A company administration is an insolvency process which provides protection for a company, preventing its creditors from continuing or starting legal action against it for outstanding payments while the business is assessed and a restructuring plan put into place to give the best return to stakeholders. The process requires a licensed insolvency practitioner to act as the administrator.
A company can be placed into administration by either the company director(s), or a floating charge holder, such as a bank, if they have registered a floating charge at Companies House.
The administrator’s objectives are, in this order to:
- Rescue the company as a going concern; or
- If a rescue is not reasonably practicable, achieving a better result for the company’s creditors than they would achieve in a liquidation; or
- Realising property in order to make a distribution to one or more secured of preferential creditors. This objective can only be pursued where it is not reasonably practicable to achieve either objective 1 or 2.
Once appointed, the administrator will manage the company’s affairs, business and property submitting regular reports to all parties.
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If your company is experiencing creditor pressure and financial difficulties, and you would like to understand the administration process in greater detail, please call our head office on 01992 392030 to speak confidentially with one of our directors or email firstname.lastname@example.org