• What is a receivership?

    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 outsider, 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)

    Sometimes, 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.

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