Legal Definition Of Voluntary Agreement

Under a voluntary agreement under corporate law, directors are not personally liable for the company`s debts unless they have provided a personal guarantee. Even if a director has provided a guarantee, a CVA means that a director is only responsible if the company is unable to pay and continues to have a source of income. To place a company in a voluntary agreement (CVA) of a company, there is a specific process that must be followed to assess the profitability of the agreement and put in place this process of turnaround the business. An Individual Voluntary Agreement (IVA) is a formal and legally binding agreement between you and your creditors to repay your debts over a specified period of time. This means that it is approved by the court and your creditors must comply. In the CONTEXT of the EU, the term `voluntary agreement` generally refers to an agreement which is not the result of a political decision-making process exclusively within the framework of the official EU institutions (European Commission, Council of the European Union, European Parliament – i.e. the so-called Community method), but mainly the result of negotiations between organisations of legitimate social partners to reach such agreements through EU legislation. The main failure of a voluntary agreement is that they are not enshrined in EU law. Under UK insolvency law, an insolvent company can enter into a voluntary agreement (CVA). The CVA is a form of composition similar to the personal IVA (individual voluntary agreement) in which an insolvency procedure allows a company with debt problems or insolvent to enter into a voluntary agreement with its creditors on the repayment of all or part of its corporate debt over an agreed period. [Citation required] The application for a CVA may be submitted with the consent of all company executives, the company`s legal directors or the designated liquidator.

[1] European social dialogue is one of the most important examples of this new „alternative“ mode of governance; In its 2002 communication entitled „European Social Dialogue, a Force for Innovation and Change“ (COM (2002) 341 final, 26 June 2002), the Commission declares that social dialogue is „the key to better governance“ and calls for greater participation of social partners „on a voluntary basis“. The 2004 communication, entitled „Partnership for Change in an Enlarged Europe – Strengthening the Contribution of European Social Dialogue“ (COM (2004) 557 final, 12 August 2004), places particular emphasis on voluntary agreements (called „autonomous agreements“ in communication). Directors have a legal obligation to act properly and responsibly and to put the interests of their creditors first.