The short answer
Choose by whether the business can be saved and whether the company is solvent. CVL closes an insolvent company that cannot be rescued. Administration protects a company while a viable business (or part) is rescued or sold. A CVA keeps a viable company trading while it repays creditors an agreed amount over time. Strike-off is only for a dormant company with no significant debts — never the right tool for an insolvent one.
These four procedures are often confused, yet they lead to opposite outcomes: one ends the company, one rescues it, one reschedules its debts, and one is simply an administrative closure for a clean, dormant company. Picking the wrong one wastes money and can expose directors. This guide lines them up side by side so you can see where your company fits.
Which route, in one line each
- CVL Close an insolvent company you can’t save
- Administration Rescue or sell a viable business
- CVA Keep trading; repay over ~3–5 years
- Strike-off Close a dormant, debt-free company
- Decided by Solvency + rescue potential
- Who must run insolvency routes A licensed IP
The two questions that decide it
Almost every case comes down to two questions: (1) Is there a viable business worth saving? and (2) Is the company solvent or insolvent? Your answers point to one route.
- No viable business + insolvent → CVL (close it down properly).
- Viable business but in crisis → Administration (protect & rescue/sell).
- Viable company, just over-indebted → CVA (trade on, repay over time).
- Solvent, dormant, no real debts → strike-off (or MVL if there are reserves to extract).
| Option | Best when | What happens to the company | What happens to debts |
|---|---|---|---|
| CVL | Insolvent, no viable rescue | Closed and dissolved | Unsecured debts written off on dissolution |
| Administration | Business can be rescued or sold as a going concern | Protected by a moratorium; may emerge, be sold, or move to liquidation | Better return targeted for creditors than liquidation |
| CVA | Company is viable but needs to reschedule debt | Survives and keeps trading | Creditors paid an agreed % over (typically) up to 5 years |
| Strike-off | Dormant company with no significant debts | Removed from the register | Not for insolvent companies — creditors can object & force liquidation |
Where MVL fits
If your company is solvent and you simply want to close it and extract the reserves tax-efficiently, none of the four above is right — you need a Members’ Voluntary Liquidation (MVL), a formal solvent wind-up that can allow distributions to be taxed as capital. It is a different procedure with a different purpose.
Not sure which route your company actually needs?
A licensed insolvency practitioner can assess your solvency and rescue potential in one confidential conversation and tell you which of these routes fits — and which to avoid.
Frequently asked questions
Is administration always better than liquidation?
No. Administration only makes sense where there is a viable business or assets that can deliver a better return through rescue or a going-concern sale. For a company with no viable business, a CVL is the appropriate and cheaper route.
Can a CVA fail?
Yes. If the company misses the agreed contributions or trading does not recover, the CVA can terminate and the company may then enter liquidation. A CVA only suits a genuinely viable business.
Why can’t I just strike off my insolvent company?
Strike-off is for dormant, debt-free companies. With outstanding debts, creditors (especially HMRC) can object, have the company restored and pursue a winding-up petition, and directors’ conduct is examined — so it usually costs more, not less.
Do all of these need an insolvency practitioner?
CVL, administration, CVA and MVL must be carried out by a licensed insolvency practitioner. A simple solvent strike-off can be done by the directors via Companies House, but only where the company truly has no significant debts.
Sources & further reading
- Insolvency Act 1986 — administration, voluntary arrangements and winding up
- GOV.UK — Options for a company that cannot pay its debts; Strike off your company
- The Insolvency Service — guidance for directors
- ICAEW / IPA — insolvency practitioner registers
This guide is general information, not formal insolvency advice. Your situation must be assessed by a licensed insolvency practitioner before you act.