Administration (ADM)

You can put your company or limited liability partnership (LLP) into Administration if it’s in debt and cannot pay the money it owes. Administration is a useful procedure for companies which appear to be viable (at least in part) as a going concern; it is used as a rescue tool for insolvent businesses, allowing continued trading with a view of selling the business and/or its assets as well as potentially saving jobs.

In the period leading up to Administration, you will be automatically protected from legal action by people or organisations who are owed money (‘creditors’) and nobody can apply to wind up your company during Administration. This is known as a moratorium.

Administration can mean your company does not have to pay all its debts in full – but your company can still be wound up. There are other options for handling your company’s debts – we can advise you if you are not sure Administration is suitable for your company.

A ‘pre-pack’ Administration is where a purchaser is found for the business and/or its assets prior to the Administration and a sale of business is effected immediately upon, or shortly after, the appointment of an Administrator.

The Administrator  must be a licensed ‘Insolvency Practitioner’.

Entering into Administration can be done very quickly. The appointment of an Administrator can be made by the Court, a qualifying floating chargeholder, the directors, the company or by one or more creditors.

The Administration usually lasts for a maximum of 12 months and is followed by an exit strategy (usually liquidation, dissolution or voluntary arrangement). A company may enter into Administration with the aim of:

  1. rescuing the company as a going concern; or
  2. achieving a better result for the company’s creditors as a whole than it would be likely if the company was wound up (without first being in Administration); or
  3. realising property in order to make a distribution to one or more secured or preferential creditors.

During Administration you must hand over control of your company and everything it owns (its ‘assets’) to your Administrator. The Administrator’s fees are paid by your company.

The Administrator will write to your creditors and Companies House to state that he has been appointed and will also publish a notice of their appointment in The London Gazette.

The Administrator will try to stop your company being wound up (‘liquidated’). Failing which he will try to pay as much of your company’s debts as possible from the company’s assets. The Administrator has 8 weeks to write a statement explaining what the Administration can achieve. A copy of the Administrator’s proposals must be sent to creditors, employees and Companies House and inviting them to approve or amend the plans at a meeting.

The Administrator could decide to:

For as long as the company is in Administration the Administrator will run your business.

The administrator has control over your business during the Administration and can cancel or renegotiate any contracts you have or make employees redundant.

Your company’s Administration will end when either:

The company will not have protection against any legal action your creditors take once the Administration has ended.

Saud & Co can help you with professional advice in order to make a viable Administration proposal. Saud & Co will assist you in the drafting of all necessary documents and will deal with all your creditors.

Call us now on the following number to discuss your options:

0208 304 0609 – Bexleyheath

0208 301 5466 – Beckenham

0207 387 7760 – Cockfosters

Saud & Co, Registered office: 21 Highfield Road, Dartford, Kent DA1 2JS
Tel 0208 304 0609 - Fax 0700 608 8816
Saud & Co is a trading name of Saud & Company Limited.
Company Registration Number 08402929 – VAT registration 726 1719 34
Authorised by the Insolvency Practitioners Association to act as Licensed Insolvency Practitioners in the UK