Once it is established that a VPA is viable and is likely to be viewed positive by creditors, the partnership will designate an investigation period to prepare proposals and a list of assets and liabilities. This process will restructure the partnership if necessary and could include reducing overhead costs, layoffs, improving the efficiency of the business or other specific measures to promote long-term sustainability. The redundancy costs will be covered by the Redundant Fund, which will then file an application with the VPA. On the basis of this realistic assessment of the viability of the business, we would approve the plan that the partnership could present to creditors. This is called an offer to creditors or more formal than the proposals. In practice, the amount repaid should be less than 100% and perhaps even 25-40%. Countries that implement the VPA: six countries have concluded the VPA negotiations and are implementing their agreements with the EU: Cameroon, Central African Republic, Ghana, Liberia, Indonesia, Republic of Congo Although no country has yet begun licensing FLEGT, two countries – Ghana and Indonesia – are close to this goal.   At the creditors` meeting, at least 75% of voting creditors must vote in favour of the offer you made to the VPA to become a binding agreement between the company and its creditors. In practice, creditors are likely to approve as long as the report and offer to creditors are well thought out. Pending the agreement by the creditors, the liquidator is appointed as the candidate and after the meeting of creditors, called “supervision”. A VPA is a formal agreement between creditors and the partnership that allows a portion of the debt to be repaid over time. If partners believe in the fundamental viability of the business and are determined to fight for business to help with survival, then an APV can be a powerful tool or framework for corporate restructuring. Of course, the primary objective of all companies is to ensure profitability.
However, if your business is experiencing cash flow problems, there are many advantages for a business partnership over forced release. A physical meeting of the members of the company takes place immediately after the date and time of the creditors` decision-making process. Assuming that the proposals are approved by the required majority of creditors, members must decide whether or not they can approve the proposals and any changes that creditors may have proposed. The partnership proposals will be accepted if at least 50% of the members vote for the VPA. The partnership is generally under extreme pressure on cash flow and is unable to resolve the problem.