Company insolvencies – managing risk and protecting your business

Bradley Bennett, Solicitor

Company insolvency continues to present significant challenges for businesses, whether they are owed money by a struggling customer, operating within a financially distressed supply chain, or facing the prospect of a commercial dispute.

The latest figures highlight the importance of understanding insolvency risks and taking early action to protect your business.

What’s happening?

The Insolvency Service recorded 1,946 company insolvencies in England and Wales in August 2026. This included 1,431 creditors’ voluntary liquidations (CVLs), representing around 74% of the total, and 182 administrations.

Administrations were 60% higher than in August 2025. The Insolvency Service notes that administration numbers have been volatile in recent months, driven by more than 250 connected companies in the real estate sector entering administration between March and August 2026.

What does this mean for your business?

For businesses trading on credit, customer or supplier insolvency can quickly become a commercial and legal issue. Unpaid invoices, disputed liabilities and contractual obligations can all expose a business to financial loss.

While overall insolvency numbers have remained broadly stable, the figures suggest that businesses continue to face challenging trading conditions. The sharp increase in administrations may indicate that more companies are pursuing restructuring and rescue options, while the continued prevalence of creditors’ voluntary liquidations suggests that many directors are taking proactive steps to address financial difficulties before creditor action becomes unavoidable.

Steps businesses can take to protect their position

• Regularly review credit exposure.
• Keep clear records of contracts and payment terms.
• Act promptly when invoices become overdue.
• Understand the relevant insolvency process if a customer enters insolvency.
• Assess the status and potential recovery of any claim.

For businesses experiencing cash-flow pressure, obtaining early advice can help identify options for recovering debts, resolving disputes and managing contractual liabilities before issues escalate.

How can we help?

Our teams across commercial litigation, corporate, and commercial property advise on exactly these situations. If you are concerned about your business’ position, it is worth having that conversation sooner rather than later. Get in touch with our restructuring and insolvency team on 0161 832 3434, or at [email protected].