Glossary of terms
Administration Order
An order placing a company, that is, or is likely to become insolvent, under the control of an administrator following an application to the Court or by an out of Court route on the filing of the necessary papers, by the company, its directors or certain creditors. The purpose of the order is to protect the company assets from creditors to allow a reorganisation of the business or the most beneficial realisation of assets.
Administrative Receiver
A person appointed by a qualifying floating charge (pre 15 September 2003), secured over a company's assets to collect in the assets of the company to repay the debenture holder.
Administrator
A person appointed to deal with the affairs of a company following the making of an Administration order.
Assets
Anything that belongs to a business that can be realised to pay a debt.
Authorised Insolvency Practitioner
A person authorised by a Recognised Professional Body (or the Department for Business, Enterprise & Regulatory Reform) to act as trustee, nominee, supervisor, liquidator, administrative receiver or administrator.
Bankrupt
An individual against whom a bankruptcy order has been made.
Bankruptcy Order
A court order making an individual bankrupt.
Bankruptcy Petition
Request made, (by a creditor, or by the individual) to the court, to make a Bankruptcy order.
Company Voluntary Arrangement (CVA)
A plan of re-organising the debts of a company that is put to its creditors and shareholders.
Compulsory Liquidation
The placing of a company into liquidation as a result of an application to the court.
Creditor
Someone to whom a company or an individual owes money.
Creditors' Committee
Formed to represent all creditors in supervising the activities of an administrator or liquidator.
Creditors' Voluntary Liquidation
An insolvent company that is placed into liquidation by resolution of its members.
Dividend
A sum distributed equally to creditors in insolvency cases.
Floating Charge
Security granted to a creditor over general assets of a company that may change in time during the normal course of business (e.g. stock).
Individual Voluntary Arrangement (IVA)
Procedure by an individual where an arrangement is reached with creditors to deal with their liabilities. The procedure requires court approval and is under the control of a Supervisor.
Insolvent
Either the inability to pay debts as they fall due or having liabilities greater than assets.
Liquidation
A process where the assets of the company are realised, liabilities are agreed and any funds available are distributed in full or in part payment of creditors claims.
Liquidator
A person appointed to deal with the assets and liabilities of the company's liquidation.
Preference
The preferring of a creditor over another, putting that creditor in a better position on liquidation than they would have been.
Realising Assets
Selling a business's assets to raise funds.
Security
A charge or mortgage over assets of a business.
Supervisor
A person appointed to deal with the conduct of a CVA or IVA.
Unsecured Creditor
A creditor who does not hold security.
Wrongful trading
Continuing to trade when a company is insolvent in the knowledge
(actual or what a Court considers you ought to have known)
that insolvent liquidation could not be avoided.
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