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It differs from an Income Payments Agreement (IPA), in that the latter is an agreement is made between the Bankrupt and the Official Receiver or the Trustee in Bankruptcy.
[See ‘Trustee in Bankruptcy’, ‘Official Receiver’, ‘Bankruptcy’, ‘Bankruptcy Order’, ‘IPO’ and ‘Income Payments Order’.]
Incorporation is the process by which a new or existing business registers as a limited company.
A company is a legal entity with a separate identity from those who own (shareholders/members) or run it (directors). A ‘veil’ is drawn between the company (which is now a legal entity in its own right, and can enter contracts, own property and contract in its own name).
As soon as it is incorporated a ‘Certificate of Incorporation’ is issued, which is effectively the company’s ‘birth certificate’.
[See ‘Shareholder’, ‘Director’ and ‘Limited’.]
An Individual Voluntary Arrangement (IVA) is a formal and legally binding agreement between a debtor and her creditors, to pay back debts over a period of time (usually four or five years).
It is binding on all creditors, even those who did not vote in favour of it once a minimum majority of 75% of creditors, by value, (usually excluding the votes of ‘connected creditors’) have approved the Arrangement.
This is the main statutory alternative to a Bankruptcy. An IVA has the legal effect of freezing action from existing creditors, allowing a breathing space to pay off debts over the period of time stated in the Arrangement.
This is achieved via an agreed plan known as the ‘proposal’ which is presented to an Insolvency Professional known as a ‘Nominee’, but in reality this person will be heavily involved in drafting the proposal, having experience of what creditors will
