Stephensons of Easingwold told North Yorkshire County Council on Friday afternoon that it would be unable to operate its county council contracts from Monday.
The company operated both school and local bus services under contract to the council, as well as providing a commercial bus network.
Council officers worked over the weekend to ensure there are replacement bus services for 900 pupils entitled to free school transport in the Ryedale, Harrogate and Hambleton districts.
However half a dozen local bus services in the Thirsk and Malton area - 60, 60A, 59, 194, 181 and 190 - which are subsidised by the council will not be in operation “for the foreseeable future”, the council has warned.
Public transport operator Transdev has announced its Coastliner service will take over operation of the 29 and 31x services from Easingwold and Helmsley to York, running to the same timetable.
County councillor Don Mackenzie said they had pulled out the stops to make sure all 27 school contracts were covered.
He said staff were aware of the impact the sudden loss of bus services would have, adding: “We are doing all we can to minimise disruption and to restore services as swiftly as possible.”