Scottish Insolvency
vs England & Wales
If your company is registered in Scotland, be careful when relying on insolvency advice you find online.
Much of the UK’s insolvency content is written primarily for companies in England and Wales.
The overall principles are similar, and procedures such as CVL, CVA and administration exist on both sides of the border. But some important parts of the process are different in Scotland.
Those differences include:
- How a Scottish CVL is conducted
- The role of the Accountant in Bankruptcy
- The Edinburgh Gazette rather than the London Gazette
- Scottish Sheriff Courts and the Court of Session
- The absence of an Official Receiver in Scottish compulsory liquidation
- Scottish creditor enforcement through sheriff officers and diligence
You do not need to learn two insolvency systems. You simply need to make sure the advice you follow is appropriate for the company you actually have.
Scottish insolvency and England & Wales: the main differences
| Issue | Scotland | England & Wales |
|---|---|---|
| Voluntary insolvent liquidation | Creditors decide on the liquidator by deemed consent or a decision procedure conducted virtually, under Scottish rules | Creditor decisions are also sought through deemed consent or a decision procedure under the England & Wales rules |
| Official insolvency body | Accountant in Bankruptcy has important Scottish corporate insolvency functions | Insolvency Service and Official Receiver have roles within the England & Wales system |
| Gazette | Edinburgh Gazette | London Gazette |
| Compulsory liquidation courts | Court of Session or an appropriate Sheriff Court | High Court and other courts with the appropriate insolvency jurisdiction |
| After a winding-up order | An interim liquidator is appointed | The Official Receiver initially takes responsibility in a court liquidation |
| Creditor enforcement | Sheriff officers and Scottish diligence | Different court enforcement procedures and enforcement agents |
| Bank enforcement | Arrestment | Different enforcement procedures apply to money held by third parties |
There are many areas where the legal principles remain closely connected, so the two systems should not be thought of as completely separate.
But these procedural differences matter when a company is actually entering insolvency or facing creditor enforcement.
How do I know whether Scottish insolvency rules apply?
For most owner-managed UK companies, the obvious starting point is the company’s registered jurisdiction.
A company incorporated in Scotland will normally:
- Have a Scottish registered office; and
- Have a Companies House registration number beginning with SC
Where the directors live or where customers are based does not change that by itself.
A Scottish company can trade throughout England, Wales or internationally and still be a Scottish registered company.
If you are unsure, check the company’s Companies House record before relying on insolvency guidance aimed at a different jurisdiction.
Is a Scottish CVL different from an English CVL?
Yes, although the overall purpose is the same.
In either jurisdiction, a Creditors’ Voluntary Liquidation is used where an insolvent company is being wound up voluntarily.
The company’s assets are dealt with by a licensed insolvency practitioner and creditors make claims in the liquidation.
But the way the liquidator is appointed and creditors participate at the beginning differs.
How do creditors decide on a liquidator in a Scottish CVL?
In a Scottish CVL, the directors seek creditors’ decision on the nomination of a liquidator by deemed consent or a decision procedure conducted virtually.
The creditors’ decision date must be at least three business days after the notice is delivered and no later than 14 days after the winding-up resolution. The directors send the statement of affairs within the statutory seven-day period, and creditors must receive it by the business day before the decision date.
Procedures in England and Wales also provide ways to seek creditors’ decisions. The Scottish rules and associated filings must be followed for a Scottish company.
Is the shareholders’ vote different?
The core requirement is broadly the same.
A company entering CVL needs the necessary shareholder approval to pass the special resolution to wind the company up.
That normally requires at least 75% of the votes cast by those entitled to vote under the applicable special-resolution rules.
The difference directors are more likely to notice comes in what happens with creditors after the winding-up decision has been made.
Which Gazette is used in Scotland?
Scottish insolvency notices are published in the Edinburgh Gazette.
English and Welsh company insolvency notices normally appear in the London Gazette.
This matters for matters including:
- Voluntary winding-up resolutions
- Liquidator appointments
- Winding-up petitions
- Other statutory insolvency notices
If you are checking whether insolvency action has been taken against a Scottish company, make sure you are looking in the right Gazette.
What is the Accountant in Bankruptcy — and why is it not mentioned on English insolvency sites?
The Accountant in Bankruptcy, or AiB, is Scotland’s insolvency service.
It has important responsibilities for the devolved parts of Scottish corporate insolvency.
In particular, AiB is responsible for the Scottish Register of Insolvencies and receives information about Scottish company liquidations and receiverships.
That is why a Scottish liquidator may need to make filings or notifications both to Companies House and AiB.
You will not see that process described in guidance written for an English company because AiB is specific to Scotland.
Who deals with compulsory liquidation in Scotland?
Scottish winding-up proceedings are dealt with through the Scottish courts.
A company can be wound up by:
- The Court of Session; or
- A Sheriff Court with the appropriate jurisdiction
In England and Wales, compulsory winding-up proceedings are instead dealt with through the English and Welsh court system.
This becomes important where a creditor has actually presented a winding-up petition.
If your company is Scottish, do not use an English court form or rely on English court deadlines because they appeared at the top of an internet search.
Does Scotland have an Official Receiver?
Not in the same way as England and Wales.
In an English or Welsh compulsory liquidation, the Official Receiver normally takes responsibility following the court’s winding-up order.
Scottish compulsory liquidation works differently.
When a Scottish company is wound up by the court, an interim liquidator is appointed.
So if you are a Scottish director and an article tells you that “the Official Receiver will contact you after liquidation”, you are probably reading guidance written for England and Wales.
Are sheriff officers the Scottish equivalent of bailiffs?
That is a useful everyday comparison, although the legal systems are not identical.
In Scotland, sheriff officers are officers of court who serve legal documents and carry out authorised enforcement.
The Scottish term for formal creditor enforcement is diligence.
A Scottish company may therefore face:
- A charge for payment
- Bank arrestment
- Attachment
- Money attachment
Those are not the terms normally used for enforcement in England and Wales.
If a debt-collection article tells you what “bailiffs” can do without discussing Scottish diligence, check whether it actually applies to your company.
Is freezing a company bank account different in Scotland?
The Scottish enforcement procedure is called arrestment.
A creditor with the necessary enforcement rights can use arrestment against money belonging to the company but held by a third party — most importantly, its bank.
If funds are arrested, the company may suddenly lose access to money it expected to use for wages and trading.
That is a specifically Scottish diligence procedure, and generic advice about freezing or seizing English company bank accounts may describe a different process.
Are CVAs different in Scotland?
The fundamental CVA procedure is very similar.
A viable but insolvent company can propose a formal arrangement with its creditors while the directors normally continue running the business.
Company Voluntary Arrangements are one of the areas of corporate insolvency that remain reserved to the UK Government.
However, Scotland has its own procedural rules dealing with Scottish CVAs.
For a director, the commercial questions are therefore much the same:
- Is the underlying business viable?
- Can it meet new liabilities?
- Can it afford the proposed contributions?
- Will creditors support the proposal?
Is administration different in Scotland?
Again, the fundamental purpose is broadly the same.
Administration can protect an insolvent company from creditor action while an administrator attempts to rescue the company, preserve its business or achieve a better outcome for creditors.
Administration is another reserved area of corporate insolvency, but Scotland has its own detailed procedural rules governing Scottish administration proceedings.
For a Scottish company, the appointment process, court procedure and filings should therefore be dealt with under the Scottish rules rather than simply following England and Wales forms.
Are directors’ responsibilities completely different in Scotland?
No.
Many of the fundamental principles applying to directors of insolvent companies operate across Great Britain.
Directors should still:
- Protect company assets
- Preserve company records
- Take creditors’ interests into account as insolvency becomes unavoidable
- Avoid making the creditor position worse
- Co-operate with the insolvency practitioner after appointment
Formal insolvency also involves review of director conduct.
The important difference is often how the insolvency itself is processed in Scotland, rather than directors suddenly being subject to an entirely different standard of behaviour.
Is personal liability different for Scottish directors?
The basic principle remains the same: a limited company is legally separate from its directors.
Company insolvency does not automatically turn HMRC, supplier or landlord debts into the director’s personal debts.
Personal exposure can still arise through matters such as:
- Personal guarantees
- Overdrawn director’s loan accounts
- Improper asset or money transfers
- Specific statutory or insolvency claims
So although the Scottish liquidation procedure differs, you should not assume the basic protection of limited liability disappears merely because the company is registered in Scotland.
Are employee redundancy claims different in Scotland?
The main insolvency employee-payment system is not a separate Scottish scheme.
Eligible employees of an insolvent Scottish company make qualifying claims through the Insolvency Service’s Redundancy Payments Service.
That can include statutory redundancy pay, unpaid wages, holiday pay and statutory notice pay, subject to the usual eligibility rules and limits.
Directors who were also genuine employees can potentially make claims as well.
Does an English insolvency practitioner need special Scottish knowledge?
The important requirement is that the person appointed is properly authorised to act as an insolvency practitioner.
But authorisation alone does not remove the practical differences between Scottish and English insolvency procedure.
If the company is Scottish, the practitioner and team dealing with the case need to understand the relevant Scottish:
- Liquidation procedure
- Forms and filings
- AiB requirements
- Gazette requirements
- Court procedures where relevant
- Creditor enforcement terminology and consequences
That matters particularly where the company is already facing urgent enforcement or court action.
Can I use an English liquidation company for my Scottish company?
The location of an adviser’s office is not by itself what determines whether they can advise on insolvency.
But if your company is Scottish, make sure the person actually dealing with the case understands and follows the Scottish process.
Before instructing anyone, useful questions include:
- Who will be the proposed liquidator?
- Are they a licensed insolvency practitioner?
- Who is actually handling the Scottish procedure?
- Do they regularly deal with Scottish company liquidations?
- Will the quoted fee cover the whole process described?
- Who will you speak to if creditor action becomes urgent?
A polished website saying “UK insolvency” is not the same as demonstrating knowledge of Scottish corporate insolvency.
What English insolvency advice should Scottish directors be careful with?
Be particularly cautious if an article tells you:
- “Scottish CVLs use the same notice and filing rules as English CVLs.” A Scottish company must follow the Scottish decision timetable and notification requirements.
- “The Official Receiver takes over after a winding-up order.” Scotland uses an interim liquidator.
- “The petition will be advertised in the London Gazette.” A Scottish petition is dealt with through the Edinburgh Gazette.
- “Bailiffs can attend your Scottish business.” Scottish enforcement uses sheriff officers and diligence.
- “Apply to this English court using this form.” Scottish compulsory winding-up proceedings use Scottish courts and procedure.
- “Apply to set aside the company statutory demand using the standard individual procedure.” Scottish company statutory demands require the appropriate corporate and Scottish response.
The article may be perfectly accurate for its intended audience. It may simply be the wrong jurisdiction for your company.
Does Scotland have completely different insolvency legislation?
No.
Much of the underlying corporate insolvency framework comes from the Insolvency Act 1986 and other UK legislation.
But company insolvency in Scotland is partly devolved.
Scotland is responsible for areas including:
- The process of company liquidation
- Receivership procedure
- The Scottish Register of Insolvencies
Reserved areas include matters such as:
- Company Voluntary Arrangements
- Administration
- Certain legal effects of liquidation
- Regulation of insolvency practitioners
Scotland also has dedicated insolvency rules covering winding up and receivership, and separate Scottish rules for CVAs and administration.
That combination explains why many underlying principles look familiar while the actual procedure can be different.
What does all of this mean for a director in practice?
Usually, less than you might think.
You do not need to become an expert in the differences between Scottish and English insolvency law.
You need to know:
- Whether the company is insolvent
- Whether the underlying business can be rescued
- What creditor action has already happened
- Whether liquidation is now unavoidable
- What your responsibilities are as a director
- Which Scottish procedure should be followed next
The technical differences are for your adviser to deal with.
Your job is to deal with the financial problem early enough that there are still useful choices available.
Scotland vs England & Wales FAQs
Is a Scottish CVL the same as an English CVL?
The purpose is essentially the same. In Scotland, creditors’ decision on the nomination of a liquidator is sought by deemed consent or a decision procedure conducted virtually, with a decision date set by the Scottish rules. Other Scottish differences include the Edinburgh Gazette, Accountant in Bankruptcy and Scottish courts.
Does Scotland use the London Gazette?
Scottish insolvency notices are published in the Edinburgh Gazette rather than the London Gazette.
Does Scotland have an Official Receiver?
Not performing the role seen in English compulsory company liquidation. In Scotland an interim liquidator is appointed when a winding-up order is made.
Are Scottish bailiffs called sheriff officers?
Sheriff officers perform court-service and enforcement functions in Scotland. Scottish debt enforcement is called diligence and differs from the enforcement system in England and Wales.
Is administration available in Scotland?
Yes. Administration is available to Scottish companies, although Scottish administration proceedings have their own procedural rules.
Are CVAs available in Scotland?
Yes. A Scottish company can use a CVA, with Scottish procedural rules applying to the process.
Are directors personally liable under different rules in Scotland?
The core limited-liability principle remains. Company insolvency does not automatically make a Scottish director responsible for company debts, although specific personal liabilities can arise.
How do I know if my company is Scottish?
Check Companies House. A Scottish incorporated company will normally have a registered office in Scotland and an SC company-registration number.
Have you found insolvency advice that does not seem to match your Scottish company?
You do not need to work out which parts are Scottish and which are English before speaking to us.
Tell us what has happened to the company and what creditor pressure you are facing.
We can explain the options using the procedure that actually applies to your Scottish company.
The principles of dealing with an insolvent business are often familiar. The important thing is getting the Scottish procedure right when it matters.