What does a company voluntary arrangement aim to achieve?

A company voluntary arrangement (CVA) is specifically designed to enable a company that is struggling financially to reach an agreement with its creditors regarding the repayment of its debts. The CVA sets out a structured repayment plan that is agreed upon by the company and its creditors, which typically involves settling some portion of the outstanding debts over a set period.

This arrangement is particularly beneficial because it allows the company to continue trading while managing its debts, avoiding the more severe consequences of insolvency, such as liquidation or bankruptcy. The involvement of the court in sanctioning the CVA provides a level of legal protection and assurance to both the company and its creditors, as it ensures that the agreed-upon terms are enforceable.

The other options, while relevant to aspects of financial management or corporate strategy, do not accurately capture the essence of a company voluntary arrangement. A court order to avoid bankruptcy refers to broader legal processes, embedding fair treatment of customers pertains to customer service and regulatory standards, and reviewing company capital relates to financial health but not specifically to the framework of a CVA. The focus of a CVA is primarily on establishing a consensual repayment plan and facilitating debt restructuring under legal oversight.