What is an Administration?

• An insolvency process that provides protection of the company where there is a prospect of saving the company’s business or providing a better result for creditors than liquidation.

• The company is controlled by an Administrator (who must be a Licensed Insolvency Practitioner).

What is the purpose of an Administration?

• There are three main purposes of an Administration:

  • rescuing the company as a going concern, OR

  • achieving a better result for the company’s creditors as a whole than would be likely if the company were wound up (without first being in administration), OR

  • realising property in order to make a distribution to one or more secured or preferential creditors

How do you place a company into Administration?

• The following can apply for the appointment of an Administrator:

  • The company or its directors.

  • A holder of a qualifying floating charge (QFCH).

  • A creditor

• When applying for the appointment of an Administrator, five business days notice must be given to any QFCH of the company.  The QFCH then has the option of whether they wish to appoint their own Administrator.  This will take preference over the directors’ choice.

• Notice of the appointment of an Administrator is filed with the court with the written consent of all QFCHs and the consent of the proposed Administrator.

• The appointment of the Administrator is effective from the date and time that the above notice is filed with the court.

• There is then a full moratorium (protection for the company from action by creditors).

What are the duties of the Administrator?

• To achieve the three main purposes of Administration in order of priority.  This can include continuing to trade the company or opting for a total shut down.

• To complete an investigation into the company's affairs and submit a report to the Insolvency Service.

• To protect the interest of all creditors.