A–C
Administration — a formal procedure placing a company under a licensed insolvency practitioner with a statutory moratorium against creditor action.
Bona vacantia — assets remaining in a dissolved company, which pass to the Crown.
Bounce Back Loan — government-guaranteed lending of £2,000–£50,000 introduced in 2020, capped at 25% of turnover, with no personal guarantee permitted.
CCJ — County Court Judgment; a court order confirming a debt is owed, publicly registered for six years.
Compulsory liquidation — winding up ordered by the court on a creditor’s petition.
Consideration — what is paid for the shares.
CRAR — Commercial Rent Arrears Recovery; a landlord’s right to take control of goods for unpaid principal rent without a court order.
Creditor duty — the duty to have regard to creditors’ interests when a company is insolvent or bordering on insolvency, confirmed in BTI v Sequana [2022] UKSC 25.
CVA — Company Voluntary Arrangement; a binding agreement to pay creditors part of what is owed over time, requiring 75% approval by value.
CVL — Creditors’ Voluntary Liquidation; the directors’ route to winding up an insolvent company.
D–I
Debenture — the document creating a lender’s security over company assets, registered at Companies House.
Determination — HMRC’s own estimate of corporation tax where no return has been filed. Stands until displaced by an actual return.
Director’s loan account — the record of money moving between a director and the company outside salary and dividends. An overdrawn balance is an asset of the company.
Disqualification — a court order or undertaking barring a person from acting as a director, for between two and fifteen years.
Dissolution — removal of a company from the register. No longer a bar to investigation of its directors.
Fixed charge — security over a specific asset.
Floating charge — security over a changing class of assets, crystallising on default; ranks behind preferential creditors.
Forfeiture — a landlord ending a lease and retaking possession.
Fraudulent trading — carrying on business with intent to defraud creditors. Section 213 Insolvency Act 1986; section 993 Companies Act 2006 for the criminal offence.
Heads of terms — the written summary of a proposed transaction, generally not binding as to the deal itself.
Insolvency practitioner — a person authorised under section 390 Insolvency Act 1986 to take insolvency appointments. Acting without authorisation is a criminal offence.
M–Z
Misfeasance — breach of duty or misapplication of company property; section 212 Insolvency Act 1986.
Moratorium — a statutory bar on creditor action.
MVL — Members’ Voluntary Liquidation; the solvent closure route, requiring a sworn declaration of solvency.
Official Receiver — a civil servant who acts as liquidator or trustee, typically on compulsory liquidation.
Personal guarantee — a contract under which an individual promises to meet a company’s debt. Survives liquidation, dissolution and any sale of the company.
Pre-pack — a sale of business and assets negotiated before an administrator is appointed and completed immediately afterwards.
Preference — a transaction putting a creditor in a better position than they would be in the insolvency; reversible under section 239.
Preferential creditor — a creditor paid ahead of floating charge holders and unsecured creditors. Includes HMRC for VAT, PAYE, employee NIC and CIS since December 2020.
Prohibited name — the name of a liquidated company, restricted from reuse for five years under section 216 Insolvency Act 1986.
Retention of title — a supply term under which the supplier keeps ownership of goods until paid.
Section 127 — the provision making dispositions of company property void after a winding-up petition is presented, if an order is made.
Section 455 charge — corporation tax charge on a loan to a participator outstanding more than nine months after the period end. Refundable on repayment.
Statutory demand — a formal written demand for an undisputed debt, giving 21 days before a petition may follow.
Time to Pay — an arrangement to pay HMRC arrears by instalments.
Transaction at undervalue — a disposal for significantly less than its worth; reversible for two years under section 238.
Winding-up petition — a creditor’s application to the court to have a company compulsorily wound up.
Wrongful trading — continuing to trade past the point insolvent liquidation was unavoidable; section 214.