Dissolved vs Active Companies: How to Screen B2B Suppliers in the UK

When you onboard a new B2B supplier in the UK, the single most informative data point is the company's status on the Companies House register. A company that is "active" is a very different proposition to one that is "in liquidation" or "dissolved", yet many procurement teams never check. This guide explains every status you will encounter, what it means for your risk, and how to build a screening step into supplier onboarding.

The company status field, decoded

Companies House assigns each company a status reflecting its current legal position:

• Active — on the register and operating normally. The only status under which a company can validly enter most contracts.
• Dissolved — struck off the register and no longer a legal entity. It cannot sue or be sued, hold assets, or invoice you. Any "invoice" from a dissolved company is invalid and any contract void.
• Liquidation — an insolvency practitioner is winding the company up and distributing assets to creditors. Trading is high risk; goods you have paid for may be caught by the liquidation, and credit extended ranks as an unsecured claim likely to return pennies in the pound.
• Administration — protected by an administrator trying to rescue it or achieve a better result for creditors than liquidation. You may continue to trade only with the administrator's consent and on specific terms.
• Receiver / Administrative Receiver — a secured creditor (usually a bank) has appointed a receiver. This indicates serious financial distress.

Why a dissolved supplier is a serious problem

A dissolved company has ceased to exist: it cannot fulfil orders, issue valid VAT invoices, honour warranties, or enforce guarantees. If you paid in advance, your money is gone and your only route is the Crown's bona vacantia process, which is slow and uncertain. Yet dissolved companies sometimes continue to "trade" — typically because directors have moved to a new entity and use the old name and VAT number carelessly or fraudulently. The first sign is almost always a status check.

The active-but-deteriorating company

A more common risk is the company that is still "active" but showing distress. Watch for: accounts filed late or not at all, an overdue confirmation statement, a recent change of director or registered office, a sudden reduction in share capital, and a newly filed charge suggesting borrowing against assets. None is fatal alone, but late accounts plus a new charge should trigger a credit review before you extend further credit.

How to screen a supplier in practice

1. Obtain the company name and number. Every legitimate UK company can provide its registered name and 8-digit company number. If a supplier cannot, that is a red flag.
2. Look up the company. Retrieve the full profile — registered name, number, status, type, incorporation date, registered address, SIC codes, accounts and confirmation statement dates.
3. Verify the status is "active". If it is dissolved, in liquidation or administration, do not onboard without investigation. Reject a dissolved supplier outright.
4. Cross-check the registered address against the address the supplier gives you. A serviced office or flat while the supplier claims a warehouse is worth a question.
5. Check the filing history. On-time filing year after year shows governance; gaps or persistent lateness do not.
6. Verify the VAT number separately against HMRC and confirm the registered name matches the company name — a VAT number registered to a different entity is a serious red flag.
7. Record the result and date against the supplier record so you can re-check periodically.

Monitoring suppliers over time

Onboarding screening catches obvious risks, but a supplier's status can change at any time. The highest-value control is a watchlist that re-checks each supplier's status and filing dates on a schedule — monthly for critical suppliers, quarterly for others — and alerts you the moment a status changes from "active" to anything else, or when accounts become overdue. A company that files accounts two months late has a roughly doubled chance of entering insolvency within the following year; knowing early gives you time to find an alternative supplier, reduce credit exposure, or renegotiate terms before you are exposed.

What to do when a supplier goes bad

If a monitoring alert says a key supplier has entered liquidation or administration, act fast: identify open orders, advance payments and goods in transit; contact the named insolvency practitioner to establish what will be delivered and on what terms; move critical supply to a pre-screened alternative; and update your records so the dissolved entity cannot be used for further invoicing. Screening suppliers is not about refusing to do business — it is about doing business with your eyes open. A 60-second status check at onboarding, and a lightweight watchlist thereafter, is the cheapest insurance a procurement function can buy.