Dealing with corporate insolvency for some can be a confusing, difficult and emotional time.

Here at 123 Insolvency we like to make things clear for you. We have prepared a collection of business and corporate insolvency vocabulary that we think may be useful to you.

Please note these are general interpretations to assist your reading on this website and if you have any questions please contact us and we can provide you with a free initial consultation.

If you have a specific question about your business, please contact one of our insolvency professionals.

Bond

The insurance cover the licensed Insolvency Practitioner is required to take out for protection of the company’s assets for creditors.

Creditor

Any individual or Limited/Plc or business to whom the company owes money to.

Creditors Meeting

A meeting called for creditors’ to confirm or appoint a liquidator of choice.

Creditors Voluntary Liquidation (CVL)

Creditors Voluntary Liquidation (CVL) is a process used where the shareholders and directors have decided a company is insolvent and can no longer continue to trade. The directors consult with a licensed insolvency practitioner to start the process.

Debtor

A debtor is any customer that owes money to your company.

Dividend

Is a payment to creditors’ or shareholders, by an insolvency practitioner.  A distribution is from the monies that the insolvency practitioner has realised on behalf of the liquidated company.

Fixed Charge

A fixed charge is security given by a company to a creditor who has lent the company some money which is secured on specific assets, for example a building.  Typically a bank will be given this security by a company.

IP

Insolvency Practitioner

Insolvency Practitioner

A person licensed by recognised professional body to act in accordance with the insolvency law, to deal with formal insolvency procedures.

Liquidation

Is a process which involves the winding up a company, the disposal of assets, agreeing of creditors’ claims, investigation of directors and distributing of dividends to the company creditors.

Liquidator

Liquidator Is an Insolvency practitioner who is the appointed office holder in any type of liquidation.

Petition

Is a court procedure used by a creditor to commence formal winding up of a company.

 Preference

A transaction carried out by the directors of the company which intentionally favours one creditor over another.

Proof of Debt Form

A form for creditors’ or individuals to complete and then to be submitted to the Insolvency Practitioner with appropriate paperwork to substantiate their claim.   Jon Why is insolvency practitioner in bold on this one?

Proxy Form

A form which when completed provides a creditor with a vote at the creditors meeting.

Secured Creditor

Is a creditor who holds security over all or part of the company’s assets.

Statement of Affairs

Is a document which outlines the company’s assets and liabilities and we will present to creditors’ at the creditors’ meeting.

Unsecured Creditor

Is any creditor of the company that does not hold any form of security.