A receivership is the legal process that occurs when a receiver is sent in to take control of some or all of a company’s assets (alternatively known as enforcing a security interest).

The receiver is an independent, qualified insolvency practitioner, who is generally appointed by a secured creditor (or in special circumstances by the court).

There are two types of security interest:

• Non-circulating security interests (such as land, plant and equipment)
• Circulating security interests (such as cash, stock and debts owed to the company)

Often, a receiver is also given power to take control of the company – in that case, they’re known as a receiver and manager.

A company that is in receivership may also be in voluntary administration, a deed of company arrangement, provisional liquidation or liquidation.