Liquidation, administration, receivership and CVA explained

Last updated 2026-09-03.

Insolvency is not one thing. A company can be in any of several formal processes, each with a different purpose and a different meaning for a buyer. Here is what each one is, in plain English, and what it tells you if you are looking at the assets.

Liquidation

Liquidation, also called winding up, is the process of closing a company down. A liquidator is appointed to sell the assets, pay the creditors in the legal order, and dissolve the company at the end. If you see a company in liquidation, its assets are being turned into cash and the business is being taken apart. There are three main types.

A creditors' voluntary liquidation, or CVL, is started by the company itself when it is insolvent, with the creditors involved in appointing the liquidator. It is by far the most common type of company insolvency in the UK. A compulsory liquidation is ordered by the court, usually after a creditor petitions to wind the company up. A members' voluntary liquidation, or MVL, is different: it is used to close a solvent company that can pay all its debts, often for tax or retirement reasons, so it is not a sign of failure at all.

Administration

Administration has a different first aim. An administrator is appointed to try to rescue the company or, if that is not possible, to get a better result for creditors than an immediate winding up would. A company in administration may still be trading, and there is a moratorium that protects it from creditor action while the administrator works out the best outcome. For a buyer this is significant, because a company in administration can often be bought as a going concern, meaning the trade, the name and the assets together, rather than just its broken up parts. Sometimes a sale is arranged before the appointment and completed immediately after, which is known as a pre pack.

Receivership

Receivership is where a secured lender appoints a receiver to recover what it is owed, using the assets it holds security over. The receiver acts for that lender rather than for creditors as a whole, and their focus is the charged assets. It is less common than it once was following changes to the law, but you will still see it. For a buyer it means the sale of the relevant assets is being driven by, and for, the secured lender.

Company voluntary arrangement

A company voluntary arrangement, or CVA, is a formal deal between a company and its creditors to pay off some or all of its debts over an agreed period. The company usually keeps trading throughout and is not being wound up, so a CVA is not a sale of assets. If you see a CVA, the business is trying to work its way through its debts rather than selling up, so there is generally nothing to buy.

What each means for a buyer, at a glance

In short: a company in liquidation is being wound up, so its assets are for sale piece by piece. A company in administration may still be trading and could be bought whole or in parts, and time is short. A company in receivership is having specific charged assets sold for a lender. A company in a CVA is trading on under a debt deal, so there is usually nothing on offer. And a members' voluntary liquidation is a solvent closure, not a distress case at all.

Reading it on the record

Every company's exact status and the type of any insolvency case are on its record. On Insolvency Tracker the company record shows the status and the dated register facts, and the asset assessment adds what the company is likely to own and who to approach. Our guide on what happens to a company's assets in liquidation goes deeper on the winding up process itself.

Common questions

Company information, not advice. This is a general explanation of the processes, not advice on any specific case.