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What is Administration?

If you have cashflow problems or your company is being pressured into administration, get advice from an insolvency practitioner as soon as possible. The sooner you act, the greater the range of options available to you. Contact us today.

Sometimes a good business may be struggling financially.  If your company or limited liability partnership (LLP) is in debt and can’t pay the money it owes, administration is an alternative to liquidation and can be a way to save a viable business.

Going into administration gives you breathing space to reorganise the business to allow it to trade out of administration or to allow for the sale of the business to be completed.

The administration must either:
  1. Rescue the company as a going concern;
  2. Achieve a better result for creditors than liquidation; or,
  3. Realise property to make a return to secured or preferential creditors

What are the benefits of going into administration?

The advantage of going into administration is that creditors can’t take legal action or apply to wind up your company while an attempt to sell or rescue the company is being made.  Administration can also mean your company doesn’t have to pay all its debts in full.

Once in administration a company can continue to trade, but daily management and control passes from the directors to the appointed administrator.

How do you put a company into administration?

Administration must be agreed by a majority of unsecured creditors (no agreement by shareholders is needed).

You must appoint an administrator, who must be an insolvency practitioner.  The administrator’s fees will need to be paid by the company.

What happens when a company is put into administration?

Going into administration means that the direct running of the business and control of its assets are temporarily transferred to your administrator. They will be able to cancel or negotiate contracts or make employees redundant.

The administrator will control your business for as long as the company is in administration.

The administrator will try to stop your company being wound up (liquidated).  If the company cannot be saved, the administrator will work to achieve a better return for creditors than would be likely if the company were simply wound up.  For example, the company could continue to trade for a while looking for a sale of the business or business assets.

Administration ends when the administrator decides the purpose of administration has been achieved – for example if a Company Voluntary Arrangement (CVA) has been agreed with creditors.

How Moore can help

Our experienced insolvency practitioners will work with you to understand your current situation and will explain your options. Our goal is always to save the business where possible. If administration is the best solution for your business, we can act as administrator on your behalf.

Make an enquiry

If your company is experiencing financial difficulties, getting in touch with an Insolvency Practitioner as soon as you can.  Our expert team will explain the options available and identify the right solution for you.