Company formation Registration - HOME

General information
Corporate voluntary arrangements (CVA) including CVA moratoria
In administration and administration orders - Cases beginning on or after 15 September 2003: In administration
Voluntary liquidation
Compulsory liquidation
European cross-border insolvency proceedings
Frequently asked questions
Quality of documents
Further information

General information

1. What are insolvency proceedings?

These are formal measures taken to deal with company debt. There are many different types of company insolvency proceedings. All are covered in this publication.

Please note: the initiation or termination of insolvency procedures involving a European company (SE), or any decision to continue operating the SE, must be notified to Companies House on Form SE WU01. This is in addition to the other requirements mentioned in this guide. For more information about SEs, please see our guidance on, 'The European Company: Societas Europaea (SE)'.

2. Do insolvency proceedings apply to all types of companies?

The parts of this guidance covering compulsory winding-up and receivers (including administrative receivers) apply to registered and unregistered companies (including oversea companies).

The parts of this guidance covering voluntary winding-up and administration orders do not apply to unregistered companies, which cannot be wound up by these methods.

If the liquidation or receivership began before 29 December 1986, then the law in force at that time will continue to apply.

Remember: Not all companies in liquidation are insolvent.

3. Do all companies have to go through insolvency proceedings before being dissolved?

No. If the Registrar has reason to believe that a company is not carrying on business or is not in operation, its name may be struck off the register and dissolved without going through liquidation. A private company that is not trading may apply to the Registrar to be struck off the register. This procedure is not an alternative to formal insolvency proceedings.

More information about striking off and dissolution of a company is available in our guidance on 'Strike-off, Dissolution and Restoration'.

4. Can anyone supervise insolvency procedures?

All liquidators, administrative receivers, administrators and supervisors taking office on or after 29 December 1986 must be authorised insolvency practitioners.

Receiver managers, Law of Property Act (LPA) receivers and nominees appointed to manage a corporate voluntary arrangement moratorium do not have to be authorised.

Insolvency practitioners may be authorised by:

the Chartered Association of Certified Accountants;
the Insolvency Practitioners' Association;
the Institute of Chartered Accountants in England and Wales;
the Institute of Chartered Accountants in Ireland;
the Institute of Chartered Accountants of Scotland;
the Law Society;
the Law Society of Scotland; or
the Secretary of State for Business, Enterprise and Regulatory Reform.

5. What happens to the directors of an insolvent company?

The liquidator, administrative receiver or administrator has a duty to send the Secretary of State for Business, Innovation and Skills, a report on the conduct of all directors who were in office in the last 3 years of the company's trading. The Secretary of State has to decide whether it is in the public interest to seek a disqualification order against a director.

Examples of the most commonly reported conduct are:

continuing the company's trading when the company was insolvent;
failing to keep proper accounting records;
failing to prepare and file accounts or make returns to Companies House; and
failing to send in returns or pay to the Crown any tax that is due.