Company in liquidation or administration: what it means and what to do

What does "company in liquidation" mean?

It means a liquidator, usually a licensed insolvency practitioner or the Official Receiver, has been appointed to wind the company up: stop its business, sell its assets, pay creditors as far as the money goes, and then close it. Once the liquidator's final account is registered at Companies House, the company is dissolved 3 months later (GOV.UK, Liquidation and insolvency).

Key facts:

• Liquidation ends the company. There is no rescue; the business may be sold, but the company itself will be dissolved.
• Administration aims to save something. The administrator's first objective is rescuing the company as a going concern (Insolvency Act 1986, Schedule B1, para 3).
• Creditors are frozen in both. In administration, no legal process can be started or continued against the company without the administrator's consent or the court's permission (Schedule B1, para 43). After a winding-up order, unsecured creditors cannot take action without the court's consent (GOV.UK).
• Not every liquidation is insolvent. A members' voluntary liquidation closes a solvent company, and the register shows the same "Liquidation" status.
• On 1 October 2026 the Companies House register file listed 108,330 companies in Liquidation and 3,709 In Administration (UK Company Data).

Administration vs liquidation at a glance

The short difference: administration is a rescue procedure that may end in liquidation; liquidation is the end of the road.

The three types of liquidation

All three show as "Liquidation" on the register, so you need the insolvency details on the company's Companies House page to know which one you are dealing with.

Creditors' voluntary liquidation (CVL)

A CVL is chosen by the company when it cannot pay its debts. The shareholders pass a special resolution to wind up voluntarily (Insolvency Act 1986, s.84), and creditors are involved in the appointment of the liquidator. It is the most common route for an owner-managed company that has run out of money. A company in administration can also move into a CVL (form AM22 at Companies House).

Compulsory liquidation

Compulsory liquidation is ordered by the court, usually on a petition from a creditor. A creditor owed more than £750 who serves a statutory demand that goes unpaid for 3 weeks can treat the company as unable to pay its debts (Insolvency Act 1986, s.123), which supports a winding-up petition. On the winding-up order, the Official Receiver becomes liquidator unless the court orders otherwise (GOV.UK). Petitions and orders are published in The Gazette.

Members' voluntary liquidation (MVL)

An MVL closes a solvent company. The directors must make a statutory declaration that the company will be able to pay its debts in full within 12 months from the start of the winding-up (GOV.UK). Creditors are expected to be paid in full; what is left goes to the shareholders. MVLs are common for retiring owners and for tidying up unused group companies.

What the other statuses mean

Companies House uses a few more insolvency statuses. Together, statuses other than Active, Active - Proposal to Strike off, Liquidation and In Administration covered about 3,600 companies on 1 October 2026, so you will see them rarely.

• In Administration. An administrator has been appointed under Schedule B1. Within 8 weeks the administrator must send proposals to Companies House, creditors and members, setting out how the purpose of the administration will be achieved (GOV.UK).
• Voluntary Arrangement. A company voluntary arrangement (CVA) is in place: creditors have agreed a deal to be paid all or part of their debts over time while the company keeps trading, supervised by an insolvency practitioner.
• Receivership. A secured lender has appointed a receiver over some or all of the company's assets. Administrative receivership is now rare for charges created after 15 September 2003; receivers over specific property, such as buildings, are more common.

Each of these is explained, with the exact labels used in the register file, in our company status glossary entry.

How to read the insolvency on Companies House

The status line tells you the stage; the filing history and the insolvency tab tell you the detail. On the company's page on "Find and update company information":

1. Status. Liquidation, In Administration, Voluntary Arrangement or a receivership label.
2. Insolvency tab. The type of case, key dates and the names and addresses of the insolvency practitioners appointed.
3. Filing history. Appointment notices (for example form 600 for a voluntary liquidator, AM forms in administration), the administrator's proposals, progress reports and, at the end, the final account.
4. The Gazette. Search the company name or number for winding-up petitions, appointments of liquidators and administrators, and notices to creditors to prove debts.

A winding-up petition can appear in The Gazette while the company still shows as Active, because the status only changes when an order is made or a liquidator appointed. Check The Gazette for any customer you are worried about.

What a creditor or customer should do

If a company that owes you money enters liquidation or administration, contact the insolvency practitioner, submit a claim, and stop any court action you had planned. A practical sequence:

1. Find the office-holder. Names and addresses are on the Companies House insolvency tab and in the Gazette notice.
2. Submit a proof of debt. The liquidator or administrator should write to known creditors with a proof of debt form. A proof states your name and address, how and when the debt arose, and the documents that support it (GOV.UK). If you have not been contacted, contact them; in a compulsory liquidation, contact the Official Receiver.
3. Keep your evidence ready. Invoices, statements, contracts, delivery notes and any judgment.
4. Do not start or continue legal action without consent: the administration moratorium and the bar after a winding-up order both apply.
5. Watch for a dividend notice. Before paying a dividend, the office-holder contacts creditors; if you have not proved by then, you may lose your share (GOV.UK). For debts under £1,000, the office-holder can decide not to ask for a formal proof but still pay you.
6. Expect little for unsecured debts. Money goes first to the costs of the insolvency, then to preferential creditors such as employees for certain wages, then to floating charge holders, and only then to unsecured creditors and finally shareholders (GOV.UK).

If you are a customer rather than a creditor, for example you paid a deposit or rely on the company to supply goods, contact the administrator or liquidator about whether the contract will continue. In administration the business often keeps trading while a buyer is found.

If the company is dissolved before you claim, see what to do when a dissolved company owes you money.

What our data shows

Liquidation is far more common on the register than administration. Of 5,704,712 companies in the register file on 1 October 2026, 108,330 were in Liquidation (1.9%) and 3,709 In Administration (0.07%). About 2% of live companies were in an insolvency status of some kind.

The share varies by industry. In our register analysis, companies in an insolvency status made up:

Source: UK Company Data, Companies House register snapshot of 1 October 2026; dissolved companies are not in the register file, so finished liquidations are not counted. Because MVLs share the same status, part of the Liquidation count is solvent closures.

Warning signs before the status changes

The status changes only after an appointment is made, so by then it is late for a creditor. Earlier signals on the public record:

• Accounts filed late or overdue: on 1 October 2026, 1.8% of active companies were past their accounts due date (overdue accounts study).
• Negative net assets that grow worse from one year to the next.
• New charges to lenders shortly before payment problems.
• A winding-up petition in The Gazette.
• Directors whose earlier companies ended in liquidation; see Companies House red flags.

To see a company's status, overdue flags and multi-year balance sheet trend in one place, search it on our accounts page.

General information, not legal advice.

Sources

1. Liquidation and insolvency, GOV.UK, accessed 21 October 2026.
2. Liquidate your limited company, GOV.UK, accessed 21 October 2026.
3. Put your company into administration, GOV.UK, accessed 21 October 2026.
4. Claim money back from a bankrupt person or company in compulsory liquidation: guidance for creditors, GOV.UK, accessed 21 October 2026.
5. What to do when an insolvent company or bankrupt person owes you money, GOV.UK, accessed 21 October 2026.
6. Insolvency Act 1986, Schedule B1 (administration), paragraphs 2, 3, 43 and 76, legislation.gov.uk, accessed 21 October 2026.
7. Insolvency Act 1986, section 84: circumstances in which company may be wound up voluntarily, legislation.gov.uk, accessed 21 October 2026.
8. Insolvency Act 1986, section 123: definition of inability to pay debts, legislation.gov.uk, accessed 21 October 2026.

FAQ

What does it mean when a company is in liquidation?

It means a liquidator has been appointed to close the company: stop the business, sell the assets, pay creditors in the legal order and then have the company dissolved. Liquidation can be compulsory (ordered by the court), a creditors' voluntary liquidation for an insolvent company, or a members' voluntary liquidation for a solvent one. All three show the same "Liquidation" status on Companies House.

What is the difference between administration and liquidation?

Administration is a rescue procedure: an administrator tries to save the company or sell its business for a better result than a winding-up, while a moratorium stops creditors taking legal action. It ends automatically after a year unless extended. Liquidation closes the company for good. Many administrations end in a sale of the business followed by liquidation or dissolution of the company.

Can a company in liquidation still trade?

Usually not. In a voluntary liquidation the company must stop carrying on business except so far as needed for its beneficial winding up (Insolvency Act 1986, s.87), so any trading is short and serves the sale of assets. A company in administration, by contrast, often keeps trading while the administrator looks for a buyer. If you deal with such a company, contact the office-holder named on the Companies House insolvency tab.

How do I claim money from a company in liquidation or administration?

Find the liquidator or administrator on the Companies House insolvency tab or in The Gazette and submit a proof of debt with your invoices and other evidence. In a compulsory liquidation, contact the Official Receiver if you have not been contacted. Prove before a dividend is declared, or you may miss out. Do not start court action without consent.

Does liquidation always mean the company was insolvent?

No. A members' voluntary liquidation is used to close a solvent company, with directors declaring that debts will be paid in full within 12 months. It shows the same Liquidation status as an insolvent case. Check the insolvency details on Companies House to see whether the case is a members' voluntary, creditors' voluntary or compulsory liquidation.

Sources: Companies House register and accounts data (Open Government Licence v3.0), legislation.gov.uk and GOV.UK guidance where linked. This page is general information, not legal, tax or credit advice. Spotted an error? Email info@globalmindsetmarketing.co.uk.