Administration – The administration process

Your business is “in administration” when an administrator has been appointed to manage your company’s affairs, business and property for the benefit of your creditors.

The administrator is an insolvency practitioner and has the status of an officer of the court. They can be appointed by the courts (on application from a creditor, directors or partners), the holder of a qualifying floating charge over the assets of the business, or the company or its directors.

Administrator’s duties

Once appointed, your administrator must send a notice of their appointment to the company and each of its creditors and publish notice of his or her appointment in the Gazette (the official newspaper of record) and in a newspaper in the area where the company has its principal place of business.

The administrator will request a statement of the company’s affairs from relevant people, such as  company employees.

The administrator must make a statement setting out proposals for achieving the purpose of the administration (such as to rescue it as a going concern), or explaining why they cannot be achieved. This must be done within eight weeks of your company going into administration.

The statement must be sent to:

• the Registrar of Companies
• all creditors of the company
• all members of the company

The administrator must inform the Registrar once the administration process had been completed.

During the administration process

While your company is in administration, every business document issued by or on behalf of your company or the administrator must state the administrator’s details.

Ending the administration process

There are a number of ways the administration process can end.

• When the administrator’s term of office expires after one year of their appointment.
• When an administrator pointed by the court applies to the court to end it.  The administrator can do this when they think that the purpose of the administration cannot be achieved or the company should not have entered administration.
• When an administrator appointed by the holders of a floating charge, by the company or by its directors believes the the purpose of administration has been sufficiently achieved.
• When a creditor applies to the court to end it alleging an improper motive on the part of the person who appointed the administrator or applied to the court for the administration process to begin.
• When a company moves into creditors’ voluntary winding up, once the administrator thinks that each secured creditor is likely to be paid and a distribution will be made to unsecured creditors.

More information

• Administration – What is administration?
• Administration – What is a composition order?
• Administration – What is an administrative receiver?
• Administration – Voluntary and involuntary administration
• Administration – The advantages of administration
• Administration – The disadvantages of administration
• Administration – I can’t afford to make my administration payments
• Administration – The alternatives to administration
• Administration – Insolvency and administration
• www.london-gazette.co.uk

Downloads

• Administration Fact Sheet (Insolvency Helpline)