Company Administration Quote

How much would Administration cost your business?

Try our calculator to find out…

Launch Calculator

Table of Contents

 

What Happens When a Company Goes into Administration?

The process that occurs when a company goes into Administration is a question that we discuss frequently as we help provide our clients with all of the key information they need as they consider the possibility of entering Administration. Should you be the owner or director of a business that is going through some tough times and may have to enter Administration, the team here at The Insolvency Experts can help.

The Company Administration process can be a tough and intimidating one for the directors of a company, but it can be the saving grace and help provide a recovery route when conducted in the correct manner. Working with a professional Insolvency Practitioner will help you to look at the whole scenario through different eyes, and not just as a punishment for your business suffering financially. A company going into Administration allows it to undergo restructuring or to be sold as a going concern.

Let us take a look at the finer details of a company going into Administration, the processes undertaken and what is expected of the directors of said company.

Back to table of contents

How does a Company Administration start?

When a company enters Administration, an appointed Administrator is handed all controls. This Administrator has to be a licensed insolvency practitioner and will either be appointed by the company itself, its secured creditor, or appointed by court order, depending on the stage and state of the company.

The Administrator has one primary goal, to act in the best interests of the creditors of the company. The creditors are owed money, and all company assets will be assessed and realised (wherever possible and applicable) in order to release cash that can be used to repay the creditors of the company.

The Administration process runs in a way that the Administrator is given an 8-week time period in which to send formal administrative proposals to all creditors of the insolvent company. This will include a basic plan of action that the Administrator plans to take in order to repay debts. During this period, creditors will be updated on a regular basis with regards to the current status of the company and the anticipated outcome at the end of the current Administration process.

Back to table of contents

What are the Options for a Company Going into Administration?

At this point in proceedings it is worth asking what happens when a company goes into Administration? There are a number of options available. These include:

Sale as a ‘Going Concern’ – This provides the option of the business being sold as a going concern if the circumstances allow for it. The business will either be placed for sale on the open market, or sold in the form of a ‘pre-packaged’ sale, which involves the marketing of the business prior to Administrators being appointed. A pre-pack sale allows for a quick sale, to minimise loss of trade in the process and maximise the sales value achieved.

Company Voluntary Arrangement (CVA) – A CVA (Company Voluntary Arrangement), can be chosen by the Administrator, if it is thought that the company is viable as a long-term entity. An approved CVA would allow the business to exit Administration, with the Administrator becoming the Supervisor of a CVA.

This is often an appropriate solution if the company requires a restructuring plan to be implemented, with a view to returning to profitability. A CVA involves a monthly repayment of a single amount direct to the Supervisor. This sum is then distributed to each creditor as agreed within the CVA. A CVA allows greater protection for a company as it attempts to recover financially, with the directors seeking to gain control of the company once more when the Administration period comes to an end.

Back to table of contents

When Does the Administration Period End?

Each case is unique, but it is clear that Administration ends when the purpose of it has been achieved. An appointed Insolvency Practitioner is required to act in the best interests of creditors at all times. The period of Administration automatically ends after a 12-month period but this can be extended if more time is needed to finalise asset realisation and achieve the statutory purpose and finalise all Company Administration matters.

What happens when a business goes into Administration? As you can see, there are several potential outcomes. It is a crucial stage of any business to be placed into Administration and having the correct support on your side is vital. The Insolvency Experts have the specialist knowledge that can make all the difference to both the directors of a company, and its creditors.

We can offer your business advice and guidance at a time when you need it most, aiming to give you much greater control over a situation that might have seemed completely out of control in recent times. We’ll make everything clear, with a pathway to the best outcome for your creditors put in front of you after initial discussions.

Get in touch with our team by calling 0300 303 8284, emailing us to find out more about the range of financial services we can offer, or requesting a quote via the button below.

Back to table of contents

Company Administration Quote

How much would Administration cost your business?

Try our calculator to find out…

Launch Calculator

How we’ve helped others through
rescuing their business

At the Insolvency Experts our sole aim is to rescue, recover and renew businesses that are in difficulty. We are specialists in corporate turnaround and help business overcome cash flow difficulties and other financial problems. Our experts:

  • Help you to take the appropriate steps to meet any impending deadlines
  • Have a long track record in helping companies in similar positions
  • Can help you take the best course of action, often using your assets to help you avoid additional cost

Get a Quote or Get Free Advice

Creditors’ Guide To Fees

How much will it cost to liquidate your business?

Download our free quide to find out…

Download

Why Choose Us?

We understand you have already made every effort to avoid insolvency and day to day life is stressful at the moment. We can start immediately and quickly work with you through the process.

We see many examples of great businesses that have fallen on hard times or suffered through no fault of their own.

We understand that the company directors and shareholders have already tried valiantly to carry on trading, but circumstances dictate that this is no longer possible.

  • We Remove Stress
  • We Act Quickly
  • We Are Cost Effective
  • We Are Formally Accredited
  • We Are CVL Experts
  • We Act Confidentially

Get Free Confidential Advice Now

Get Free, Confidential Advice

0300 303 8284

Request a Callback

For instant, impartial advice request a callback that’s convenient to you

Request a Callback

Request a Meeting

We come to you…

Nationwide Office Visit

We can come to your office at a date and time that’s convenient to you

Request a Meeting

Latest News

Do the promising Q2 Insolvency statistics in the UK tell the full story?

The Insolvency Service have released their most recent set of quarterly statistics covering April to June of this year, which make for

Read more

Could a Company Voluntary Arrangement be the best option for a business facing financial distress during COVID-19?

With the continuing crisis brought on by COVID-19, many companies across the UK are facing an unprecedented set of financial challenges. Many

Read more

Why business cash flow is more important than ever

Cash flow is at the heart of any healthy business. A strong case could be made that with the challenges facing companies

Read more