Administration is a key insolvency tool to implement the rescue of a business and provides immediate protection from creditors.
Advantages Of Administration
- Creditor Protection
Keeps all creditors at bay whilst a strategy is formulated for the future of the company.
- Re-focus on trading, not creditors.
Stops demands from creditors so you no longer have to deal with creditor’s letters and phone calls.
- Gives Directors more options
Directors or third parties can have an opportunity to restructure the business as a going concern.
- Affordable solution
Costs are taken from the available assets in the company.
Administration offers vital breathing space and full legal protection from all creditors whilst a business recovery or restructuring package is formulated.
Can I Enter My Business Into Administration?
You can put your company or limited liability partnership (LLP) into administration if it’s in debt and can’t pay the money it owes.
You’ll be protected from legal action by creditors so nobody can apply to wind up your company during administration.
How Do I Enter Into Administration?
You must appoint an administrator – who must be a licensed insolvency practitioner. This is the service we offer.
During administration ultimate control of your company and everything it owns is vested in your administrator.
How Administration Works
The administrator informs your creditors and Companies House that they’ve been appointed.
In the first instance, they will try to stop your company being liquidated if that is an immediate threat.
Then, the administrator has 8 weeks to formulate a statement explaining what they plan to do. During this time the company can continue to trade without pressure from creditors.
The administrator must send this proposal to creditors, employees and Companies House and invite creditors to approve or amend the plans at a meeting.
What Could The Administrator Decide To Do?
The administrator could decide to:
- Negotiate a Company Voluntary Arrangement (CVA) so your company can keep trading.
- Sell your business as a ‘going concern’ to another company – meaning your business can carry on, eg by keeping its clients, workforce or orders.
- Sell your assets as part of a Creditors’ Voluntary Liquidation, pay your creditors from any money raised and close your company
- Close your company if there is nothing to sell
We can help you decide if administration is right for your business.