Director information hub: Administration
If your limited company is struggling, it may be possible to go into administration.
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Administration
Administration protects a company from legal action and allows proposals to be put to creditors to re-structure the company.
An appointed administrator (a professional insolvency practitioner) will run the business for as long as they are appointed (normally 1 year, but this can be extended).
The insolvency practitioner will determine the best course of action for your company. This may be:
- negotiating a Company Voluntary Arrangement with creditors
- selling all the business or part of the business as a ‘going concern’
- selling the company assets and then closing the company
Administration will not be a suitable for every company in financial difficulty.
More about administration
To go into administration, you need to appoint an insolvency practitioner as administrator who will oversee the process.
If a creditor holds a floating charge over the assets of the company they can also appoint an administrator.
The administrator will:
- file notice of the administration with the court
- write to creditors
- publicly announce their appointment in The Gazette
The administrator has 8 weeks to provide a statement outlining their proposals to achieve the best return for creditors and must send a copy of this to creditors, employees and Companies House.