Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Insolvency definition

What does Insolvency mean? In practice, insolvency describes a financial state where a debtor cannot meet liabilities when due, triggering remedies such as administration, liquidation or bankruptcy and informing directors’ duties and avoidance claims. For companies in England & Wales, Scotland and Northern Ireland, the Insolvency Act 1986, s 123 sets two alternative tests: - Cash‑flow insolvency: an inability to pay debts as they fall due. The inquiry is practical and forward‑looking, not confined to today’s bills (Re Patrick & Lyon Ltd [1933] Ch 786; BNY Corporate Trustee Services Ltd v Eurosail [2013] UKSC 28). - Balance‑sheet insolvency: liabilities (including contingent and prospective liabilities) exceed assets on...

Key restructuring and insolvency bodies: UK, European and international regulators, trade associations and professional organisations

Published by a LexisNexis Restructuring & Insolvency expert

Practice notes

This Practice Note outlines the principal restructuring and Insolvency industry, government and regulatory organisations across the UK, Europe and the wider world.

UK bodies

Insolvency Service

The Insolvency Service is a government Agency that seeks to foster economic confidence by assisting people facing financial difficulty, tackling financial misconduct and maximising recoveries for creditors. It operates as an executive agency within the Department for Business and Trade (DBT), previously known as the Department for Business, Energy and Industrial Strategy. The Service supervises the recognised professional bodies (RPBs) to ensure the individuals they authorise are suitable to act as insolvency practitioners. There are three RPBs: the Institute of Chartered Accountants of England and Wales (ICAEW), the Institute of Chartered Accountants of Scotland and the Insolvency Practitioners Association (IPA). With effect from 1 June 2025, at its request, recognition of the Institute of Chartered Accountants in Ireland as an RPB was withdrawn. The Insolvency Service carries out a range of functions. It:

administers bankruptcies and debt relief orders
reviews the affairs of companies in liquidation and reports any director misconduct
investigates trading companies and takes action

...

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Web page updated on 27/05/2026

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