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Looking to liquidate your business? For help call 0300 303 8284
Looking to liquidate your business?
For help call 0300 303 8284

Company Administration Process

A company administration is a process whereby an Insolvency Practitioner is appointed as the administrator of a company to restructure the business with the aim of either turning it into a profitable company or effecting a sale of the business to preserve value and employment.

In order to enter administration there are circumstances that a business must meet.

1. It must be insolvent, but be able to achieve a specific statutory purpose laid down by current insolvency legislation

2. It should have significant creditor pressure, and entering into administration should be a step to prevent compulsory liquidation.

Once your business enters into administration (as with CVAs) it ensures your company is protected from compulsory liquidation or other legal recourse. It places the control of your business into the hands of the licensed Insolvency Practitioner with the objective of steering your business back in the right direction. It’s important to remember that whilst you are handing the reigns over to the Insolvency Practitioner, they have to handle all the pressure and issues from creditors during this time period.

We handle administrations for a range of businesses, and have a vast experience in restructuring businesses and returning the business back to its directors. If you feel like entering administration may be the best course of action, it’s important to seek the advice of a licensed Insolvency Practitioner.

What is a pre pack administration?

A pre pack is when the business is sold by the administrator to management or a third party purchaser either immediately upon his appointment or within a few days.

It is a useful tool when the type of business means that ongoing marketing by an administrator may damage its goodwill and value.

One of the main advantages of this administration is the permanency of the “business”, as the business is protected by the courts, giving the administrator the power to sell the business and all of its assets. It writes off the debts of the existing company with no interruption to the trading business.

If the newco turns out to be the previous directors of the business then it may often generate negative publicity, as it is often frowned upon, despite it being a legal arrangement. It’s important to remember that other options may include liquidation, whereby employees may lose jobs and the business does not continue trading.

What is administration?

A company administration is a process whereby an Insolvency Practitioner is appointed as the administrator of a company to restructure the business with the aim of either turning it into a profitable company or effecting a sale of the business to preserve value and employment.

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Pre pack administration

A pre pack is when the business is sold by the administrator to management or a third party purchaser either immediately upon his appointment or within a few days. It is a useful tool when the type of business means that ongoing marketing by an administrator may damage its goodwill and value.

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Director's Loan Accounts

Director’s Loan Accounts, otherwise known as DLAs, are a perfectly legal arrangement where Directors of a company can remove and add money from a business. Issues can arise when a business becomes insolvent and a DLA is overdrawn.

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FAQs

Find the answers to the questions you have on insolvency, administration, CVA’s and more in our FAQs. You can find the answers to common questions companies have surrounding these subjects.

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More information

What is administration?

Administration is a process where an Insolvency Practitioner is appointed as an administrator of the company. The aim in administration is to either turn the company into a profitable business or to preserve any remaining value or employment. Administration is usually the step taken before liquidation and generally occurs in a situation where there is significant creditor pressure and it must be able to achieve a specific statutory purpose as stated by current legislation. For administration advice, contact The Insolvency Experts today.

Pre-pack administration

When an Insolvency Practitioner is appointed as administrator, it is an option to sell the company and its assets to management or a third-party buyer. This is called a Pre-Pack Administration and allows the business to write off current debts and continue trading. Other options to look at are liquidation but this could the see company cease trading and jobs could be lost. For more information on Pre-Pack Administration, get in touch The Insolvency Experts today and we can provide help and advice for your business.

Director's loan accounts

Director’s Loan Accounts, otherwise known as DLAs, are a perfectly legal arrangement where Directors of a company can remove and add money from a business. Issues can arise when a business becomes insolvent and a DLA is overdrawn. This can be seen as recoverable debt and it will need to be repaid to make payments to creditors. For more information or professional help and advice on DLAs and what they mean for your company, get in touch on with The Insolvency Experts today.

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Administration
michael beal