Comparison of Business Debt Solutions

This table compares the key factors of the various options available for businesses in severe financial difficulty in an easy to use format.

More details about each option can be found from the page
(Note that if you are not in a limited company, then you will need a Personal Debt Solution)

	CVA	Pre Pack or Phoenixing	Administration	Liquidation
				Voluntary		Compulsory
				MVL	CVL
Cost of solution	Fees taken out of regular monthly payments made by the company.	Lump sum required to buy assets of old business depending on its value.	Administrators fees taken from company funds or sale of company assets	Minimum liquidator's fees £4700 normally paid by the company	Minimum liquidator's fees £4700 normally paid by the directors	No charge to the company or directors
Debt collection activities and payment to creditors	Stops once CVA is in place. Court action and winding up procedures stopped	Collection activities stop as new company can not be pursued for outstanding debt	Any pending winding-up petitions will be dismissed or suspended	Continue as normal until company is closed	Continue as normal until company is closed	Continue as normal until company is closed
Debt repayment (Including HMRC)	Normal creditor payments stop. Creditors are paid a percentage of what they are owed	Creditor payments stop. Old company is liquidated and debts are then paid proportionally as much as possible after liquidator's fee	Some creditors may be paid. The administrator acts in the best interest of the company creditors	Any outstanding creditors will be fully paid from the assets of the company	Creditors will be paid from the assets of the company if money is available. Part payment or non payment normal	Creditors will be paid from the assets of the company if money is available. Part payment or non payment normal
Duration	Usually 5 years	n/a	Maximum 12 months, exceptionally extended to 15 months	Up to 12 months from the start of the winding-up	n/a	n/a
Confidentiality	Private agreement. Not announced publicly	Administration and liquidation of old business advertised in the London Gazette	Announced publicly in the London Gazette. Company must also advertise that it is in administration on all correspondence	The special resolution for voluntary winding-up of the company must be published in the Gazette		Unless the court directs other arrangements, the petition must be advertised in the Gazette
Effect on the Company	Company continues to trade normally	A new company is formed which buys the assets of the old. The new company continues to trade. The old business is normally liquidated	Company continues to trade under the management of the administrator. A CVA may then be implemented or the company liquidated	Company is closed	Company is closed	Company is closed
Effect on Directors	Directors remain unaffected	Directors take up roles in new company. A directors report is issued by the liquidator of the old business	The administrator takes over control of the company. The directors can not act without the authority of the administrator	Directors are not affected and resign voluntarily at the end of liquidation	Directors resign. If accused of wrongful trading, they may be disqualified and liable for certain debts	Directors resign. If accused of wrongful trading, they may be disqualified and liable for certain debts
Control of the company	The existing directors continue to control the company	The new company is controlled by its new directors. The old company is controlled by the liquidator	The company is managed and controlled by the administrator	The existing directors and managers control the company	Controlled by the liquidator	Controlled by the liquidator
Effect on employees	Employees remain unaffected	Employees working for the old company must be transferred to the new business under TUPE law	Employees may be retained or made redundant by the administrator.	Employees are made redundant	Employees are made redundant	Employees are made redundant
Effect on Shareholders	Status of shareholders is not affected	Old business is normally liquidated and shares become worthless	Status of shareholders is not affected	Receive remaining assets of the business after all creditors are paid	Old business is normally liquidated and shares become worthless	Old business is normally liquidated and shares become worthless
What happens to company assets?	Not affected	Sold to new company at a market price	May remain with the company or be sold depending on the decisions made by the administrator	Once creditors are paid, outstanding assets or cash is given to the shareholders"	Sold and/or transferred in favour of creditors.	Sold and/or transferred in favour of creditors.