What is the difference between administration and a CVA?

Administration and Company Voluntary Arrangements (CVAs) are both designed to help struggling companies, but they work differently. Administration involves appointing an administrator who takes control of the company, imposes a moratorium, and explores rescue, sale, or liquidation options. Directors lose control, but the company gains immediate protection from creditors. A CVA, by contrast, is a negotiated repayment plan between the company and its unsecured creditors, supervised by an insolvency practitioner, but directors retain control of day-to-day management. Administration is often used when urgent protection is needed or when asset sales are likely, while a CVA is best for companies that are fundamentally viable but need breathing space to repay debts. Sometimes, the two procedures work together: a company may enter administration initially and then move into a CVA once creditor support is secured. The choice depends on the company’s financial position, creditor cooperation, and long-term viability.