If a company is insolvent and under immediate threat of action from one or more creditors, the company can be placed into administration in order to gain immediate protection. Once the company is in administration, no further legal action can taken by creditors.
If you need help with your administration please contact us using our online form or alternatively you can call us now on 0844 704 8907.
The Process of Company Administration
Upon the appointment, the administrator must look to achieve one of the following objectives:
- Rescuing the company as a going concern;
- 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 company administration)
- Realising property in order to make a distribution to one or more secured or preferential creditors
The administrator can do this using one or more of the following options:
- Continue to trade the company whilst negotiating a sale of the business as a whole or in part
- Continue to trade the company whilst presenting proposals for a Company Voluntary Arrangement
- Immediate sale of the business as a whole (also known as a Pre-Packaged Administration – see below)
- Termination of trade and sale of the company's assets
Prepack administration occurs when a proposed administrator agrees a sale of the company's assets as a whole prior to appointment and subsequently completes the sale immediately upon appointment.
Prepack administration can often be the most appropriate course of action where any interruption to trade would result in significant reduction of a company's asset values, particularly items such as goodwill and work in progress which depend on continuous client service.
If you require honest advice on administration please do not hesitate to get in touch with us today. You can either fill out our online contact form or call us now on 0844 704 8907. We look forward to hearing from you.