Glossary
UK insolvency terms explained
A plain English glossary of the words you meet around company insolvency, each explained in a sentence or two, with a link to the fuller guide where there is one. No jargon, no legalese.
Last updated 2026-09-17.
Insolvency
The state of being unable to pay debts as they fall due, or having liabilities greater than assets. Insolvency is the umbrella term for the formal processes below.
Liquidation
The process of winding a company up: selling its assets, paying creditors in the legal order, and dissolving the company at the end. See what in liquidation means and what happens to the assets.
Creditors voluntary liquidation, CVL
A liquidation started by an insolvent company itself, with its creditors involved in appointing the liquidator. The most common type of company insolvency in the UK.
Compulsory liquidation
A liquidation ordered by the court, usually after a creditor presents a winding up petition against the company.
Members voluntary liquidation, MVL
The liquidation of a solvent company that can pay all its debts, often used to close a company for tax or retirement reasons. Not a sign of failure.
Administration
A process aimed first at rescuing the company or its business, or getting a better result for creditors than immediate winding up. A company in administration may still be trading. See the processes compared.
Pre pack administration
An arrangement where the sale of the business is agreed before the administrator is appointed and completed immediately after, to preserve value. See what a pre pack is.
Receivership
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.
Company voluntary arrangement, CVA
A formal deal between a company and its creditors to pay off some or all of its debts over time. The company usually keeps trading, so it is not a sale of assets.
Office holder
The general term for the licensed insolvency practitioner appointed to a case: the liquidator, administrator or receiver. The office holder controls the company's assets and runs the sale. See how to contact the office holder.
Insolvency practitioner
A licensed professional authorised to act as an office holder in insolvency cases. Only an insolvency practitioner can be appointed as liquidator or administrator.
Liquidator
The office holder in a liquidation, responsible for gathering in and selling the company's assets and distributing the proceeds to creditors.
Administrator
The office holder in an administration, responsible for trying to rescue the company or its business, or otherwise getting the best result for creditors.
Charge
Security a company gives a lender over its assets, like a mortgage. A charge gives the lender a prior claim on the charged asset. See fixed and floating charges explained.
Fixed charge
Security over a specific, named asset, such as a property or a machine, which the company cannot sell freely while the charge stands.
Floating charge
Security over a changing pool of assets, such as stock, which the company can trade until the charge crystallises, usually on insolvency.
Debenture
The document that creates the security a lender holds over a company, typically containing both a fixed and a floating charge.
Secured creditor
A creditor that holds a charge over the company's assets and so ranks ahead of unsecured creditors for the value of that security.
Preferential creditor
A creditor given priority by law over ordinary unsecured creditors, such as certain employee claims and some tax.
Unsecured creditor
A creditor with no security over the company's assets, paid only after secured and preferential creditors, and often only in part.
Retention of title
A clause that keeps ownership of goods with the supplier until they are paid for. Goods under a valid claim are not the company's to sell. See retention of title explained.
Going concern
A business sold as a working operation, with its trade, name and assets together, rather than broken up into separate parts. See buying a business in administration.
Realisable value
What an asset would actually fetch if sold in an insolvency, usually far below its book value. See how to value assets in insolvency.
Recovery rate
The proportion of an asset's normal value it typically fetches in an insolvency sale. See recovery rates by asset type.
Winding up petition
An application to the court by a creditor to have a company compulsorily wound up. If granted, it leads to compulsory liquidation.
Dissolution
The final removal of a company from the register, after which it ceases to exist as a legal entity.
Put the terms to use
Browse the live list of UK companies in an insolvency process, or read the full guides for buyers.
Company information, not advice. These are plain English explanations, not legal definitions.