Administration Order
The administration procedure was reformed as a result of changes in
insolvency legislation introduced by the Enterprise Act 2002. These
reforms were designed to make administration easier to access and more
efficient, making it the primary process for business rescue.
The administration procedure is an alternative to receivership or
liquidation with its primary purpose being the survival of the Company or of
part of its operation as a going concern. This may be by way of a sale or
by the Company entering into a Company Voluntary Arrangement.
Whilst in administration, the affairs of the Company are managed by a
licensed Insolvency Practitioner.
An administrator can be appointed out of Court by the holder of a
qualifying floating charge or by the Company or its directors.
An administrator can also be appointed by the Court on the application of
the Company, its directors or one or more creditors.
The objective of administration is:
- Rescuing the Company as a going concern, or
- Achieving a better result for the Company's creditors as a whole than
would be likely if the Company were wound up, or
- Realising the assets of the Company in order to make a distribution to one
or more secured creditors.
The administration procedure can provide protection against agressive
creditor action. Whilst in administration, and without the consent of the
administrator or the permission of the Court:
- No resolution may be passed for the winding up of the Company.
- No steps may be taken to repossess goods in the Company's possession under
a hire purchase agreement.
- A landlord may not exercise a right of forfeiture by peaceable re-entry in
relation to premises let to the Company.
- No legal process may be instituted or continued against the Company or
property of the Company.
- An administrative receiver may not be appointed.
Call us on 0800 195 4585 for advice regarding
administrations.
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