What Is Company Administration?
In this video, we explain what company administration is, how the process works, and when it may be considered by directors of a struggling business.
Company administration is a formal insolvency process designed to protect a company from creditor action while an administrator assesses the available options. This may include restructuring the business, selling assets, or exploring a sale of the company as a going concern.
Administration is not suitable for every company, but in the right circumstances it can provide breathing space and help achieve a better outcome than immediate liquidation.
When might company administration be used?
Company administration may be considered where a business is under pressure from creditors but there is still value to protect.
This could include situations where the company has viable parts of the business, valuable assets, employees, contracts, or a potential route to sale or restructuring.
Once a company enters administration, a licensed insolvency practitioner is appointed as administrator. Their role is to act in the interests of creditors and seek the best achievable outcome.
Need advice on company administration?
If your company is under creditor pressure and you are unsure whether administration, restructuring or liquidation is the right route, it is important to take advice early.
