UK company insolvency explained: liquidation, administration and receivership
"Insolvency" covers several different legal procedures, and the one a company enters says a lot about what happens next. Here is what each type means, how common it is, and how to track it from the official record.
- Insolvency is not one event but a family of formal procedures, each with its own rules and its own entry in the public record.
- Creditors' voluntary liquidation is by far the most common route, accounting for around four in five company insolvencies.
- Administration is a rescue procedure and grabs the headlines, but it is far rarer than liquidation.
- A members' voluntary liquidation is the winding up of a solvent company and is not counted as an insolvency at all.
- Every figure is public: Companies House, The Gazette and the Insolvency Service.
When a UK company cannot pay its debts as they fall due, it becomes insolvent. But insolvency is not a single event. It is a family of formal procedures, each with its own rules, its own outcome for creditors, and its own entry in the public record. A licensed insolvency practitioner usually takes charge, and the appointment is published in The Gazette and filed at Companies House.
Knowing the difference matters. A company in administration may keep trading and be rescued. A company in creditors' voluntary liquidation is being wound up and will cease to exist. Below are the procedures you will see most often, in plain English.
Creditors' voluntary liquidation (CVL)
A CVL is the most common insolvency procedure in the UK by a wide margin. The directors of an insolvent company, rather than a court, decide to wind it up. Shareholders pass a resolution to liquidate, a licensed insolvency practitioner is appointed as liquidator, the company stops trading, its assets are sold, and the proceeds are distributed to creditors in the statutory order. The company is then dissolved.
A CVL is voluntary in the sense that the directors initiate it, but it is firmly an insolvent procedure: it is used precisely because the company cannot continue.
Compulsory liquidation
Compulsory liquidation is a winding up ordered by the court, normally after a creditor who is owed money presents a winding-up petition. If the court is satisfied the company cannot pay, it makes a winding-up order. The effect is similar to a CVL (the company is wound up and its assets realised for creditors) but the route is adversarial and court-driven rather than director-led.
Administration
Administration is a rescue and protection procedure. A licensed insolvency practitioner, the administrator, takes control of the company and a statutory moratorium holds creditors off while options are explored. The aim, in order of priority, is to rescue the company as a going concern, achieve a better result for creditors than an immediate winding up, or realise assets to pay secured or preferential creditors. Many large, well-known business failures enter administration first, which is why the procedure attracts the most headlines even though it is far less frequent than liquidation.
Company voluntary arrangement (CVA)
A CVA is a legally binding deal between a company and its creditors to repay an agreed proportion of its debts over a fixed period, typically three to five years. Unlike a liquidation, the company keeps trading. CVAs are comparatively rare and are most associated with restructuring chains of leasehold premises, such as retailers and hospitality groups renegotiating rents.
A note on members' voluntary liquidation (MVL)
An MVL is a winding up of a solvent company. The directors swear a statutory declaration of solvency, confirming the company can pay its debts in full, usually to close down a company that has simply reached the end of its useful life in a tax-efficient way. An MVL is not an insolvency, so although it is a liquidation, it does not belong on a list of company failures and we do not treat it as one.
Receivership
Receivership is now uncommon. An administrative receiver is appointed by the holder of a qualifying floating charge to take control of the charged assets and recover what is owed to that secured lender. Reforms in the Enterprise Act 2002 largely replaced administrative receivership with administration, so today you will see only a handful of receivership appointments in a typical month.
How common is each type?
The Insolvency Service publishes monthly company insolvency statistics for England and Wales, and the shape is remarkably stable: creditors' voluntary liquidations dominate, compulsory liquidations and administrations follow, and CVAs and receiverships are a rounding error. Across 2024, of 23,872 company insolvencies, 18,840 were CVLs, 3,230 were compulsory liquidations, 1,597 were administrations, 202 were CVAs and just three were receivership appointments. In other words, around four in five insolvent UK companies are wound up through a CVL.1
Where the data comes from
Every figure above is built from public records. Companies House holds the filings for each company and publishes them under the Open Government Licence. The Gazette is the official public record where insolvency appointments and notices are advertised. The Insolvency Service compiles the national statistics. InsolvencyRadar brings these sources together so you can see each company insolvency the day it is recorded, filter the latest cases, and drill into a single company or a whole industry.
If you need to monitor insolvencies as they happen, for credit risk, supplier exposure, or business development, that is exactly what the InsolvencyRadar service is built for.
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Sources
Maximilian Kuch is an economist and digital entrepreneur. Across several insolvency-data projects he tracks corporate failures from the official record every day, in the UK and across Europe. His analyses combine the headline statistics with up-to-the-day data drawn straight from Companies House and The Gazette, surfacing trends often long before they reach the published figures.
Spot insolvencies before the statistics do
InsolvencyRadar records every UK company insolvency the day it is filed, sourced from Companies House and The Gazette, often weeks before the official statistics. Filterable by industry, region and procedure.