Placing a company into Administration protects insolvent companies from their creditors while a restructuring plan is proposed and implemented. The process is for companies which are still viable and looking for a legal stay against any creditors currently taking, or considering taking action against the company.

You may have heard the term pre pack administrations, the main difference between Administration and Pre Pack Administration is that the sale of the business is agreed before the company enters Administration and the sale completes immediately upon the Administration order.

Frequently Asked Questions

When placing the company into Administration there must be one of the three objectives achieved:

  • Rescue the company as a going concern;
  • Achieve a better realisation than would be in the winding up of the company, or
  • Make a distribution to secured and / or preferential creditors.

It should be noted that rescuing the company is always the primary objective and a better realisation than would be in the winding up of the company is the secondary objective.

The company can be placed into Administration in three ways; a faxed application to the court by the company or director, using a court order if the company is already in liquidation or in a CVA, or finally the bank or secured lender appointing administrators if they hold a Qualifying Floating Charge (QFC).

The route to be taken depends on many factors, such as whether or not a winding up petition has been served. In those circumstances a court based procedure will be needed.

Once the order is made an Administrator will be appointed to take over the day to day running of the company. They will decide whether or not it is possible to continue trading the company or if the business can be sold as a going concern.

The appointed Administrator will notify all known creditors as soon as it is reasonably practical for them to be notified.

Within 8 weeks of their appointment they are required to send a report to known creditors outlining their proposals. This will include the objectives that the Administrators believe are possible and how they will be achieved.

A Pre Pack Administration would be beneficial where the company is at threat of a winding up petition being served on the company, or other factors which will provide a threat to the trading.

A sale of the company is agreed pre administration and completed on the making of the administration order. Creditors are then notified post sale of the details.

We understand that each business is as individual as the people running the company and we will work with you to ensure that your business has the best chance of survival.

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