Business Receivership Services for UK Businesses
Administrative Receivers can only be appointed by the holders of a fixed and floating charge over a company dated prior to 15 September 2003.
Fixed charge receivers can be appointed over specific assets subject to a fixed charge, such as book debts.
A Law of Property Act Receiver (LPA Receiver) can be appointed over any property assets subject to a fixed charge.
Court Appointed Receiver – a court can appoint a receiver to a company.
Why would a company go into Receivership?
Lenders may choose to put a company into administrative receivership either because there is a tax advantage to using this process or alternatively where they wish to appoint someone who only has a duty of care to them.
In appropriate circumstances a court may appoint a receiver to take control and/or realise assets as part of a remedy for a judgement.
Appointment Processes
Contact Us
We are happy to offer you an initial free consultation that can be done remotely on a video or telephone call.
Give us a call on 0113 242 0808 or e-mail advice@chamberlain-co.co.uk
Advantages of a Receivership
An Administrative Receiver only has a duty of care to the lender and typically consults with them on the strategy and execution of the appointment.
The appointment of an Administrative Receiver does not start a new tax period and any tax liabilities relating to realisations remain as a claim against the company.
Disadvantages of a Receivership
If the directors do not invite the appointment of an Administrative Receiver and there is a defect in either the documentation or appointment process, the lender and the Administrative Receiver could be liable to trespass claims.
Often an Administrative Receivership results in a company being placed into liquidation and is not seen as a rescue process.
Receivership FAQs
What’s the difference between receivership and administration?
An Administrative Receiver’s duties are to the appointing secured lender. However an Administrator has duties to all creditors.
There is no statutory moratorium in an Administrative Receivership unlike when a company enters Administration. This means that there is no protection from creditor action in Administrative Receivership such as landlords forfeiting a lease or for asset finance lenders or ROT creditors taking back their assets.
An Administrator has a statutory power to pursue claims for wrongful and fraudulent trading whereas an Administrative Receiver does not.
An Administrator can be appointed by the directors, the company or a creditor, whereas an Administrative Receiver can only be appointed by a secured lender.
The appointment of an Administrator creates a new tax accounting period whereas the appointment of an Administrative Receiver does not which may be tax disadvantageous.
The fees in an Administrative Receivership are agreed by the lender whereas in an Administration the fixed charge costs are agreed by the lender with all other costs being agreed by the relevant creditors.
