Choose a letter below to view the glossary keywords

Glossary of Credit Management Terms. Letter R

Receivership:
There are three types of receivership:

An administrative receiver who is appointed by a debenture holder under a fixed or floating charge debenture;

A law of property Act receiver who is appointed over property under The Law of Property Act 1925;

A Receiver appointed by the Court. (This is rarely used in practice).

The term ‘Official Receiver’ should not be confused with ‘administrative receiver’. The latter is appointed by debenture holders etc. The former is an employee of The Insolvency Service (an executive agency of the Department of Trade and Industry).

Red lining:
The practice of declining an applicant for credit wholly on the grounds that he/she lives at an address which is deemed to be unsatisfactory. This practice is outlawed by the Office of Fair Trade. (The name derives from the original practice of drawing a red line around an address on a map.)

Registered capital:
Is the amount of money that can be put into a Limited or Unlimited company in the form of shares. The term Nominal capital is also sometimes used. For Public companies this is known as Authorised capital.

Registered capital is divided into shares which can be of different classes and values. Different classes of shares may carry varied voting rights, divided rights etc.

Registered company:
A registered company is registered under the Companies Act, with the Registrar of Companies. A company may be registered either as limited private company, a public limited company or an unlimited company. See also, Private company.

Registered office:
The address of a company at which all documents must be served, in order for service to be effective. It is recorded at Companies House and can be found by referring to company headed paper or carrying out a company search.

Reserves:
The value of net assets over and above the issued capital.

Reservation of title clause:
Also known as a Romalpa clause or a Retention of title clause it is a clause reserving the seller’s title to the goods until those goods are fully paid for. It imposes a duty of care in respect of the goods on the buyer and purports to entitle the seller to recover the goods or trace the proceeds of sale. This is a complex area, and any company wishing to incorporate such a clause into its contracts/terms and conditions, should seek specialist legal advice.

Retained earnings:
Also known as the P& L account or revenue reserves, represents the accumulated net income, not paid out as dividends etc, from previous financial years, and not transferred to the other reserves, and carried forward to the balance sheet. Retained earnings form part of a company’s net worth.

Retained earnings at end:
The accumulated income, not paid out as dividends etc., carried forward to the current years’ balance sheet.

Retention of title clause:
Also known as a Romalpa clause or a Reservation of title clause it is a clause reserving the seller’s title to the goods until those goods are fully paid for. It imposes a duty of care in respect of the goods on the buyer and purports to entitle the seller to recover the goods or trace the proceeds of sale. This is a complex area, and any company wishing to incorporate such a clause into its contracts/terms and conditions, should seek specialist legal advice.

Return of allotments:
When a company commences operations it will not normally be in the position to file an annual return. Therefore if the persons forming the company want to take up and pay for shares, they make what is called a return of allotments, a simple form showing how many shares have been allotted and the names and addresses of the allottees. A company which increases its issued capital between filing annual returns, normally issues further shares by making such an allotment.

Revaluation reserve:
Amount arising from the appreciated value of property; the difference between the former book value of property on the balance sheet and the present (revalued) book value of the property.

Rights issue:
An issue by a company of new shares which are offered, usually at a price below current market value, to existing shareholders of the company, in proportion to their present holdings (usually done to raise additional capital).

Romalpa clause:
Also known as Retention of title clause or a Reservation of title clause it is a clause reserving the seller’s title to the goods until those goods are fully paid for. It imposes a duty of care in respect of the goods on the buyer and purports to entitle the seller to recover the goods or trace the proceeds of sale. Known as the Romalpa clause from the case Aluminium Industrie Vaasen BV v Romalpa Aluminium Ltd (1976). This is a complex area, and any company wishing to incorporate such a clause into its contracts/terms and conditions, should seek specialist legal advice.

Back to top