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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. The defining features of administration include:

  • Objective: The objective of a business entering administration is to rescue it by restructuring the business to help it return to profitability, ultimately to avoid insolvency.
  • Trading position: The company is currently experiencing cash flow problems, however the underlying business is viable and insolvency could be avoided.
  • Interests served: When the company enters into an administration, the insolvency practitioner is working for the company but must consider the creditors’ interests as well.
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By quickly taking back control we can help you solve the problems that the business has.

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Administration rates across all industry sectors in England and Wales rose by 2% during 2017.

Three Key Questions on What is Administration


What are the criteria for a company going into administration?

As we guide clients through the question of what is company administration, and the benefits it can offer them, we make them aware that in order to enter administration, there are circumstances that a business must meet:

  • The company must be insolvent, but still be able to achieve a specific statutory purpose laid down by current insolvency legislation.
  • It should have significant creditor pressure,so that the act of entering into administration should be a step to prevent compulsory liquidation.

 

What protection is offered by entering administration?

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.

 

How do I find the right help with my administration process?

You can contact us here at The Insolvency Experts today. 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. Contact us online for more information regarding the administration process or call The Insolvency Experts directly on 0300 303 8284. For companies in administration, we have a range of advice and services – just click below.

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