Buying assets from your own liquidation is allowed under UK insolvency law, provided the sale is at fair value, properly valued, and approved by the liquidator. Directors often want the equipment, stock, or goodwill of a failed company to restart trading, and the law does not stop this — but it does require transparency. Get the process wrong and creditors, or even the Insolvency Service, can later challenge the sale.
This is a common step in a legitimate business restart, sometimes called a "phoenix" arrangement. Done properly, with independent valuation and full disclosure, it is a routine part of many liquidations. Done informally, it can look like an attempt to strip value from creditors, which carries serious personal risk for the director.
Buying assets from your own liquidation: is it allowed?
Yes. Once a company enters liquidation, its assets belong to the insolvent estate and are controlled by the appointed liquidator, not the former directors. As a director, you are entitled to make an offer for those assets, in the same way any third party could.
The key condition is that you are treated as a connected party — someone with a prior relationship to the company — so the liquidator must apply extra scrutiny to make sure the price reflects true market value, not a discount because you used to run the business.
Why fair value and independent valuation matter
"Fair value" means the price a genuine, unconnected buyer would pay in the open market. Liquidators are duty-bound to maximise returns for creditors, so they cannot simply accept a director's offer without checking it against an independent benchmark.
In practice, this usually means:
- An independent RICS-qualified valuer assesses plant, equipment, vehicles or property.
- Stock is valued against realistic resale or liquidation value, not original cost.
- Goodwill and intangible assets, such as a customer list or trading name, are valued separately and can be harder to price.
If a director pays less than a valuer's assessment without good reason, the liquidator risks a claim of undervalue, and the director risks personal criticism or challenge later.
How the liquidator handles a sale to a connected party
Because you are a connected party, the liquidator will typically:
- Obtain one or more independent valuations before agreeing a price.
- Consider whether marketing the assets more widely would achieve a better return.
- Record the rationale for accepting your offer, including how the price was reached.
- Disclose the sale to creditors, usually in the next progress report.
This mirrors the disclosure regime described in gov.uk's guidance on liquidating a limited company, and the approach used for pre-pack sales in administration. If you want to understand how a similar connected-party sale works in a rescue rather than a liquidation, What Is a Pre-Pack Administration? covers the comparable rules and SIP 16 reporting requirements.
What assets you can buy: equipment, stock, goodwill, name
Most tangible and intangible assets of the liquidated company can, in principle, be bought back, including:
- Equipment and machinery — tools, vehicles, IT and plant used in the business.
- Stock — raw materials or finished goods, valued at realistic resale prices.
- Goodwill — the reputation and customer relationships built up by the business, valued separately from physical assets.
- Trading name or brand — subject to restrictions if you intend to reuse a name that is the same as, or similar to, the liquidated company (see below).
- Contracts and premises — where these can lawfully be assigned or re-let, though landlords and counterparties must usually consent.
What you cannot do is simply take these assets without payment, or agree an informal "handshake" price outside the liquidator's process. The transfer must go through the liquidator, be properly recorded, and be paid for.
Transparency and avoiding accusations of undervalue
The biggest risk for a director buying back company assets in liquidation is a later challenge that the price was too low. Under section 238 of the Insolvency Act 1986, a liquidator or the court can unwind a transaction at an undervalue if it was made within two years before the company entered liquidation, though this applies to pre-liquidation deals rather than sales properly conducted by the liquidator itself.
To reduce risk, directors should:
- Let the liquidator lead the process and set the price, rather than proposing a figure informally.
- Keep clear records of any valuations obtained and communications with the liquidator.
- Avoid taking or using any assets before the sale is formally agreed and paid for.
- Be open with the liquidator about your intention to restart trading.
Full disclosure, at every stage, is what separates a legitimate connected-party asset sale from something a court or the Insolvency Service could later scrutinise.
How this links to a legitimate business restart
Buying assets from your own liquidation is often the first practical step in restarting a business after insolvency. If you also intend to reuse the company name, additional rules under section 216 of the Insolvency Act 1986 apply, and breaching them is a criminal offence. Our guide to Phoenix Company Rules Explained (UK) sets out how those name restrictions work alongside the asset sale itself.
More broadly, if you are thinking about what a fresh start looks like after liquidation — funding, staffing, contracts, and reputation — Starting Again After Liquidation: A Guide walks through the wider picture beyond just the asset purchase.
Frequently asked questions
Can I buy the customer list from my liquidated company?
Yes, a customer list or database is usually treated as part of goodwill and can be bought, but it should be valued separately by the liquidator or an independent valuer, and the sale recorded like any other connected-party transaction.
What price is "fair" when buying back company assets?
Fair value is the price an independent, arm's-length buyer would reasonably pay in the open market at the time of sale, based on the assets' condition and realistic resale prospects, not their original purchase cost.
Do I have to disclose to creditors that I bought the assets?
The liquidator, not the director, is responsible for reporting connected-party sales to creditors, typically in a progress report, so the transaction should be visible rather than kept quiet.
Can the liquidator refuse to sell assets to me?
Yes. The liquidator's duty is to creditors, not to the former director, so they can reject your offer and sell to another buyer if that achieves a better return for the estate.
Is buying back assets the same as a pre-pack?
No. A pre-pack is a sale agreed before, and completed immediately after, entry into administration, whereas buying assets from a liquidation happens once the liquidator is already in control of the estate, though the fair-value principles are similar.
This article is general information, not legal, financial or insolvency advice, and does not cover every circumstance. Every liquidation is different, so directors should speak to a regulated specialist about their own situation.
If you're thinking about buying assets from your own liquidation, Harbourfirst can introduce you to a regulated insolvency practitioner or solicitor who can guide you through the process properly — start an enquiry.