Company Administration
Explore whether a formal administration process could provide a route to rescue or a better outcome for creditors.
What administration involves
Administration places a company under the control of an appointed insolvency practitioner. It is a formal procedure with statutory objectives and restrictions on certain creditor actions. It should be assessed against the company’s circumstances, rather than treated as a routine way to pause debts.
Further reading: GOV.UK guidance on company administration.
An administrator may continue trading, seek a sale or consider restructuring, depending on what can be achieved. Administration does not guarantee that the company itself survives, that all jobs are retained or that creditors are paid in full.
When to seek advice
Seek advice when the company is facing serious creditor pressure, a funding withdrawal or a cash shortage that threatens trading. A petition, charge over assets or threatened enforcement can change the available routes and needs immediate attention.
Prepare management accounts, a cash-flow forecast, details of secured borrowing and asset ownership, employee information and a list of major contracts. The cost of trading and funding the process must be understood before a plan can be considered viable.
Understand the practical consequences
Directors should be clear about the change in control, the administrator’s role, possible employee implications and how customers and suppliers will be informed. Any proposed sale, including a connected-party transaction, needs proper professional handling. Legal advice may also be needed where proceedings or security rights are involved.
Start with the facts
Bring a current picture of debts, assets, cash flow and any creditor deadlines.
- Latest accounts and bank balances
- HMRC and supplier arrears
- Court papers or enforcement notices
- A short cash-flow forecast
Questions about your options
An administrator takes control of the company. The directors’ ability to act is restricted and must be discussed with the appointed practitioner.
No. Administration has different statutory objectives. Liquidation generally deals with winding up the company’s affairs.
A sale as a going concern is one possible outcome. The administrator assesses the statutory objectives and the company’s circumstances; administration does not guarantee that the business will be saved.
The administrator’s fees are paid from the company’s resources, subject to the applicable rules. Ask about the basis of fees, funding requirements and likely costs before an appointment.
Let’s talk about your next step
Tell us what is happening. We will help you understand the information needed to assess your options.