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Difference Between a Business Liquidator and an Official Receiver

The Official Receiver is a civil servant employed by the Insolvency Service who deals with compulsory liquidations and bankruptcies. A business liquidator is an individual working in the private sector and is a Licensed Insolvency Practitioner.

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When the directors want to liquidate a company they will need to approach a Licensed Insolvency Practitioner. Often directors will want to use a private sector business liquidator instead of an Official Receiver. An Official Receiver is funded by the government and will often have more time and resources to investigate a failed company and there is no other way of saying it, but giving directors a harder time if they have committed offences.

A company will end up with the Official Receiver as liquidator if it is forced into liquidation by creditors – this is known as a compulsory liquidation. This is different to a creditor’s voluntary liquidation which means the directors have chosen a private sector liquidator.

One other major reason to avoid compulsory liquidation is the 17% tax charged on all assets realised by the Official Receiver as well as costs and disbursements which can make it more expensive.

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