Glossary

Tricky words explained

Administration orders

An Administration order allows companies time to save or salvage part of a business. They typically last for three months and are granted by the county court to those who are less than £5,000 in debt owed to more than one creditor, and who have at least one high court or county court judgement (CCJ) against them.

Assets

Valuable possessions belonging to a person or company e.g. property, vehicles, stocks, shares, savings etc.

Bankruptcy

A company is bankrupt if it cannot pay back money owed to creditors. Bankruptcy is a legal process which will write off all of the company's debts.

Bankruptcy restriction order

A bankruptcy restriction order is imposed upon a bankrupt who has been found guilty of dishonest or culpable conduct. The order imposes restrictions upon the bankrupt for a set period of between two and fifteen years.

Commercial finance

Commercial finance is funding that is used to support your business or business venture. It is a loan that is usually calculated depending on the assets of a business.

Company voluntary arrangement (CVA)

A company voluntary arrangement is a debt solution for companies facing financial difficulty. It is a legally binding agreement between a company and its creditors to compromise on debts owed.

County Court Judgement (CCJ)

A CCJ is an order handed out by the county court when an individual or company has failed to repay debts owed to creditors.

Creditors

Creditors are the people or businesses that have leant your company money, which needs to be repaid.

Creditors Voluntary Liquidation (CVL)

Creditors voluntary liquidation is when an insolvent company is voluntarily brought to an end and all assets are turned into money which can be distributed among creditors.

Crown Debts

A dedicated financial solutions company offering effective debt solutions to companies experiencing financial difficulties, or those in need of liquidation help.

Directors

The directors of a company are the people in charge of running the business.

Health check

A facility available on the Crown Debts website to help determine the current state of your business.

Insolvency

You are insolvent if you are unable to pay debts when they fall due and have no means to pay off all debts owed.

Insolvency act 1986

The Insolvency Act 1986 details legal legislation relating to insolvency matters throughout the UK.

Insolvency practitioner (IP)

An insolvency practitioner is someone who specialises in insolvency and must hold a legal license in order to put a company into liquidation.

Members voluntary liquidation (MVL)

Members voluntary liquidation is a form of insolvency and occurs when the shareholders of a company decide to voluntarily wind up company.

Petition

This is a formal application which is submitted to court.

Phoenix company

A phoenix company is a business vessel that emerges from the collapse of another company through insolvency. The assets are moved from the insolvent Limited company to the phoenix company.

Predecessor

In this instance, predecessor refers to the failed company prior to the phoenix company being set up.

Pre-pack insolvency

Pre pack insolvency refers to the sale of a company's assets before a company officially enters the insolvency process.

Shareholders

Shareholders are individuals or companies that legally own a part of a company or business.

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