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Retention of title explained, what you cannot buy from a liquidation
One of the easiest ways to come unstuck buying from an insolvency is to pay for stock that was never the company's to sell. Retention of title is the reason, and it is simple once you understand it.
Last updated 2026-09-17.
When you buy stock from a company in liquidation, you naturally assume the company owns everything in its warehouse. It may not. A large amount of stock in any business is supplied on credit, and many suppliers protect themselves with a clause that keeps ownership of the goods until they are paid. If the company fails before paying, those goods still belong to the supplier, not to the company, and not to whoever buys the company's stock. That clause is retention of title, and it decides what is actually on offer.
What retention of title means
Retention of title, sometimes called a Romalpa clause, is a term in a supplier's conditions of sale that says ownership of the goods stays with the supplier until the buyer has paid for them in full. It is completely normal and sits quietly in the background of everyday trade. It only matters when a buyer becomes insolvent still owing for the goods. At that point the supplier can assert its claim and ask for the unpaid goods back, ahead of the general creditors, because in law those goods were never the failed company's property.
Why it matters to a buyer
Imagine a wholesaler goes into liquidation with a warehouse full of goods, and you agree to buy the lot. If a chunk of that stock was supplied under retention of title and is still unpaid, the suppliers can claim it, and you cannot safely buy it, because the office holder cannot pass you ownership of something the company did not own. Pay for it without checking and you risk losing the goods, the money, or both. This is why retention of title is the first thing to ask about on any stock purchase.
How to protect yourself
The protection is simple: ask. Before you agree to buy any stock, ask the appointed office holder directly which goods are subject to retention of title claims, and get the answer in writing. A liquidator or administrator has to work through these claims as part of the job, so they will know the position or be establishing it. Buy only the stock the office holder can confirm is clear, and treat anything uncertain as off the table until it is resolved. For the wider process, see our guides on buying stock from a company in liquidation and what happens to a company's assets in liquidation.
Know who to ask
Open a company on Insolvency Tracker to find the appointed office holder to approach, alongside the assets it is likely to hold.
Common questions
What is retention of title?
A clause in a supplier's terms that keeps ownership of goods with the supplier until the buyer has paid for them. If the buyer becomes insolvent before paying, the supplier can claim the goods back rather than lose them to the insolvency.
Can you buy stock subject to retention of title?
Not safely. If a valid claim covers the goods, they are not the company's to sell, so the office holder cannot pass good title to you. Always ask what stock is subject to a claim before you buy.
How do I check?
Ask the appointed office holder directly which stock is subject to retention of title claims, and get the answer in writing before you agree a purchase.
Company information, not advice. Retention of title can be complex in a specific case, so take professional advice before relying on this.