COMPANY ADMINISTRATION

An Administration Order can quickly stop pressure from creditors and be the first step towards rescuing your company.

When your business cannot pay debts that it owes, or the company’s assets cannot cover its liabilities, you can find yourself in a difficult and emotional situation. Sometimes, creditors understand and are willing to renegotiate payment terms to give you another chance to pay. However, in other situations, creditors might pressure you to pay or threaten you with legal action if you cannot settle the debt.

In these circumstances, it is important to act quickly and seek expert advice. There are several solutions that might be available in your situation, including a Company Voluntary Arrangement (CVA) that will give you more time to pay back the money you owe. Another possibility is a Company Administration Order, which can help to remove legal pressure and stop creditors from taking any action against you while you figure out what to do next.

The best way to ensure that company rescue solutions are available to you is to speak to an expert at your earliest opportunity, and this is where the team at Company Insolvency Advice can help. Thanks to our experience, we can have a frank and confidential conversation about your company’s financial position and the nature of your outstanding creditors, and advise you on the approaches you could take to restore your business to financial solvency.

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We can discuss whether an Administration Order is appropriate in your circumstances, help you to negotiate and secure creditor approval for a Company Voluntary Arrangement, or provide advice on removing significant creditor pressure to give yourself more time to plan your next steps.

For support and guidance on what happens when a company goes into administration and whether this process is right in your circumstances, get in touch with the team at Company Insolvency Advice today. Call us on 0800 999 0666 or use our online enquiry form to request a call back at your convenience.

  • WHAT IS A COMPANY ADMINISTRATION ORDER?

An Administration Order is a court order that stops anyone from taking legal or enforcement action against your company while you determine an appropriate way forward. An Administration Order can be obtained quickly and offers protection from aggressive creditors. At this stage, an administrator will be appointed to help your business determine its next steps. They can help you to find a solution that will help your business to recover and prevents legal action from creditors that could result in the company being shut down.

The Order has to be made by a court, but even the application for the Administration Order is enough to get the legal protection to stop creditors’ actions and buy you more time to make decisions about your company’s future.

Company Insolvency Advice is experienced in assisting company directors across all industry sectors. We can advise you on whether the company administration process is the right approach to resolve your company’s financial woes, or whether another solution might be more suitable in your circumstances. Contact us today to find out more about the process of putting a company into administration and the outcomes you might expect when you exit administration, including insights into the viability of recovering your business.

  • HOW DOES AN ADMINISTRATION ORDER WORK?

The key to a successful administration is a better return to creditors and lenders. At the start, you will need to go through your company’s affairs with a qualified insolvency practitioner to look at all the issues you have and discuss alternative methods of solving them.

Assuming administration is the best route, then a court application is made and immediate protection is granted. This stops any legal action against your company and lets you work with the proposed administrator to find the best route forward.

A Company Administration must achieve one of the following:

  • Rescue the company as a going concern.
  • Achieve a better result than the company being wound up.
  • Realise the value of the property to make a distribution to one or more secured, or preferential creditors.

By discussing your circumstances with us, we can offer company administration advice on whether or not this is the best available solution for your business and its creditors. We’ll also discuss the alternative approaches and work together to choose the right one. If there is a possibility of rescuing your company and paying back creditors, we can support you to apply for a Company Administration Order and work through the process together.

Once the Administration Order has been made, proposals need to be generated. The Administrator’s proposals are sent to all of the company’s creditors. When the proposals have been approved, the administration will run its course according to the Administrator’s plan. This is valuable, as it means you will know exactly what to expect before the process begins and have time to prepare for the outcome.

These could include:

  • Sale of some or all of the company assets.
  • Disposal or surrender of onerous liabilities and leases.
  • Transfer of ongoing contracts.
  • Business and operational transfers to a new company.

A similar process is the pre-pack administration, in which the sale of the company is agreed upon before it enters into formal administration. As soon as the company goes into administration, the sale is completed and the company’s business transfers to a new owner, where it can continue to operate. This not only offers business continuity but can prevent job losses and other negative outcomes. However, it is only possible in some circumstances.

Speak to the team at Company Insolvency Advice today about the possibility of a pre-pack administration and whether this is the best way to save jobs and allow your company to continue, or whether a standard administration will be the best approach to enable you to plan your next move.

  • ADVANTAGES OF ADMINISTRATION

  • Immediately stops action from creditors.
  • Gives time to work out a solution.
  • May result in the company continuing.
  • Gives a better return to creditors.
  • Allows some contracts to continue.
  • A quick response to financial challenges.
  • Can protect jobs and employment contracts.

“We can help you with your decision by looking at the details and finding the best ways to resolve your company’s financial problems. We’ve been doing this work for years, and we know which solutions will work best.”

  • HOW DOES A COMPANY ADMINISTRATION HELP YOU?

A Company Administration could be the best approach for your business if: 

  • you are under pressure from creditors and are unable to pay them.
  • you have been issued with a Winding-Up Petition.
  • your landlord is threatening to distrain and this would put an end to your business.

These are just some instances where the speed with which you can obtain an Administration Order could be vital to the future of your business. An Administration is bespoke to your company’s needs and doesn’t have to mean the end of the business.

We understand company problems and want to assist you to make sure the same issues do not arise again. If funding is the issue, we have excellent relationships with lenders who help refinance or offer alternatives to the mainstream bankers. No matter what your business needs, we can offer advice and help you to find the right solution.

  • WHAT SHOULD YOU DO NEXT?

If you think that administration could be the answer to your company’s problems, then contact Company Insolvency Advice today to discuss the options available to you. We will need to hold consultations either face-to-face or remotely to look at the structure of the current business and discuss possible outcomes and potential solutions. There may be alternatives to administration and, with our experience, we will present these options to you. We know it is your company and any major change is a big step. All our staff understand these difficult situations and will advise on the best course of action moving forward.

We can provide the company administration advice you need, on everything from the decision to go into administration and whether it is right for your business, through to the administration process itself, and what you can expect afterwards. That way, you can be sure that you’re prepared for every eventuality, and ready to make the important decisions facing you with confidence.

“We can help you with your decision by looking in detail as to the best way to get the company’s problems resolved. We’ve been doing this work for years.”

  • FAQs ABOUT COMPANY ADMINISTRATION

How does the administration process work?

The Company Administration process can unfold in different ways, but there are some typical stages it needs to follow. 

  1. Application: A Company Administration Order can be initiated by various parties, including the company directors, the company itself, or its creditors. An application is made to the court for an administration order. 
  2. Appointing an administrator: If the court grants the Administration Order, a licensed insolvency practitioner is appointed to take control of the company’s affairs as the administrator. The administrator’s primary duty is to act in the best interests of the company’s creditors as a whole. If you have been working with an insolvency practitioner for advice during the initial stages of this process, they may take on the role of administrator in these cases.
  3. Legal action ceases: Once the administration order is granted, an automatic moratorium takes effect. During this period, legal actions against the company, such as winding-up petitions and enforcement actions by creditors, are generally suspended. This provides the company with some breathing space to assess its financial situation and develop a plan for recovery.
  4. Assessment and planning: The administrator will assess the company’s financial position and develop a strategy to achieve one of the following statutory objectives:
    • Rescuing the company as a going concern.
    • Achieving a better result for the company’s creditors as a whole than immediate liquidation would.
    • Realising assets for secured creditors.

The option that will work best in this situation will depend on the specifics of your financial circumstances, but by working with an expert during this process you can forecast the potential outcomes and understand how the administration is likely to be managed.

  1. Creditor approval: If a rescue plan is proposed, it typically requires approval from the company’s creditors. If the proposal is approved by 75% of the business’ creditors (determined by the value of their debts), the plan is implemented.
  2. Exit from administration: Once the administrator has achieved the intended objective or, if not possible, when the moratorium expires, the company exits administration. This may involve returning the company to the control of its directors, entering into a Company Voluntary Arrangement or, in some cases, proceeding to liquidation if rescue efforts are unsuccessful.

Speak to the team at Company Insolvency Advice today for more information about whether administration is the right way to deal with your organisation’s financial challenges and how the process is likely to proceed.

What is a Company Voluntary Arrangement?

A CVA is one of the potential results of the administration process, and may be the result the administrator decides to aim for in order to rescue your business. It is a legal arrangement through which an insolvent company can secure a payment plan with a creditor, to pay back a debt over a longer period of time.

To secure a CVA, you must develop a payment plan by calculating how much your company can afford to pay and over what period of time. If your creditor approves the payment plan, any legal process that is already in place will cease, and your creditor will be prevented from taking any further legal action unless you fail to meet the terms of the payment plan.

Depending on the nature of your company’s creditors, its debts and its financial situation, this might be a suitable route back to solvency at the end of an administration process. The appointed administrator will make this determination by examining your business’ circumstances in detail during the administration process. For more information about CVAs, visit our page on Company Voluntary Arrangements.

  • GET IN TOUCH

If you are facing issues like those we’ve described above and you need support, don’t hesitate to get in touch with our expert team. We will offer realistic, practical advice about the future of your business and the solutions that could save it from the financial difficulties you are facing.

Call us today on 0800 999 0666 or use the enquiry form at the top of this page to request a call back at your convenience.

WHO ARE WE

Company Insolvency Advice

Company Insolvency Advice is a leading business rescue, corporate restructuring and insolvency specialists, with years of experience in providing corporate debt solutions. We understand the daily pressure you are under as a director and our team of expert consultants cover the whole of the country in order to discuss debt solutions with company directors.

NATIONWIDE COVERAGE

We cover the whole of the UK

From our office in the North West of England, we provide a national advice service to the whole of England, Scotland and Wales. We aim to offer tailored, high quality service of local business advisors, with the experience, knowledge and support of a huge, national organisation.

OUR EXPERTISE

Why clients choose us

  • Communication

Good communication holds the key to any financial advice for businesses and our remit is to provide clear and accurate debt advice.

  • Experience

Our staff have many years’ experience in dealing with ever-expanding creditor pressure and economic issues that affect companies.

  • Reputation

Company Insolvency Advice prides itself on the reputation it has built up over the years in assisting company directors resolve various financial issues.

“Extremely helpful and very professional service. Knowledgeable and very approachable. Would highly recommend!!”

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