Company Administration

Administration is a very powerful process where a company is insolvent and facing serious threats from creditors. The shareholders, directors or bank may appoint a licensed insolvency practitioner as Administrator.

This places a moratorium around the company and stops all legal actions whilst administration paperwork is filed at court – a court hearing is not always required.

In limited circumstances, where a petition to wind up the company has already been issued, a court application will be necessary and it will be for the judge to decide whether the company should go into administration and to appoint the administrator. This is why we advise that it is always best to seek advice on a company’s affairs at an early stage.
Administrations were introduced by the government as a mechanism to promote the rescue, survival and continuation of businesses.

However, the administration must have a purpose i.e. the company proposes a restructuring plan or it continues trading in administration with a view to selling the business and its assets.

Alternatively, a sale may be completed upon entering into administration or shortly thereafter – this is often referred to as a pre-pack administration.