Administration

What is Administration?

If your company is insolvent or close to insolvency, you may have the choice of putting it into Administration. The process gives you time and space to achieve one of the following -

• Find a more favourable outcome for creditors than if you were to wind up the company
• Realise the assets to be distributed to preferential or secured creditors
• To rescue your company as a going concern - usually that will mean finding a buyer

Administration is also an option for partnerships. Read more about Partnership Administration.

How do we approach our role?

We begin by advising you and your fellow directors as to whether administration is a viable option. We’ll act as administrators and, with solicitors, arrange to place your company into administration.

We’ll then act as the Administrator, giving your company protection against creditors.

Within eight weeks of our appointment, we send our proposals to the creditors. They, in turn, will choose to approve, modify, or reject these proposals.

How does an Administration come to an end?

In one of the following ways

• Automatically after one year, although this can be extended, provided the creditors or the court agree that more time is justified.
• If the administrator or the court that made the appointment believes that the purpose of administration cannot be achieved.
• Returning the company to the control of the directors
• The company goes into liquidation
• The company is dissolved (if there are no funds for distribution to unsecured creditors);
• In the case where there is a voluntary arrangement in place, the arrangement can continue according to its terms.

Administration is not always an option.

Often, by the time a director reaches out to us, administration is not an option because the financial situation has reached a critical point.

There are times when insolvency will be the best, or only, course of action.