How to check an LED display supplier before you pay a deposit (with a 2026 worked example)

LED displays are built to order. A supplier takes your deposit, places a factory order, pays freight and duty, and only sees the balance when the screen is commissioned. That is why deposits in this industry are large: a third of the contract value is common, and some suppliers ask for more.

Most of the time it works. If a supplier enters administration before performing the contract, a customer’s position depends on the contract and any proprietary or other rights. A customer in that position usually has an unsecured claim, and unsecured creditors are often paid little or nothing.

This guide gives you the checks to run before you pay, then a worked example from 2026 told entirely through public filings and press reports. None of it needs a lawyer for a small order. For a large one, it tells you what to ask the lawyer.

Terms used in this guide

Administration is a formal insolvency procedure under the Insolvency Act 1986. An administrator manages the company’s affairs, business and property as its agent and must pursue the objectives in paragraph 3 of Schedule B1 to the Act in their statutory order.

A registered charge is security granted by a company to a lender over some or all of its assets, registered at Companies House and visible to anyone. Preferential creditors include certain employee claims, such as specified wage and holiday-pay liabilities subject to the statutory rules and limits. HMRC has secondary preferential status for VAT, PAYE and employee NIC. Suppliers, landlords and customers who paid in advance will commonly have unsecured claims to the extent that they have no valid security, proprietary claim, trust right, set-off or other protection.

The checklist: ten things to check before you pay an LED display deposit

These checks apply to any supplier, including us. They are general guidance rather than legal advice.

1. Company status on Companies House

Search the supplier’s exact legal name, not its brand name, at Companies House. The overview page shows whether the company is active, in administration, in liquidation or proposed to be struck off. Check that the legal entity on your quote matches the one on the register. Brand names can be sold and reused.

2. Overdue accounts and confirmation statement

The same overview page shows when accounts and the confirmation statement were last filed and whether either is overdue. Small-company accounts show very little, so for a material order ask for management accounts as well. See our guide to LED display companies in the UK for what else to look for.

3. Registered charges, and what a lender’s debenture means

The charges page lists every registered charge, when it was created and who holds it. A lender’s debenture may contain fixed and floating charges. The holder of a qualifying floating charge may appoint an administrator where the statutory and contractual conditions are met.

Charges are normal for a trading business with an overdraft, invoice finance or an asset loan. The register shows that charges exist, but it does not by itself show the amount drawn, compliance with facility terms or the company’s overall financial position. For a material order, ask for suitable financial information.

4. Director history and connected companies

The officers page lists current and resigned directors, and each name links to that person’s other appointments. A director with several active companies in related trades, or with previous companies that went through insolvency, is not by itself a reason to walk away. It is a reason to ask which entity you are contracting with and which entity will deliver. Check the persons-with-significant-control page as well.

5. Retention of title

A retention-of-title clause seeks to reserve ownership of goods to the seller until stated conditions, commonly payment, are met. Its effect depends on the contract and the facts. It cuts both ways: if your supplier buys modules on those terms and has not paid for them, the manufacturer may assert a claim to goods in the supplier’s warehouse, even goods earmarked for you. For a material order, obtain contract advice on when title and risk pass to you and how goods allocated to the contract will be identified.

6. Staged payments rather than one large deposit

A deposit is usually a contractual prepayment. If the supplier enters administration before performing the contract, the customer may have an unsecured claim for some or all of it, depending on the contract and any proprietary or other rights. The way to limit exposure is to tie money to things you can verify:

• A smaller deposit on order.
• A payment on proof of shipment, against the bill of lading or factory shipping documents.
• A payment on delivery to site.
• The balance on commissioning, when the screen is showing your content.

For larger projects, a deposit bond or parent company guarantee adds a second party to the promise.

7. Who the manufacturer is

Ask plainly: who makes the cabinets and modules, the LED chips, and the receiving cards and processor? The answer tells you whether the supplier is a manufacturer, a brand sourcing from a factory, or a reseller. All three can be legitimate. What you need is a datasheet with the manufacturer’s part numbers, so the product can still be identified, serviced and matched if the supplier ceases to trade.

8. Who backs the warranty

A warranty is only as good as the entity that has to honour it. Ask whether it comes from the supplier, the manufacturer or both, whether it is return-to-base or on-site, and whether it survives if the supplier ceases to trade. Ask for the manufacturer’s warranty terms and contact details in writing.

9. Escrow or a letter of credit for large jobs

On six-figure orders, particularly where product is built overseas, ask your bank about an escrow arrangement or a documentary letter of credit and the documents required for payment. Our list of LED tender questions to ask suppliers covers the commercial questions to put in the RFP.

10. What to do if a supplier enters administration

If you have paid a deposit or are mid-project and the supplier appoints administrators, act quickly and in writing. For a material sum, take legal advice.

1. Contact the administrators. Their names are in the Gazette notice of appointment and on the Companies House filing history (form AM01). Write with your order number, what you have paid and what you have received.
2. Submit a proof of debt. Ask the administrators how and when to submit the prescribed information. The Insolvency (England and Wales) Rules 2016 govern proofs in a company administration in England and Wales. Keep the contract, invoices and payment confirmations.
3. Goods already delivered. If title or a third-party retention-of-title claim may affect them, obtain advice before making further payment or dealing with the goods, and seek written directions from the administrators.
4. Goods paid for but not delivered. Ask whether the goods are identifiable and held for you, or whether the sum is simply an unsecured claim.
5. Chargeback and finance protections. If you paid by card, ask the card issuer about chargeback or section 75 protection. If a funder paid the supplier, ask the funder what applies.
6. If the business is sold. A sale of some or all of a company’s business and assets by administrators is lawful and common; administrators have statutory powers to realise company property (Schedule B1, Insolvency Act 1986). A sale of goodwill and intellectual property does not automatically transfer contract obligations to the buyer, who may nevertheless choose to honour them. Ask the administrators and the buyer, in writing, whether the buyer has taken on your contract, deposit and warranty.
7. Employees. Eligible employees may be able to claim specified statutory payments from the Redundancy Payments Service, subject to its rules and limits.

Worked example: The LED Studio Ltd, 2026

This section applies the checklist to one company’s public record. Every statement comes from a Companies House filing, a Gazette notice, the company’s website or a published press report, cited inline. The filings reviewed do not establish wrongdoing by any person. This guide does not name individuals.

What the register shows (checks 1 to 4)

The LED Studio Ltd (company number 07345642) was incorporated on 13 August 2010 and is listed at Companies House as “In Administration” (Companies House, 07345642). The Basingstoke Gazette reported on 25 April 2026 that the company’s accounts to December 2024 “list 15 employees, but do not disclose turnover or profit figures” (Basingstoke Gazette, 25 April 2026).

Three charges are registered against the company, created on 25 November 2025, 4 December 2025 and 2 February 2026 (Companies House charges, 07345642). The administrators’ Statement of Proposals (form AM03, filed 25 June 2026) says that, in late 2025, the company approached a finance provider for a credit facility and granted it a fixed and floating charge created on 25 November 2025. That is the lender’s debenture described in check 3.

The administration (check 10)

On 20 April 2026, joint administrators from Opus Restructuring LLP were appointed by a qualifying floating charge holder (The Gazette notice 5119355, 24 April 2026; Companies House form AM01, filed 6 May 2026). Trade press reported the appointment on 25 and 27 April 2026 (Invidis, 25 April 2026; Inavate, 27 April 2026).

In a statement reported by the Basingstoke Gazette on 28 April 2026, the company said the administration “relates solely to the UK entity” (Basingstoke Gazette, 28 April 2026).

The proposals record “supply-side issues due to suppliers refusing to release goods that would enable income for the Company due to large balances being owed” (AM03, 25 June 2026).

Projects, employees and who is expected to be paid (checks 5, 6 and 10)

The proposals say that, after reviewing work in progress, five projects were identified as viable for completion and contact was made with the relevant contractors. They record that “it was not possible to complete any of the identified projects”, and the remaining employees were made redundant on 27 April 2026 (AM03, 25 June 2026).

Employees are preferential creditors for qualifying claims. The proposals state: “It is anticipated that preferential creditors will be paid in full and a dividend will be paid to HMRC under their secondary preferential claim.” They also anticipate a distribution to a secured creditor “in respect of their fixed charge only” and state that “no other distributions are anticipated in this matter” (AM03, 25 June 2026). The proposals were deemed approved (form AM06, filed 8 July 2026).

Two versions of the directors’ Statement of Affairs (form AM02) were filed on 4 August 2026. Its creditor schedule includes suppliers marked as claiming retention of title and customers claiming amounts paid in advance for the supply of goods or services.

The sale of the business name and assets (check 10)

A form MR05 filed on 31 July 2026 records that part of the property subject to charge 073456420001 was released from that charge. It describes the released assets as “the ‘Sale Assets’ sold to AV Studio International Limited under invoice LED002 dated 25 June 2026 and released from the charge pursuant to a deed of release dated 6 July 2026”, comprising goodwill and intellectual property “including the UK registered trade mark number UK00004263288, the domain name ‘theledstudio.co.uk’ and other domain names, the customer database … and the business name ‘The LED Studio'”, plus chattel assets “excluding any motor vehicles and any items belonging to or subject to the rights of third parties” (MR05, filed 31 July 2026). As set out in check 10, a sale of assets by administrators is lawful and common.

The MR05 identifies the purchaser as AV Studio International Limited (company number 17164976); its Companies House record should be read directly for its incorporation and officer details. Its website stated on 2 September 2026: “We are pleased to confirm that AVSI has acquired the LED Studio brand from LED Studio Ltd, which is currently in administration” (theledstudio.com homepage, https://theledstudio.com/).

The Gazette published a rule 22.4 notice on 30 July 2026 in the terms shown in notice 5183463 concerning use of “The LED Studio” as a trading name of AV Studio International Limited. Such a notice relates to the restrictions that section 216 of the Insolvency Act 1986 would impose if a company enters insolvent liquidation; in specified circumstances involving the acquisition of all or substantially all of the business from an office-holder, notice may be given in advance while the company is in administration, and whether the exception applies depends on all statutory conditions being met. Publication of a notice is not a general permission to reuse a name, and the notice does not itself establish ownership or control of AV Studio International Limited, wrongdoing, or the transfer or avoidance of any liability.

That is the public record as at 2 September 2026. Nothing in the filings reviewed for this guide establishes wrongdoing by any person, continuity of ownership or control between the two companies, or an obligation on AV Studio International Limited to assume particular customer liabilities.

Frequently asked questions

Is it normal to pay a deposit for an LED display?

Yes. Most LED displays are built to order and suppliers pay factories in advance, so a deposit is standard. A deposit of around a third with the balance on delivery and commissioning is common. A supplier asking for most of the contract value before anything ships should be able to explain why.

How do I check if an LED display supplier is in administration?

Search the company’s exact legal name on the Companies House service at gov.uk. The overview page shows the status, and the filing history shows any notice of appointment of an administrator (form AM01). The Gazette publishes a notice of every appointment and is searchable by company name.

What does a charge on Companies House mean for me as a customer?

A registered charge records security granted over the company’s assets. A charge does not by itself establish financial distress, and Companies House does not show the amount currently outstanding under it. In an insolvency, payment priority depends on the nature of the security and the statutory waterfall, and a deposit-paying customer will commonly have an unsecured claim to the extent that no proprietary or other protection applies.

If my supplier goes into administration, will I get my deposit back?

Often not in full. A customer will commonly have an unsecured claim for an unperformed prepayment, but the position depends on the contract and facts, including any trust, proprietary right, security, set-off, card protection or other remedy. Ordinary unsecured claims rank behind several prior claims under the statutory distribution rules, although a prescribed part of qualifying floating-charge realisations may be set aside for unsecured creditors where the statutory conditions are met.

Does the new owner of a brand have to honour old warranties?

Not automatically. An asset purchase does not by itself transfer the seller’s warranty obligations; whether a buyer becomes responsible depends on the transaction documents, any valid assumption or novation, communications with the customer and the applicable law. The buyer may choose to honour them commercially. Ask the buyer in writing and ask whether the manufacturer’s own warranty on the product still applies to you directly.

About Dynamo LED Displays

Dynamo LED Displays Limited was incorporated on 6 August 2013 and is registered at Companies House under number 08640007 (Companies House, 08640007). We have offices in the UK and Dubai and design, supply and install LED video walls, tickers, outdoor and transparent displays. Our warranty terms are on our warranty page. Run every check above on us before you pay us.