# Liquidation and administration in the UK: what happens

> What happens when a UK company goes into liquidation or administration: CVL, compulsory liquidation, pre-packs, CVAs, directors' duties, staff and records.

Canonical: https://origindatapartners.com/guides/liquidation-administration-company-data-uk
By: Origin Data Partners
Status: Published
Published: 2026-11-05
Updated: 2026-11-05
Sources checked: 2026-11-05

## Quick answer

When a UK company goes into liquidation or administration, a licensed insolvency practitioner takes control of the company and everything it owns, and the directors can no longer act for it. In administration the administrator runs the business while creditors are held off, and has 8 weeks to set out proposals: rescue the company through a company voluntary arrangement (CVA), sell the business as a going concern, sometimes in a pre-pack agreed before the appointment, or sell the assets and close it. In liquidation the liquidator sells the assets, pays creditors and has the company removed from the register. Directors start a creditors' voluntary liquidation when 75% of shareholders by value vote for it; a creditor owed £750 or more can petition the court for a compulsory liquidation; a CVA lets the company keep trading if 75% of voting creditors by debt value agree. Once the company is insolvent, creditors' interests come first, and a director who carries on when there is no reasonable prospect of avoiding insolvent liquidation can be ordered to contribute to its assets. Company records, computer records included, are assets the office-holder can sell for creditors, subject to UK GDPR.

## Key points

- The route depends on whether the business can be saved: a CVA or administration can rescue it, while a creditors' voluntary or compulsory liquidation closes the company.
- Once the company is insolvent, creditors come first. Trading on with no reasonable prospect of avoiding insolvent liquidation can make a director personally liable.
- Records are company property. Keep them intact, hand them to the insolvency practitioner and check what they are worth before the appointment.

## Company going into liquidation or administration: the checklist

Before the liquidator or administrator is appointed, check what the company's records are worth. AI developers now pay for the operational records of closing and insolvent companies, such as tickets, work orders, email and chat archives and code ([public deals](https://origindatapartners.com/guides/ai-data-licensing-deals)). Once an insolvency practitioner takes office, those records are company assets they can sell for creditors; knowing their value first means they are counted rather than deleted. A [free valuation](https://origindatapartners.com/check-fit) takes six questions about the business and no files.

The steps below are for directors of a company that cannot pay its debts. The insolvency practitioner runs the formal process; what you do before and during the appointment affects how much creditors recover and how your own conduct is judged. Each rule is sourced in the sections below.

| Step | What to do | Rule or deadline |
| --- | --- | --- |
| 1. Take advice early | Speak to a licensed insolvency practitioner or a solicitor as soon as you think the company cannot pay its debts | Once the company is insolvent, creditors' interests legally come first |
| 2. Stop adding debt you cannot repay | Check every new order, loan and commitment against the cash position | Wrongful trading: a court can order a director to contribute to the company's assets |
| 3. Answer creditor demands in time | Pay, agree terms or start a formal process | Statutory demand: 21 days. Court judgment: 14 days |
| 4. Choose the route | With the insolvency practitioner: a moratorium, a CVA, administration or a creditors' voluntary liquidation | A moratorium gives 20 business days of protection; a CVA needs 75% of voting creditors by debt value |
| 5. Keep the records intact | Do not delete systems, accounts or archives; list where every record is held | The court can order anyone holding company records to hand them to the office-holder |
| 6. Check the records' value | See whether operational records could be licensed, before the appointment | Proceeds are company money and go to creditors |
| 7. Make the appointment | Administration: appoint an administrator. Liquidation: a 75% shareholder resolution and a liquidator | Creditors' voluntary liquidation: resolution to Companies House within 15 days and The Gazette within 14 days |
| 8. Hand over | Give the office-holder the assets, records and paperwork, and any information they ask for | A legal duty to co-operate, including interviews |
| 9. Look after staff | The office-holder tells employees how their jobs are affected and gives them a case reference number | Employees claim redundancy, wages and holiday pay within 6 months of dismissal |
| 10. Expect a conduct review | The liquidator reports on the directors' conduct | Unfit conduct: a ban of 2 to 15 years. Re-using the company name: a 5-year ban |

Source: [GOV.UK: Closing a limited company](https://www.gov.uk/closing-a-limited-company)

## Liquidation, administration or a CVA: the UK routes compared

There are three types of liquidation: a creditors' voluntary liquidation and a compulsory liquidation for a company that cannot pay its debts, and a members' voluntary liquidation for one that can ([GOV.UK](https://www.gov.uk/liquidate-your-company)). Administration and a company voluntary arrangement aim to save the company or its business first; [R3](https://www.r3.org.uk/administration/) describes administration as intended to support business rescue.

- Who can petition for a compulsory liquidation: the company, its directors, any creditor, contributories (which can include shareholders), the Secretary of State, or an administrative receiver, administrator or supervisor ([Insolvency Service](https://www.gov.uk/guidance/director-information-hub-compulsory-liquidation)).
- Solvent and simply closing? A members' voluntary liquidation or a strike off is covered in [how to close a limited company in the UK](https://origindatapartners.com/guides/close-a-limited-company-uk).
- Scotland and Northern Ireland have different processes for liquidating or winding up a company ([GOV.UK](https://www.gov.uk/liquidate-your-company)).
- To check whether a company is already in administration or liquidation, search the Companies House register: the free company details include insolvency information ([GOV.UK](https://www.gov.uk/get-information-about-a-company)). Administrators also publish a notice of their appointment in The Gazette ([GOV.UK](https://www.gov.uk/put-your-company-into-administration)).

|  | Who starts it | Can it pay its debts? | Who controls the company | Usual outcome |
| --- | --- | --- | --- | --- |
| Creditors' voluntary liquidation (CVL) | A director proposes it; 75% of shareholders by value of shares pass a winding-up resolution | No | A liquidator, an authorised insolvency practitioner acting in the creditors' interest | Assets sold, creditors paid, company removed from the register |
| Compulsory liquidation | A court petition by a creditor owed £750 or more, the company, its directors, shareholders or the Secretary of State, among others | No | The official receiver, once the court makes a winding-up order | Trading stops and the official receiver sells the assets |
| Members' voluntary liquidation (MVL) | The directors declare the company solvent; the shareholders resolve to wind it up | Yes, within 12 months | A liquidator | Debts paid; any money left goes to shareholders |
| Administration | The directors, or a creditor holding a floating charge | No | An administrator, who runs the business | A CVA, a sale of the business as a going concern, or a sale of the assets and closure |
| Pre-pack administration | The directors and the insolvency practitioner, with a sale negotiated before the appointment | No | The administrator, who completes the sale on or shortly after appointment | The business carries on under a new owner |
| Company voluntary arrangement (CVA) | The directors, through an insolvency practitioner | No | The company keeps trading; payments go through the insolvency practitioner | Creditors are paid over a fixed period |

Source: [GOV.UK: Liquidate your limited company](https://www.gov.uk/liquidate-your-company)

## What does an insolvency practitioner do, and what does it cost?

Most formal procedures are run by a licensed insolvency practitioner. An administrator must be one ([GOV.UK](https://www.gov.uk/put-your-company-into-administration)), a CVA can only be obtained through one ([GOV.UK](https://www.gov.uk/company-voluntary-arrangements)), a creditors' voluntary liquidation appoints one as liquidator ([GOV.UK](https://www.gov.uk/liquidate-your-company/creditors-voluntary-liquidation)) and a moratorium needs one as monitor ([Insolvency Service](https://www.gov.uk/guidance/director-information-hub-how-to-get-a-moratorium)). In a compulsory liquidation the court puts the official receiver in charge ([GOV.UK](https://www.gov.uk/wind-up-a-company-that-owes-you-money/the-court-hearing)).

To find one, search the Insolvency Service's register of licensed insolvency practitioners by name, town or county ([GOV.UK](https://www.gov.uk/find-an-insolvency-practitioner)).

- What a liquidator does: settles legal disputes and outstanding contracts, sells off the company's assets and uses the money to pay creditors, keeps creditors informed, interviews the directors and reports on what went wrong, and gets the company removed from the register ([GOV.UK](https://www.gov.uk/liquidate-your-company/what-the-liquidator-does)).
- Administration: the administrator's fees are paid by the company ([GOV.UK](https://www.gov.uk/put-your-company-into-administration)).
- CVA: the insolvency practitioner charges to apply for the CVA and to administer it ([GOV.UK](https://www.gov.uk/company-voluntary-arrangements)).
- Liquidation: the liquidator pays the liquidation costs and the final VAT bill ([GOV.UK](https://www.gov.uk/liquidate-your-company/what-the-liquidator-does)).
- Compulsory liquidation on a creditor's petition: £352 in court fees and a £2,600 petition deposit, which the creditor might get back if the company can afford to repay them ([GOV.UK](https://www.gov.uk/wind-up-a-company-that-owes-you-money)).

Source: [GOV.UK: Find an insolvency practitioner](https://www.gov.uk/find-an-insolvency-practitioner)

## What happens when a company goes into administration?

The company is protected from legal action by its creditors, and nobody can apply to wind it up while it is in administration. In return the directors hand over control of the company and everything it owns to the administrator, a professional insolvency practitioner whose fees the company pays ([GOV.UK](https://www.gov.uk/put-your-company-into-administration)). Administration can mean the company does not pay all its debts in full, but it can still be wound up.

The law gives the administrator three objectives, in order: rescue the company as a going concern; failing that, achieve a better result for creditors as a whole than an immediate winding up; and only if neither is practicable, realise property to pay one or more secured or preferential creditors ([Schedule B1, paragraph 3](https://www.legislation.gov.uk/ukpga/1986/45/schedule/B1/paragraph/3)).

- Who appoints: the directors, or a creditor that holds a floating charge over the company's assets ([Insolvency Service](https://www.gov.uk/guidance/director-information-hub-administration)).
- Notice: the administrator writes to creditors and Companies House and publishes the appointment in The Gazette ([GOV.UK](https://www.gov.uk/put-your-company-into-administration)).
- Proposals: within 8 weeks the administrator sets out what they plan to do and sends it to creditors, employees and Companies House, who are invited to approve or amend the plans ([GOV.UK](https://www.gov.uk/put-your-company-into-administration)). The 8-week deadline is in [Schedule B1, paragraph 49](https://www.legislation.gov.uk/ukpga/1986/45/schedule/B1/paragraph/49).
- Running the business: an administrator can trade the company for several weeks or months while looking for a buyer or restructuring it ([R3](https://www.r3.org.uk/administration/)), and can cancel or renegotiate contracts and make employees redundant ([GOV.UK](https://www.gov.uk/put-your-company-into-administration)).
- Outcomes: a CVA so the company keeps trading; a sale of the business as a going concern, keeping its clients, workforce or orders; a sale of the assets in a creditors' voluntary liquidation; or closure if there is nothing to sell ([GOV.UK](https://www.gov.uk/put-your-company-into-administration)).
- Payments: administrators can repay secured creditors, but cannot pay unsecured creditors except through the prescribed part; other payments to unsecured creditors come in a liquidation, a CVA or with the court's permission ([R3](https://www.r3.org.uk/administration/)).
- How long: the appointment ends automatically after one year. The court can extend it, and creditors can consent to an extension of up to one year ([Schedule B1, paragraph 76](https://www.legislation.gov.uk/ukpga/1986/45/schedule/B1/paragraph/76)). Once administration ends, the protection from creditors' legal action ends with it ([GOV.UK](https://www.gov.uk/put-your-company-into-administration)).

Source: [GOV.UK: Put your company into administration](https://www.gov.uk/put-your-company-into-administration)

## Pre-pack administration: how a pre-pack sale works

A pre-pack is a sale of all or part of a company's business or assets negotiated with a buyer before an administrator is appointed and completed by the administrator immediately on, or shortly after, appointment. Statement of Insolvency Practice 16 ([SIP 16](https://www.icaew.com/-/media/corporate/files/regulations/insolvency/sips/england/sip-16-e-and-w-prepackaged-sales-in-administrations-apr-2021.ashx)) says this makes transparency in all dealings of primary importance, and the law adds checks on sales to insiders:

- Marketing: marketing the business is an important element in getting the best available price for creditors as a whole, and the insolvency practitioner should advise that it follows the marketing essentials in SIP 16.
- Disclosure: the administrator explains the sale in a SIP 16 statement with the first notification to creditors and in any event within seven calendar days of the transaction. It covers the valuations obtained for the business or its underlying assets and any connection between the buyer and the directors, shareholders or secured creditors.
- Sales to connected people: in the first 8 weeks of administration an administrator must not make a substantial disposal to a connected person unless creditors approve it or a qualifying report has been obtained ([2021 Regulations, regulation 3](https://www.legislation.gov.uk/uksi/2021/427/regulation/3)). Connected people include directors, their spouses, children and siblings, and companies they control; the report comes from an evaluator on whether the deal is reasonable ([Insolvency Service](https://www.gov.uk/government/publications/requirements-for-independent-scrutiny-of-the-disposal-of-assets-in-administration-including-pre-pack-sales/requirements-for-independent-scrutiny-of-the-disposal-of-assets-in-administration-including-pre-pack-sales)).
- Records in a pre-pack: the records are company property, so they are part of what is sold. Ask that they are valued with the other assets, since the SIP 16 statement has to report the valuations.

Source: [ICAEW: SIP 16 (England and Wales), pre-packaged sales in administrations](https://www.icaew.com/-/media/corporate/files/regulations/insolvency/sips/england/sip-16-e-and-w-prepackaged-sales-in-administrations-apr-2021.ashx)

## Creditors' voluntary liquidation: the steps for directors

A director can propose that the company stops trading and is wound up if it cannot pay its debts and enough shareholders agree. At a shareholders' meeting, 75% by value of shares must vote for the winding-up resolution ([GOV.UK](https://www.gov.uk/liquidate-your-company/creditors-voluntary-liquidation)). Then:

- Appoint an authorised insolvency practitioner as liquidator.
- Send the resolution to Companies House within 15 days and advertise it in The Gazette within 14 days.
- Hand over control. Directors no longer control the company or anything it owns and cannot act for it. They must give the liquidator any information they ask for, hand over the company's assets, records and paperwork, and be interviewed if asked ([GOV.UK](https://www.gov.uk/liquidate-your-company/what-happens-to-directors)).
- The liquidator secures and realises the company's assets, including unpaid invoices for work completed, works out why the company became insolvent and sends a conduct report on the directors to the Insolvency Service ([Insolvency Service](https://www.gov.uk/guidance/director-information-hub-creditors-voluntary-liquidation-cvl)).
- In a creditors' voluntary liquidation the liquidator acts in the interest of the creditors, not the directors ([GOV.UK](https://www.gov.uk/liquidate-your-company/what-the-liquidator-does)).

Source: [GOV.UK: Arrange liquidation with your creditors (creditors' voluntary liquidation)](https://www.gov.uk/liquidate-your-company/creditors-voluntary-liquidation)

## Winding-up petitions and compulsory liquidation

A creditor owed £750 or more who can prove the company cannot pay can apply to the court to wind it up; the application is a winding-up petition, and the result is a compulsory liquidation ([GOV.UK](https://www.gov.uk/wind-up-a-company-that-owes-you-money)). In law, a company is deemed unable to pay its debts if it neglects for 3 weeks a written statutory demand for a sum exceeding £750, if a court judgment against it goes unsatisfied, or if it is proved that it cannot pay its debts as they fall due ([Insolvency Act 1986, section 123](https://www.legislation.gov.uk/ukpga/1986/45/section/123)).

- The rules in the table come from GOV.UK's guides to [statutory demands](https://www.gov.uk/protecting-company-from-compulsory-liquidation/statutory-demand), [court judgments](https://www.gov.uk/protecting-company-from-compulsory-liquidation/court-judgment), [winding-up petitions](https://www.gov.uk/wind-up-a-company-that-owes-you-money), [the court hearing](https://www.gov.uk/wind-up-a-company-that-owes-you-money/the-court-hearing), [validation orders](https://www.gov.uk/liquidate-your-company/access-to-your-bank-account) and [winding-up orders](https://www.gov.uk/protecting-company-from-compulsory-liquidation/winding-up-order).
- Directors can petition too. They must show the court that the company cannot pay debts of £750 or more and that 75% of shareholders by value of shares agree ([GOV.UK](https://www.gov.uk/liquidate-your-company/apply-to-court)).
- After the order you must co-operate with the official receiver, and a director who does not carry out their duties properly can be banned for up to 15 years ([GOV.UK](https://www.gov.uk/protecting-company-from-compulsory-liquidation/winding-up-order)). If part of the company is bought to shut it down rather than run as a going concern, the employees lose their jobs.

| Stage | What happens | Deadline or fee |
| --- | --- | --- |
| Statutory demand or court judgment | Pay, agree to pay later (for example through a CVA), put the company into administration or wind it up yourself. On a statutory demand you can also ask the court to stop a winding-up petition | 21 days for a statutory demand; 14 days for a court judgment |
| Petition | The creditor files form Comp 1 and form Comp 2 with evidence of the debt, such as the statutory demand or judgment | £352 court fees and a £2,600 petition deposit |
| Bank account | Frozen once a winding-up petition is filed; a validation order from the court lets the company use it | £155 fee to apply for a validation order |
| Advertisement | The petitioner advertises the petition in The Gazette and sends the court a copy with form Comp 3 | At least 7 working days before the hearing; Comp 3 at least 5 working days before |
| Before the hearing | The court can put the company under someone else's control: provisional liquidation | Until the hearing |
| Winding-up order | The official receiver takes charge, the bank account is usually frozen and the assets are sold | Apply to cancel the order within 5 working days |

Source: [GOV.UK: Wind up a company that owes you money](https://www.gov.uk/wind-up-a-company-that-owes-you-money)

## Directors' duties when a company is insolvent: wrongful trading

Once a company is insolvent, the interests of its creditors legally come before those of its directors and shareholders ([GOV.UK](https://www.gov.uk/closing-a-limited-company)). The rule that catches directors is wrongful trading. If the company goes into insolvent liquidation, the court can order a director to contribute to its assets if, before the winding up, they knew or ought to have concluded that there was no reasonable prospect of avoiding insolvent liquidation or insolvent administration ([Insolvency Act 1986, section 214](https://www.legislation.gov.uk/ukpga/1986/45/section/214)).

The defence is to show that from that point the director took every step to minimise the potential loss to creditors that they ought to have taken. The standard is a reasonably diligent person with the general knowledge, skill and experience expected of someone in the director's role, and the director's own.

- Personal liability: if the company keeps trading when you know it cannot pay its debts, you might be held personally liable for its debts, and you could be disqualified as a director for up to 15 years ([Insolvency Service](https://www.gov.uk/guidance/director-information-hub-possible-consequences-of-not-following-the-rules)).
- Unfit conduct: a director can be banned for 2 to 15 years or prosecuted if the liquidator decides their conduct was unfit ([GOV.UK](https://www.gov.uk/liquidate-your-company/what-happens-to-directors)).
- Company names: directors of a company in compulsory or creditors' voluntary liquidation are banned for 5 years from forming, managing or promoting a business with the same or a similar name. One exception is a sale of the business by a licensed insolvency practitioner who gives the legally required notice ([GOV.UK](https://www.gov.uk/liquidate-your-company/what-happens-to-directors)).
- Duties after the appointment: although your director duties cease in a liquidation, you must fully co-operate with the liquidator ([Insolvency Service](https://www.gov.uk/guidance/director-information-hub-compulsory-liquidation)). Current and former officers, and people employed by the company in the past year, must give the office-holder the information they reasonably require about its business, dealings, affairs or property, and attend when asked ([section 235](https://www.legislation.gov.uk/ukpga/1986/45/section/235)).
- Breathing space: a court moratorium protects the company from most creditor action for 20 business days while you look at rescue options, and can be extended by a further 20 business days. A licensed insolvency practitioner acts as monitor, and you must keep carrying out your duties as a director ([Insolvency Service](https://www.gov.uk/guidance/director-information-hub-how-to-get-a-moratorium)).

Source: [Insolvency Act 1986, section 214 (wrongful trading)](https://www.legislation.gov.uk/ukpga/1986/45/section/214)

## What the liquidator or administrator does with company assets

Selling assets for creditors is the core of the job. A liquidator can sell any of the company's property by public auction or private contract, as a whole or in parcels ([Schedule 4](https://www.legislation.gov.uk/ukpga/1986/45/schedule/4)), and an administrator can sell or otherwise dispose of the company's property by public auction or private contract ([Schedule 1](https://www.legislation.gov.uk/ukpga/1986/45/schedule/1)). The office-holder can ask the court to order anyone holding property, books, papers or records the company appears to be entitled to, to hand them over ([section 234](https://www.legislation.gov.uk/ukpga/1986/45/section/234)).

- Payments to creditors out of the company's assets follow a strict hierarchy set out by government ([R3](https://www.r3.org.uk/administration/)).
- In a liquidation, the liquidator will generally make sure that trading stops and that company records are collected ([Insolvency Service](https://www.gov.uk/guidance/director-information-hub-compulsory-liquidation)).

| Procedure | What happens to the assets | Where the money goes |
| --- | --- | --- |
| Administration | The administrator controls everything the company owns and may sell the business as a going concern or sell the assets | Secured creditors can be repaid; unsecured creditors only through the prescribed part, unless a liquidation, a CVA or the court allows more |
| Creditors' voluntary liquidation | The liquidator secures and realises the assets, including unpaid invoices for work completed | Creditors; the liquidator acts in their interest |
| Compulsory liquidation | The official receiver turns the assets into money | The company's debts; other creditors can register to claim |
| Members' voluntary liquidation | The liquidator sells the assets and pays the debts | Any money left goes to shareholders |
| CVA | The company keeps trading | Creditors, through the payment schedule the insolvency practitioner agreed |

Source: [Insolvency Act 1986, Schedule 4 (powers of liquidator)](https://www.legislation.gov.uk/ukpga/1986/45/schedule/4)

## Are company records and data assets in an insolvency?

Yes. In the Insolvency Act, property includes money, goods, things in action, land and every description of property, and records include computer records and other non-documentary records ([section 436](https://www.legislation.gov.uk/ukpga/1986/45/section/436)). The ICO's data sharing code gives insolvency as an example of when data might be sold as an asset to a different legal personality, and notes that an insolvency practitioner may be taking the role of controller for the time being ([ICO](https://ico.org.uk/for-organisations/uk-gdpr-guidance-and-resources/data-sharing/data-sharing-a-code-of-practice/due-diligence/)).

Buyers pay for this kind of archive. As part of Spirit Airlines' US bankruptcy, the winning bid for the carrier's decades of data, including 100 million emails, 500 million Teams messages and 176,000 employee records, was $10 million, [MIT Technology Review reported](https://www.technologyreview.com/2026/10/13/1145755/ai-labs-buying-data-from-dead-startups-to-train-models/). It added that the proceeds of such sales typically flow to senior creditors and investors, not employees.

- Under UK GDPR, the seller must work out what data is being transferred, the purposes it was originally obtained for and the lawful basis for sharing it, document the sharing and consider when and how to tell the people it is about ([ICO](https://ico.org.uk/for-organisations/uk-gdpr-guidance-and-resources/data-sharing/data-sharing-a-code-of-practice/due-diligence/)).
- Transferring a database or list of individuals is data sharing whether it is for money or not, and the buyer has to satisfy itself about the integrity of the data it receives ([ICO](https://ico.org.uk/for-organisations/uk-gdpr-guidance-and-resources/data-sharing/data-sharing-a-code-of-practice/sharing-personal-data-in-databases-and-lists)). Expect buyers to ask how the data was collected and what people were told.
- De-identified operational records are the usual way to license this material: suppliers scrub personally identifiable information and exclude HR records, according to [MIT Technology Review](https://www.technologyreview.com/2026/10/13/1145755/ai-labs-buying-data-from-dead-startups-to-train-models/). See [licensing company data under UK GDPR](https://origindatapartners.com/guides/uk-gdpr-licensing-company-data-ai) and [how to de-identify company data](https://origindatapartners.com/guides/de-identify-company-data-before-licensing).

Source: [ICO: Due diligence when sharing data following mergers and acquisitions](https://ico.org.uk/for-organisations/uk-gdpr-guidance-and-resources/data-sharing/data-sharing-a-code-of-practice/due-diligence/)

## Before you delete company systems, check what the records are worth

A struggling company cancels subscriptions to save cash, and that deletes the email, chat, ticketing and code archives with them. In an insolvency there is a second reason to stop: the records belong to the company, the office-holder will want them, and the court can order anyone holding them to hand them over (see above).

Checking the value takes minutes: [see what your company's records are worth](https://origindatapartners.com/check-fit) from six questions about the business, before any system is switched off or an insolvency practitioner is appointed.

- Retention: keep everything the office-holder may need to investigate the company and the directors' conduct, and anything tied to a dispute or claim.
- Value: operational records such as support tickets, work orders, email and chat archives and code repositories can be licensed to AI developers. AI labs are buying data from dead startups to train their models, [MIT Technology Review reported](https://www.technologyreview.com/2026/10/13/1145755/ai-labs-buying-data-from-dead-startups-to-train-models/) in October 2026.
- Timing: once appointed, the insolvency practitioner decides what is sold and how. Tell them early that the records may have value, so the systems are kept long enough to be valued.
- Hands off: do not sell or copy the records yourself on the eve of the appointment. Creditors' interests already come first, and the liquidator will report on the directors' conduct.


## How directors can help the insolvency practitioner get value for the records

The office-holder acts for the creditors as a whole ([Schedule B1, paragraph 3](https://www.legislation.gov.uk/ukpga/1986/45/schedule/B1/paragraph/3)) but often arrives knowing little about the company's systems. Directors can close that gap, and giving the information the office-holder reasonably requires is a legal duty anyway ([section 235](https://www.legislation.gov.uk/ukpga/1986/45/section/235)).

- List the systems: each tool, what it holds, the years covered and the approximate volume, plus the admin accounts and who holds the logins. The [data inventory template](https://origindatapartners.com/blog/company-data-inventory-template) gives the columns.
- Flag the personal data: which archives hold customer or staff details and what the privacy notices said, because the seller has to know the original purposes and the lawful basis ([ICO](https://ico.org.uk/for-organisations/uk-gdpr-guidance-and-resources/data-sharing/data-sharing-a-code-of-practice/due-diligence/)).
- Flag the contracts: customer agreements or software terms that limit how data can be used or transferred.
- Ask for the records to be valued in any pre-pack, since the SIP 16 statement must report the valuations obtained for the business or its underlying assets ([SIP 16](https://www.icaew.com/-/media/corporate/files/regulations/insolvency/sips/england/sip-16-e-and-w-prepackaged-sales-in-administrations-apr-2021.ashx)).
- Then step back: once a liquidator is appointed, directors no longer control the company or anything it owns and cannot act on its behalf ([GOV.UK](https://www.gov.uk/liquidate-your-company/what-happens-to-directors)).

Source: [Insolvency Act 1986, section 235 (duty to co-operate with office-holder)](https://www.legislation.gov.uk/ukpga/1986/45/section/235)

## If a company goes into administration, do employees get redundancy pay?

Yes, if they are made redundant and qualify, they can claim from the government. The insolvency practitioner or official receiver must tell employees how their jobs are affected, and gives each an RP1 fact sheet and a case reference (CN) number to claim with ([GOV.UK](https://www.gov.uk/your-rights-if-your-employer-is-insolvent/your-rights)). Employees asked to keep working after the insolvency can still claim redundancy pay and money owed if they are made redundant later.

- The caps are £719 a week for anyone made redundant before 6 April 2026 ([GOV.UK](https://www.gov.uk/your-rights-if-your-employer-is-insolvent/what-you-can-get)).
- Apply for redundancy, unpaid wages and holiday pay within 6 months of being dismissed; you cannot claim without the CN number ([GOV.UK](https://www.gov.uk/your-rights-if-your-employer-is-insolvent/apply-money-owed)).
- Missing pension contributions: contact the insolvency practitioner or official receiver.

| Payment | What employees can get | Cap |
| --- | --- | --- |
| Redundancy pay | With 2 years' continuous service: half a week's pay per full year under 22, a week's pay per year from 22 to 40, a week and a half per year at 41 or older, for up to 20 years | £751 a week |
| Unpaid wages, overtime, bonuses, commission | Up to 8 weeks, if the money is in the employment contract | £751 a week |
| Holiday pay | Up to 6 weeks, for holiday taken or accrued in the 12 months before the insolvency | £751 a week |
| Statutory notice pay | A week's notice for every year employed, up to 12 weeks | £751 a week |

Source: [GOV.UK: Your rights if your employer is insolvent, what you can get](https://www.gov.uk/your-rights-if-your-employer-is-insolvent/what-you-can-get)

## How long liquidation and administration take: the deadlines

There is no single answer: each procedure runs on its own clock. These are the fixed points, each sourced in the sections above.

| When | What | Rule |
| --- | --- | --- |
| 14 days after a court judgment | Pay, agree terms or start a formal process | Otherwise creditors can seek bailiffs or a winding-up |
| 21 days after a statutory demand | Respond, or apply to stop a winding-up petition | GOV.UK |
| 20 business days | A moratorium; extendable by a further 20 business days | Longer extensions need creditor consent |
| Within a month of appointment | The insolvency practitioner draws up the CVA | Approved if 75% of voting creditors by debt value agree |
| 14 and 15 days after a CVL resolution | Gazette advert; filing at Companies House | GOV.UK |
| At least 7 working days before a petition hearing | Gazette advert of the winding-up petition | Form Comp 3 at least 5 working days before |
| Within 5 working days of a winding-up order | Last chance to apply to cancel it | GOV.UK |
| Within 7 calendar days of a pre-pack sale | SIP 16 statement to creditors | SIP 16 |
| First 8 weeks of administration | Administrator's proposals; sales to connected people need creditor approval or an evaluator's report | Schedule B1 paragraph 49; 2021 Regulations |
| 1 year after appointment | Administration ends automatically unless the court or creditors extend it | Schedule B1 paragraph 76 |
| Within 6 months of dismissal | Employees claim redundancy, wages and holiday pay | GOV.UK |
| 5 years after a CVL or compulsory liquidation | The ban on re-using the company name ends | GOV.UK |


## How to keep that option open

Before the appointment, keep admin access, stop any automatic deletion and describe what you hold at company level: the systems, years covered and approximate volume. The [deals tracker](https://origindatapartners.com/guides/ai-data-licensing-deals) lists public prices as reported.

Money from licensing records is company money like any other sale proceeds, so it goes to creditors in the order the law sets. For the UK market, see [selling company data in the UK](https://origindatapartners.com/sell-company-data/united-kingdom); for timing, [selling company data after closing](https://origindatapartners.com/guides/sell-company-data-after-closing) and [how Origin helps companies winding down](https://origindatapartners.com/who-we-help/companies-winding-down). If the company can pay its debts and you only want to close it, use the [UK closing checklist](https://origindatapartners.com/guides/close-a-limited-company-uk). A US company in the same position may use an [assignment for the benefit of creditors](https://origindatapartners.com/guides/company-data-assignment-for-benefit-of-creditors).


## Next step

Start with advice from a licensed insolvency practitioner and one list of every creditor, employee, asset and system. If the company holds years of tickets, work orders, chat or code, describe them before anything is switched off or the appointment is made; no export is needed to find out whether they are worth licensing.

This guide is general information about insolvency in England and Wales, not legal or insolvency advice. Scotland and Northern Ireland have different processes; take advice on your own company before acting.

Origin Data Partners is independent and is not affiliated with any AI data buyer. We help owners compare buyers and find the best fit for their records. [See what your data is worth](https://origindatapartners.com/check-fit).


## Questions and answers

### What happens when a company goes into administration?

A licensed insolvency practitioner is appointed as administrator and takes control of the company and everything it owns. While the administration lasts, creditors cannot take legal action and nobody can apply to wind the company up. Within 8 weeks the administrator sets out proposals: a company voluntary arrangement so the company keeps trading, a sale of the business as a going concern, or a sale of the assets and closure. Administration ends automatically after one year unless it is extended.

### What happens when a company goes into liquidation?

The company stops doing business and employing people. A liquidator, who is an authorised insolvency practitioner or the official receiver, takes control; the directors can no longer act for the company and must hand over its assets, records and paperwork. The liquidator settles contracts and disputes, sells the assets, pays creditors, interviews the directors and reports on what went wrong, then has the company removed from the register.

### What is the difference between administration and liquidation?

Administration tries to rescue the company or its business, or to get creditors a better result than an immediate winding up, and protects the company from creditors' legal action while the administrator works. Liquidation ends the company: the assets are sold, creditors are paid and the company is removed from the register. An administration can itself end in a company voluntary arrangement, a sale of the business or a creditors' voluntary liquidation.

### What does an insolvency practitioner do?

A licensed insolvency practitioner acts as administrator, liquidator, the practitioner behind a company voluntary arrangement or the monitor of a moratorium. As liquidator they take control of the company, sell its assets, pay creditors and report on the directors' conduct. In administration the company pays the administrator's fees, and a CVA practitioner charges to set up and run the arrangement. You can search the Insolvency Service's register by name, town or county.

### What is a pre-pack administration?

A sale of all or part of a company's business or assets negotiated with a buyer before an administrator is appointed and completed on or shortly after appointment. The administrator must explain it to creditors in a SIP 16 statement within seven calendar days of the sale. If the buyer is connected to the company, such as a director, a sale of all or a substantial part of the business in the first 8 weeks needs creditor approval or an independent evaluator's report.

### Can a director be personally liable when a company goes into liquidation?

Yes. If a director knew or ought to have concluded that the company could not avoid insolvent liquidation and did not take every step to minimise creditors' losses, the court can order them to contribute to the company's assets for wrongful trading. Directors can also be disqualified for 2 to 15 years for unfit conduct, and after a creditors' voluntary or compulsory liquidation they are banned for 5 years from re-using the company's name, with limited exceptions.

### If a company goes into administration, do I get redundancy pay?

If you are made redundant and were continuously employed for 2 years or more, you can claim redundancy pay from the government, along with up to 8 weeks of unpaid wages, up to 6 weeks of holiday pay and statutory notice pay, each capped at £751 a week. The insolvency practitioner gives you a case reference (CN) number, and you must apply within 6 months of being dismissed.

### Can a liquidator or administrator sell company data?

Yes. Records, computer records included, are company property, and a liquidator can sell the company's property by public auction or private contract, with administrators holding a similar power. Personal data inside the records can only be transferred in line with UK GDPR: the ICO expects the seller to know why the data was collected, the lawful basis for sharing it and how people will be told. De-identified operational records are the usual way to license them.

## Sources

- [GOV.UK: Closing a limited company](https://www.gov.uk/closing-a-limited-company)
- [GOV.UK: Liquidate your limited company](https://www.gov.uk/liquidate-your-company)
- [GOV.UK: Arrange liquidation with your creditors (creditors' voluntary liquidation)](https://www.gov.uk/liquidate-your-company/creditors-voluntary-liquidation)
- [GOV.UK: Apply directly to the court (compulsory liquidation by the directors)](https://www.gov.uk/liquidate-your-company/apply-to-court)
- [GOV.UK: What the liquidator does](https://www.gov.uk/liquidate-your-company/what-the-liquidator-does)
- [GOV.UK: What happens to directors in a liquidation](https://www.gov.uk/liquidate-your-company/what-happens-to-directors)
- [GOV.UK: Access to your bank account (validation orders)](https://www.gov.uk/liquidate-your-company/access-to-your-bank-account)
- [GOV.UK: Put your company into administration](https://www.gov.uk/put-your-company-into-administration)
- [GOV.UK: Company Voluntary Arrangements](https://www.gov.uk/company-voluntary-arrangements)
- [GOV.UK: Responding to a statutory demand](https://www.gov.uk/protecting-company-from-compulsory-liquidation/statutory-demand)
- [GOV.UK: Responding to a court judgment](https://www.gov.uk/protecting-company-from-compulsory-liquidation/court-judgment)
- [GOV.UK: Getting a winding-up order](https://www.gov.uk/protecting-company-from-compulsory-liquidation/winding-up-order)
- [GOV.UK: Wind up a company that owes you money](https://www.gov.uk/wind-up-a-company-that-owes-you-money)
- [GOV.UK: Winding-up petitions, the court hearing](https://www.gov.uk/wind-up-a-company-that-owes-you-money/the-court-hearing)
- [GOV.UK: Your rights if your employer is insolvent](https://www.gov.uk/your-rights-if-your-employer-is-insolvent/your-rights)
- [GOV.UK: Your rights if your employer is insolvent, what you can get](https://www.gov.uk/your-rights-if-your-employer-is-insolvent/what-you-can-get)
- [GOV.UK: Your rights if your employer is insolvent, apply for money you're owed](https://www.gov.uk/your-rights-if-your-employer-is-insolvent/apply-money-owed)
- [GOV.UK: Find an insolvency practitioner](https://www.gov.uk/find-an-insolvency-practitioner)
- [GOV.UK: Get information about a company](https://www.gov.uk/get-information-about-a-company)
- [Insolvency Service: Director information hub, administration](https://www.gov.uk/guidance/director-information-hub-administration)
- [Insolvency Service: Director information hub, compulsory liquidation](https://www.gov.uk/guidance/director-information-hub-compulsory-liquidation)
- [Insolvency Service: Director information hub, creditors' voluntary liquidation](https://www.gov.uk/guidance/director-information-hub-creditors-voluntary-liquidation-cvl)
- [Insolvency Service: Director information hub, how to get a moratorium](https://www.gov.uk/guidance/director-information-hub-how-to-get-a-moratorium)
- [Insolvency Service: Director information hub, possible consequences of not following the rules](https://www.gov.uk/guidance/director-information-hub-possible-consequences-of-not-following-the-rules)
- [Insolvency Service: Independent scrutiny of the disposal of assets in administration, including pre-pack sales](https://www.gov.uk/government/publications/requirements-for-independent-scrutiny-of-the-disposal-of-assets-in-administration-including-pre-pack-sales/requirements-for-independent-scrutiny-of-the-disposal-of-assets-in-administration-including-pre-pack-sales)
- [Insolvency Act 1986, section 123 (inability to pay debts)](https://www.legislation.gov.uk/ukpga/1986/45/section/123)
- [Insolvency Act 1986, section 214 (wrongful trading)](https://www.legislation.gov.uk/ukpga/1986/45/section/214)
- [Insolvency Act 1986, section 234 (getting in the company's property)](https://www.legislation.gov.uk/ukpga/1986/45/section/234)
- [Insolvency Act 1986, section 235 (duty to co-operate with office-holder)](https://www.legislation.gov.uk/ukpga/1986/45/section/235)
- [Insolvency Act 1986, section 436 (definitions of property and records)](https://www.legislation.gov.uk/ukpga/1986/45/section/436)
- [Insolvency Act 1986, Schedule B1, paragraph 3 (purpose of administration)](https://www.legislation.gov.uk/ukpga/1986/45/schedule/B1/paragraph/3)
- [Insolvency Act 1986, Schedule B1, paragraph 49 (administrator's proposals)](https://www.legislation.gov.uk/ukpga/1986/45/schedule/B1/paragraph/49)
- [Insolvency Act 1986, Schedule B1, paragraph 76 (automatic end of administration)](https://www.legislation.gov.uk/ukpga/1986/45/schedule/B1/paragraph/76)
- [Insolvency Act 1986, Schedule 1 (powers of administrator)](https://www.legislation.gov.uk/ukpga/1986/45/schedule/1)
- [Insolvency Act 1986, Schedule 4 (powers of liquidator)](https://www.legislation.gov.uk/ukpga/1986/45/schedule/4)
- [The Administration (Restrictions on Disposal etc. to Connected Persons) Regulations 2021, regulation 3](https://www.legislation.gov.uk/uksi/2021/427/regulation/3)
- [ICAEW: SIP 16 (England and Wales), pre-packaged sales in administrations](https://www.icaew.com/-/media/corporate/files/regulations/insolvency/sips/england/sip-16-e-and-w-prepackaged-sales-in-administrations-apr-2021.ashx)
- [R3: Administration](https://www.r3.org.uk/administration/)
- [ICO: Due diligence when sharing data following mergers and acquisitions](https://ico.org.uk/for-organisations/uk-gdpr-guidance-and-resources/data-sharing/data-sharing-a-code-of-practice/due-diligence/)
- [ICO: Sharing personal data in databases and lists](https://ico.org.uk/for-organisations/uk-gdpr-guidance-and-resources/data-sharing/data-sharing-a-code-of-practice/sharing-personal-data-in-databases-and-lists)
- [MIT Technology Review: AI labs buying data from dead startups (Oct 2026)](https://www.technologyreview.com/2026/10/13/1145755/ai-labs-buying-data-from-dead-startups-to-train-models/)

## Related reading

- [How to close a limited company in the UK: a checklist](https://origindatapartners.com/guides/close-a-limited-company-uk)
- [/sell-company-data/united-kingdom](https://origindatapartners.com/sell-company-data/united-kingdom)
- [Can a UK company license its data to AI companies under UK GDPR?](https://origindatapartners.com/guides/uk-gdpr-licensing-company-data-ai)
- [Closing a software business: what could have value beyond the code?](https://origindatapartners.com/guides/sell-company-data-after-closing)
- [/who-we-help/companies-winding-down](https://origindatapartners.com/who-we-help/companies-winding-down)