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Is a Solicitor Required for a Business Voluntary Arrangement?

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Often a Company Voluntary Arrangement is referred to as a Business Voluntary Arrangement but there really isn't any difference other than the terminology. However, there is some misunderstanding as to what a voluntary arrangement is and who has the authority to oversee one. Unless there are complex legal issues at hand, a voluntary arrangement is handled out of court by a licensed Insolvency Practitioner.

There may be times when a business Voluntary Arrangement solicitor is required, depending on the complexity of debts and assets. If the company is insolvent and the state of financial affairs is quite involved, then a business Voluntary Liquidation solicitor would perhaps be better suited than an Insolvency Practitioner. This is generally true when some assets involve holdings in other countries.

A business Voluntary Liquidation lawyer can draw up legal documents, provide representation in a court of law and may also work hand in hand with an Insolvency practitioner when realising assets for distribution to creditors. If there are any disputes that are taken to court, the solicitor is the best representation in these circumstances. Should a voluntary arrangement be agreed upon, a business voluntary arrangement lawyer most likely wouldn't be necessary unless one party or the other defaults on the agreement.

In effect, a voluntary agreement usually doesn't see the inside of a courtroom unless the agreement isn't adhered to by either party. Most of the time an Insolvency Practitioner will handle voluntary arrangements unless the complexity of the arrangement warrants otherwise. One such instance would be if there would be a dispute among creditors that 75% of the value of creditors was not officially met in the vote. This might be resolved in a court if the creditors can't come to a mutual agreement, but most often, a solicitor is not necessary.

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