When a company is insolvent and facing serious threats from Creditors it may enter into Administration. Licensed insolvency Practitioners are appointed by either the company, the Directors, or by a direct application to the Court. During this process the company is protected from Creditor’s taking any enforcement action.

What is Administration?

Administration is a process available to insolvent companies in order to provide protection from its Creditors, whilst a plan outlining how to restructure or sell its business and assets is formulated. Protection from Creditors is particularly useful and necessary in a situation whereby a company is being proactively or aggressively pursued for payment of a debt from one or more of its Creditors. A common reason for a company to enter Administration is if Creditors are threatening or have issued a Winding up Petition, or is otherwise being pursued aggressively through the Courts by Creditors. Once placed into Administration, the Administrator of a company must carry out their duties with the objective of:

  • Rescuing the Company as a going concern.
  • Achieving a better result for the company Creditors as a whole than would be likely if the company were wound up or...
  • Realising property in order to make a distribution to one or more secured or preferential Creditors.
  • Tidying up of tax affairs for a singular or group of companies.
  • The reorganisation of a group of companies after a merger, or if there is a need to increase efficiency.
  • More than one MVL may be required, but your insolvency practitioner can advise on this.

Members Voluntary Liquidation is generally available to companies meeting the following requirements:

  • The Directors and/or Shareholders want a greater degree of certainty and comfort regarding ongoing liabilities than a striking off can give.
  • The Shareholders wish to remove their investment from the company.
  • The Directors of the company wish to retire.
  • The company is no longer profitable, but it is possible for the business to cease whilst still ensuring a surplus to the Shareholders.


We offer all our customers a complimentary initial meeting to establish what options may be available to mitigate your situation.
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Advantages of Administration

Administration is a highly useful procedure for company directors and Insolvency Practitioners that can, if required, ensure the survival of a business.

Some of the particular benefits of the process are:

  • Entering Administration brings a halt to any legal proceedings being brought against a company.
  • The financial position of a company is prevented from further decline. This not only gives protection for the core business but also reduces the risk of Directors opening themselves up to a potential wrongful trading action.
  • The Administrator is duty-bound to work for the benefit of all Creditors (including unsecured) positions. This is where Administration differs from an Administrative Receivership where the Receivers need only answer to the charge holder who instructed them.
  • The company can be restructured, giving the Administrator the opportunity to dispose of non-profitable parts of the business and sell the parts of the company that have value. Therefore, the business may continue trading and maintain employment for the employees. If it is necessary to make staff redundant to ensure the commercial viability of the company, any associated redundancy costs will be paid for by the Government, subject to TUPE conditions.
  • If the current Directors do not want to continue with the responsibility, new Directors can be appointed to manage the company by the Administrators, although this is unusual