Terms related to credit management and D&B credit reports

A | B | C | D | E | F | H | I | J | L | M | N | P | R | S | T | V | W | Y

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A

Amalgamation: The merging of two or more corporations to form a new and separate business entity.

Antecedent information: Background/work history of key officers/principals within a company.

Articles of Incorporation: A legal document filed with the province and/or federal government that outlines the purpose of, and regulations for, a corporation.

Assignment in Bankruptcy: Voluntary assignment in bankruptcy is a legal process whereby an insolvent organization with debts assigns or transfers its assets to a licensed trustee who then oversees their sale and distribution to various classes of creditors with proven claims.

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B

Bill of Sale: A written contract for the sale of goods which transfers ownership of specific goods from the seller to the buyer for a stated price.

Branch: A secondary location of a business. It has no legal responsibility for the business' debts, even though bills may be paid from the branch location. It will have the same legal business name as its headquarters. A branch often operates under a different trade style. It may be located at the same address as the headquarters if it has a unique trade style and unique operations.

Business Interruption: Any events which cause the business to wholly or partially suspend its operations for a period of time and, therefore, cause the business to suffer losses. Examples would be strikes, burglary, evacuation made necessary by environmental disaster, etc.

Business Record: Featured in the Business Information Report, it indicates that the business, or its parent company, or a subsidiary has suffered financial embarrassment, or a principal of the company (parent or subsidiary) has been convicted.

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C

Case Info: This could highlight a change in employee information, line of business, trend or record of a company.

Chattel Mortgage: Business or personal property (other than real estate) such as equipment, automobile, etc. given as security for a loan obtained mainly to purchase pledged property.

Clear Record: No criticized business failures, convictions, either business or personal.

Commercial Credit Score: Predicts the likelihood that a company will pay its bills in a severely delinquent manner within the next 12 months based on the information in D&B’s files. This score is exclusively available from D&B.

Commercial Pledge: In the province of Quebec, business machinery and equipment are given as security for loans in this pledge.

Control Change: A change of 50.1% or more in the ownership of a business.

Control Year: The year a business started operations, or came under present management control.

Corporate Search: Within the province of Ontario, all corporations, partnerships, proprietorships, non-profit organizations and limited partnerships are required by law to be registered with the province, and are subject to the rules of the Ministry of Consumer and Commercial Relations. Some municipal regulations may also apply.

Corporation: A contract between the federal and provincial government and the individuals composing the corporation, permitting the operation of a legitimate business. It is an artificial entity, existing only in law, and as a legal personality is capable of acting in many respects as an individual. The fundamental characteristics of corporate organizations are the transferability of ownership, continuous succession and limited liability.

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D

D&B Rating: Indicator of creditworthiness. Divided into two parts: the financial strength code and the risk indicator, which reflects the risk associated with the business. This rating is exclusively available from D&B.

Date Reported: This is the month and year a payment experience is reported by a vendor.

Debenture: A fixed-interest security issued by a corporation in return for a long-term loan that is redeemable within ten to forty years.

Deed of Trust and Mortgage: Issued by a corporation to bondholders, these certificates for long-term loans tender the land and buildings of the corporation as security for loans.

Disaster: An occurrence of a fire or some other such disaster at a place of business.

Discharge: An instrument which terminates a contract; also a release or cancellation of an obligation.

Dissolution: The orderly winding up of a solvent company.

D-U-N-S® Number (Data Universal Numbering System): A unique 9-digit identification number assigned by D&B to each business in the D&B database. 20-000-0018 is an example of a D-U-N-S® Number. Since each unit or location of a business in D&B's file has its own unique D-U-N-S® Number, a large organization may have many different D-U-N-S® Numbers within its corporate “family”. D&B links the D-U-N-S® Numbers of parents, subsidiaries, headquarters and branches and is accepted worldwide. Identifies cross-selling opportunities within the same corporate “family”.

DUNSRight™: DUNSRight is the D&B data quality process that ensures that you get the most accurate and complete information available on a company.

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E

Employees Here: The number of employees for a single location of a multi location business.

Employees Total: Total number of employees for all locations of the business.

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F

Financial Embarrassment: This could include: Bankruptcy, Receivership, filing under the Companies Creditors Arrangement Act, Receiving Order or Proposal to creditors.

Financial Stress Score: Predicts the likelihood of a firm ceasing business over the next 12 months without paying all creditors in full, or reorganizing or obtaining relief from creditors under provincial/federal law. This score is exclusively available from D&B.

Financing: If present, it is either secured - all or part of the business’ assets are pledged to another business, usually a financial institution, or to a person (or persons) as security for borrowings; or unsecured - assets are not pledged as security for borrowings.

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H

Headquarters: A headquarters is a business location that has branches or divisions reporting to it, and is legally responsible for those branches or divisions. If the headquarters is more than 50 percent owned by another corporation, it will also be a subsidiary. If it owns more than 50 percent of another corporation, then it is also a parent.

High Credit: Largest dollar amount sold, on a one-time basis, in the past 12 months, by a vendor to the business.

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I

Incomplete Record: Information is not available, or has been declined.

Informal Proposal to Creditors: Proposal made by a debtor to its creditors outside the Bankruptcy Code.

Intangibles: Included as intangible assets are such items as Capital Stock Subscriptions, Copyrights, Goodwill, Mailing Lists, Patents, Research Expenses, Tax Loss Carry Forward, Trademarks, etc.

Interim Receiver: Prior to the date set for hearing a Petition, the Court may appoint an Interim Receiver to protect the assets of the debtor, and to control the receipts and disbursements associated with the business, but not interfere with the carrying on of the business itself.

Involuntary Petition in Bankruptcy (US): Bankruptcy proceedings which are initiated by up to three creditors against a debtor who has failed to make payments on debts of not less than $1,000.

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J

Judgment: The decision of a judge which finally resolves an action in court.

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L

Last Sale: The number of months, from the “Date Reported”, which have passed since a Vendor last sold to a business.

Legal Filings: Any open (ongoing) or closed public filings including bankruptcy, judgments, suits or liens.

Letters Patent Annulled: Cancellation of a corporate charter.

Lien: The right of a creditor to retain a property from its owner pending payment of a debt or performance of some agreed upon obligation.

Limited Partnership: A legal partnership where some owners are allowed to assume responsibilities only up to the amount invested.

Liquidation: The orderly winding up of a solvent company according to applicable provincial and/or federal statutes.

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M

Management: (D&B Terminology) A change in the officers and/or directors of a company.

Management Record: Indicates that a principal of the business, or a related business, has suffered financial embarrassment, or has been convicted.

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N

NAICS (North American Industry Classification System): SIC Codes (Standard Industrial Classification Codes) are a numbering convention to identify an industry or service a business provides. NAICS codes were created to increase service orientation and recognize new and emerging industries and are more process-focused descriptions of what a business does.

Name Change (also known as Articles of Amendment): By filing Articles of Amendment, a corporation may change its registered name or make other changes within its corporate structure.

Notice of Crystallization: In the Maritime Provinces, this 60-day notice is given by a creditor advising the debtor that rights under the terms of a security agreement in default will be crystallized or exercised.

Notice of Dation En Paiement: This 60-day notice, given by the creditor to a debtor who has failed to make payments on a mortgage contract, allows the mortgage creditor to file a suit in Quebec Superior Court asking that the creditor be named owner of the property covered by the mortgage.

Now Owing: Total dollar amount owing to a Vendor by the business at the date reported.

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P

Parent: A parent is a corporation that owns more than 50 percent of another corporation. The parent company may also be a subsidiary of another corporation. If the parent has branches/divisions, then it is also a headquarters. Parents can have both direct and indirect subsidiaries; indirect subsidiaries have another company between themselves and the parent.

Partnership: A legal entity of two or more people or businesses who share responsibilities, resources, profits and liabilities.

Past Due: Total dollar amount owing that is past the due date under the terms of sale extended by a Vendor.

Paydex® Score: This is a simple numeric score, exclusive to D&B, which provides an instant overview of how a firm has historically paid its bills and helps you to accelerate your credit decision process. Paydex Scores are updated daily, so payment changes are quickly identified. (See Payment Details Section below for further information.)

Payment Details Section: Found in the Business Information and Comprehensive Reports, the Payment Details Section displays a listing of recent payments reported to D&B. Each line (up to 80) provides the most recent information secured through company trade tapes and other D&B data collection methods. It's important to note that an unusually large number of transactions during a single month or time period may indicate a seasonal purchasing pattern. The following types of payment appear most frequently in this section:

Payment Record: A payment as reported to D&B by a Vendor.

Primary SIC: Represents a company's activity with the largest percentage of sales revenue. See SIC Code.

Proprietorship: A legal entity subject to exclusive ownership. A “proprietor” is one who owns a business entirely and is 100% personally responsible for its debt.

Public Record or Public Filings: Information on suits, liens, judgments, and other such legal activity. Filings throughout all provinces are monitored on a daily basis.

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R

Rating Change: The assignment, removal, raising or lowering of the D&B rating.

Receivership: An enterprise whose operations have been put in the hands of a receiver, usually a major creditor, because it is unable to meet its financial obligations.

Reclassified Items: Sometimes certain assets and liabilities may be reclassified from being a current item to non-current item, and vice versa for credit reporting purposes. Examples: Shareholders' Loans, Investments, Deferred Charges, Trust Funds and Inter-company Loans.

Record: Indicates the history of the business and its management. It may be one of the following:

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S

Sales: Annual sales or revenues generated by the business. There may be a code “F” - the figure is taken from a financial statement, or “P” - the figure is a projected figure, or “E” - the figure is estimated.

Satisfaction of Judgment: A written acknowledgment filed with the court by the claimant certifying that the demands and claims in a judgment have been satisfied by the defendant.

Selling Terms: Terms of sale extended by the selling Vendor.

SIC Code (Standard Industrial Classification Code): Numeric standardized numbering system that classifies business establishments according to the industries they belong to. It is particularly helpful when you’re looking to segment markets, analyze customer relationships, and conduct general business research.

SICs divide all major economic activity into ten major divisions. Businesses are then further classified within each division. The first two digits in the code represent a company’s major industry affiliation and its subdivision. The remaining digits break down the line of business to a level of greater detail and specification.

Special Events: Alerts you to major changes within the company such as ownership, acquisitions, fires, bankruptcies – all of which could affect your business decisions about a company.

Subsidiary: A subsidiary is a corporation that is more than 50 percent owned by another corporation and will have a different legal business name from its parent company. A subsidiary must be a single location, a headquarters, or a parent. A subsidiary may have branches and/or subsidiaries of its own.

Suit/Statement of Claim: A legal procedure under which a plaintiff or claimant tries to recover damages from a defendant. Proceedings begin with a statement of claim.

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T

Trade Name or Trade Style: A trade name/style is the name under which a business is operated. It could also be the legal name, or there may be a separate legal name in addition to a trade name.

Trademark: A word, symbol or design, or a combination of these, used to distinguish the goods or services of a person, organization or corporation in the marketplace from those of others.

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V

Voluntary Petition in Arrangement/Reorganization (US): Chapter 11 of the US Bankruptcy Code allows a debtor to reorganize or restructure his business activities by offering creditors a plan to settle, satisfy or extend the payment time for unsecured debts.

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W

Worth: The amount shown here is the net tangible worth or equity of the business. There may be a code “F” in front of it which means it is taken directly from a financial statement.

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Y

Year started: This indicates the year the company started operations.

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