An Administration is where a Licensed Insolvency Practitioner is appointed as Administrator of a company to manage its affairs, business and property. The company, the directors, its creditors or a qualifying floating charge holder (usually a bank with a debenture over the company’s assets) can make the appointment. The commencement of the Administration process triggers a moratorium, which gives legal protection to the company from the threat of creditor actions. Control of running the company passes from the directors to the Administrator. The Administrator has a duty to investigate the causes of the company’s failure and issue a report on directors conduct to the Insolvency Service.
Administration may be suitable when some or all of the following apply:
- There is an immediate threat of a creditor winding up petition, a bailiff seizing the company’s assets or a landlord threatening to re-enter premises under Commercial Rent Arrears legislation
- The company is struggling to pay its debts as and when they fall due
- There is a valuable business and/or assets to protect and obtain value from
- There is an opportunity to rescue the company or at least save the business
In many cases, Administration can be commenced very quickly by filing documents in court. In some cases it may be necessary to apply to court to effect the Administrator’s appointment. Administration can be complex. Contact us to find out more.