What is a Partnership Voluntary Arrangement and how
can it help you?
A PVA is a procedure whereby a partnership can continue to trade even though it is insolvent – in other words, the partnership cannot meet its ongoing liabilities from the cashflow that is being generated from the business.
A PVA is to be used (rather than a Partnership winding up procedure) if the partnership has already, or is likely to return to profitability in the near future and the debts can be paid off over an extended period of time. The PVA is a tailored plan to repay to creditors', usually over a 3 year period, what the partnership can afford to pay – typically, this is between 25 to 60 percent of the total debt.
A PVA is a legal, binding agreement between the partners and the partnership creditors'.
A PVA works in a similar way to a Company Voluntary Arrangement (CVA).
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