When a company voluntary arrangement is implemented, the structure and management of the business normally stay the same. There is no legal obligation to change the officers of the company although it may be desirable to do so in order to introduce new ideas or ways of operating.

Current Directors continue to run the company
There is no obligation to change any of the directors of the company. The current directors remain in their posts and the board will remain intact unless any of the directors wish to resign their position.

Director’s conduct is not investigated

The result of a company voluntary arrangement is to leave the original business intact and continuing to trade without the burden of its legacy debt. Unlike pre-pack administration the business is not liquidated. As such, a liquidator is not involved and no investigation of the conduct of the directors is completed.

This means that there is little or no risk that directors will be accused of trading the business while insolvent (wrongful trading) which may otherwise result in them being struck off as directors.  

New management may be introduced

The company directors may wish to consider introducing new members of management or new board members as part of the company voluntary arrangement process. New people may introduce new ideas or methods which will serve to move the business forward and stop it from making the same mistakes as were made in the past.

The company directors are under no legal obligation to introduce changes to the board. However, it is possible that as a condition of accepting the CVA, the creditors may want to see an introduction of new management to ensure that their interest is protected.