A proposal is made by the directors to the creditors and shareholders providing a full disclosure of all the company's assets and liabilities together with a proposition for enhancing the return to creditors. The proposal compares to that which creditors could expect to receive under other insolvency procedures, and usually involves delayed or reduced payments of debts, capital restructuring or an orderly disposal of assets.

Despite being a formal procedure under the Insolvency Act 1986, it is possible to build in as much flexibility in dealing with the company's assets and liabilities as is acceptable to creditors. A Company Voluntary Agreement usually allows the continued involvement of the company's directors in its own affairs, subject to review by a Supervisor who has to be a licensed Insolvency Practitioner.