Company insolvency explained
Insolvency is when a company can no longer pay its debts as they fall due, or its liabilities exceed its assets. The main UK processes are liquidation (winding the company up and selling its assets), administration (a rescue process led by an administrator), receivership (a secured creditor recovering what it is owed), and a Company Voluntary Arrangement or CVA (a deal to repay creditors over time). Each appears as a status and as filings on the public register.
The main processes
Liquidation ends a company: a liquidator sells its assets, pays creditors in legal order, and the company is dissolved. It can be compulsory (court-ordered) or voluntary (creditors’ or members’). Administration aims to rescue the company as a going concern, or get a better result for creditors than immediate liquidation, with a moratorium that pauses legal action while the administrator works.
A CVA lets a viable but struggling company agree a repayment plan with creditors and keep trading. Receivership is where a creditor holding security (a charge) appoints a receiver to recover the debt from specific assets.
Spotting it early
Insolvency rarely happens without warning signs on the register: overdue accounts, charges being registered, a “Gazette” notice, or a change to an insolvency status. Company Shark’s Trading Signals flag these so you can act — whether you are a supplier protecting yourself or a buyer spotting opportunity.
Frequently asked
What is the difference between liquidation and administration?
Liquidation winds the company up permanently; administration is a rescue or asset-protection process that may save the business, sell it, or lead to liquidation.
What is a CVA?
A Company Voluntary Arrangement is a legally-binding agreement to repay creditors part or all of what they are owed over time, letting a viable company keep trading.
Can I still trade with a company in administration?
Sometimes — a company in administration may keep operating under the administrator. Check the specifics and consider the risk before extending credit.
Where do insolvency events show up?
On the company’s status and filing history at Companies House, and in the official Gazette. Company Shark surfaces these as Trading Signals.
Related guides
- Company status explained (Active, Dissolved & more)
- How to check if a company is still trading
- How to find a company’s accounts
Put this into practice
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