Understanding the Administration Process

Administration is one of the options available to insolvent companies who have a potentially viable future. This process protects limited companies and partnerships from legal action being taken against them, without approval from the courts or the administrator.

To begin with, a licensed insolvency practitioner is appointed as administrator to the company. This appointment may be by:

  • Any creditor
  • The holder of a Qualifying Floating Charge (or QFC), such as the Bank
  • The company itself

Before being appointed as an administrator, an insolvency practitioner must ensure that they will be able to rescue the company as a going concern or achieve a better result for the company’s creditors than the business being wound up. If company survival is simply not possible, the administrator will look to sell the company’s assets in order to make a distribution to one or more secured or preferential creditors.

Pre Pack Administration

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Pre Pack Administration

Pre pack administration is when a buyer for the company is found prior to the business being placed in administration. The purpose of pre-pack administration is to guarantee that trade continues by moving contracts and employees to the purchasing company. In many cases, this is considered to be the best way to save the business as a going concern.

A pre pack of a business can be to anyone, however, it is often the existing management team/directors. They are usually best placed to acquire the business through this process as they are able to move smoothly through the due diligence process. Any new interested party would need to get under the skin of the business, in order to understand potential pitfalls (caveat emptor).

Is administration right for my company?

Whilst administration is a powerful tool that can be utilised to save a company, whether it is the best option for your company will ultimately depend on its own circumstances. Understanding the key elements of your business and the pressures it is under is essential in the decision making process.

The key to any insolvency process is to engage with someone like My Insolvency at the earliest stage possible so you can take full advantage of all the options open to you. Here at My Insolvency, we pride ourselves on giving you honest advice and will always provide you with the options that are best suited to your company’s individual circumstances.

If you would like to know more about administration and whether it is right for you, speak to one of our specialist team on 0800 009 6106 or

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