Is It Possible in the UK to Takeover a Limited Company that’s in Receivership or Liquidation?

When a limited company enters receivership, also known as administrative receivership, it is usually because it has serious cash flow problems and is insolvent. The same can be said for a company being liquidated. Both processes are for insolvent limited companies and must be handled in accordance with the Insolvency Act 1986.



However, the process and applicable rules for each are very different. It’s not possible to take over a limited company that has entered the liquidation process, but it is possible to take over a limited company in receivership.


The difference between liquidation and receivership


Before we look at the limited company takeover process, let’s clarify the difference between liquidation and receivership.

Liquidation is a process to realise the company’s assets to pay back creditors prior to the company being closed down.

Receivership is a process whereby a floating charge holder can seize assets to realise their value as payment, but not for any other creditors.


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Location: United Kingdom

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