The term receivership usually refers to Administrative Receivership although there are other types of procedure.

An Administrative Receiver is appointed by a creditor (usually a tender with security), in the form of a floating charge over the majority of a company's assets. Typically the company has failed to adhere to the terms of the repayment agreement with the creditor, and the creditor has issued formal demand for payment which has not been met.

The Receiver's powers can be found within the security documentation but normally include the power to trade the business and sell its assets, as well as additional statutory powers.

The Administrative Receiver's duty, largely, is to realise the assets subject to the appointer's security, which usually includes the majority of the Company's assets, but he owes no duty to the company's other creditors.

The Receiver's job is complete once he has realised all of the assets to the appointor's charge, or has sufficient assets in order to repay his appointor in full. At this time the management of the business may be handed back to the directors or to a Liquidator for the purposes of formal winding-up proceedings.