructuring of contracts, or a fast going-concern sale that directors cannot achieve alone.
- The two can combine — an administration is sometimes used to deliver a CVA or a sale.
Where these sit among the options
Both are rescue routes, sitting between trading on and liquidation. For the full map of options including winding down, see administration vs liquidation and liquidation vs administration vs CVA. Each requires a licensed insolvency practitioner.
Could a CVA save your business — or do you need a moratorium?
A licensed insolvency practitioner can model both routes against your cash flow. A short, confidential call shows which is realistic.
Frequently asked questions
Do directors stay in control in a CVA?
Yes — in a CVA the directors continue to run the company day to day, under the supervision of the insolvency practitioner who oversees the arrangement.
What approval does a CVA need?
At least 75% of creditors by value (of those voting) must approve the proposal. Once approved, it binds all unsecured creditors.
Does a CVA give protection from creditors?
Not automatically. Administration provides a moratorium; a standalone CVA does not by default, though a separate moratorium can sometimes be used alongside it.
Can administration be used to deliver a CVA?
Yes — an administrator can implement a restructuring or sale, and a CVA may be put to creditors as part of, or following, an administration.
Sources & further reading
- GOV.UK — Company voluntary arrangements
- Insolvency Act 1986 — Part I (CVAs) and Schedule B1 (administration)
- The Insolvency Service — guidance for company directors
- GOV.UK — Options for a company in financial difficulty
This guide is general information, not formal insolvency advice. Your situation must be assessed by a licensed insolvency practitioner before you act.