What is Company Administration?

Company administration is a formal insolvency procedure that places a business under the control of a licensed insolvency practitioner, known as the administrator. The process provides the company with a moratorium, preventing legal action from creditors while a strategy is developed to achieve the best outcome for creditors and, where possible, rescue the business.

An administration can be used to:

  • Restructure and continue trading
  • Sell the company as a going concern
  • Maximise asset realisation for creditors
  • Enter into a Company Voluntary Arrangement (CVA)

The Administration Process

Appointment of an Administrator

The administrator is appointed by the company’s directors, shareholders, or a secured creditor holding a qualifying floating charge.

Moratorium Begins

Once appointed, creditors cannot take legal action against the company without court consent.

Assessment of the Business

The administrator will review the company’s financial position and determine the best course of action.

Strategy Implementation

Depending on the company’s viability, the administrator may seek to restructure, sell the business, or close it down in an orderly manner.

Exit from Administration

The company may exit administration via a CVA, sale, liquidation, or dissolution.

The Role of Directors in Administration

Directors remain in place during administration but their control is transferred to the administrator. However, they play a vital role in providing financial records, operational insights, and assisting with any potential restructuring or sale. Directors must continue to act in the best interests of creditors and cooperate fully with the administrator.

What Are the Benefits of Administration?

  • Immediate protection from creditor legal action
  • A structured approach to rescue or wind down the business
  • Potential for continued trading under a new structure
  • A more controlled process for asset realisation

Is Administration the Right Solution for Your Business?

Administration is not the only option available to distressed businesses. Other insolvency procedures such as a Creditors’ Voluntary Liquidation (CVL) or a Company Voluntary Arrangement (CVA) may be more suitable, depending on the circumstances.

At DCA Business Recovery, we provide expert, tailored advice to help directors understand their options. Contact us today to discuss your situation confidentially and explore the best way forward for your business.

Further Guidance

For additional support, explore our FAQs for quick answers to common questions about administration. You can also download our PDF guides for detailed, practical advice. These resources are designed to help you make informed decisions and navigate challenging situations with confidence.

Guides

Download PDF guides with clear, practical advice on managing administration, compliance, and recovery processes.

Frequently Asked Questions

When placing the company into Administration there must be one of the three objectives achieved:

  • Rescue the company as a going concern;
  • Achieve a better realisation than would be in the winding up of the company, or
  • Make a distribution to secured and / or preferential creditors.

It should be noted that rescuing the company is always the primary objective and a better realisation than would be in the winding up of the company is the secondary objective.

The company can be placed into Administration in three ways; a faxed application to the court by the company or director, using a court order if the company is already in liquidation or in a CVA, or finally the bank or secured lender appointing administrators if they hold a Qualifying Floating Charge (QFC).

The route to be taken depends on many factors, such as whether or not a winding up petition has been served. In those circumstances a court based procedure will be needed.

Once the order is made an Administrator will be appointed to take over the day to day running of the company. They will decide whether or not it is possible to continue trading the company or if the business can be sold as a going concern.

The appointed Administrator will notify all known creditors as soon as it is reasonably practical for them to be notified.

Within 8 weeks of their appointment they are required to send a report to known creditors outlining their proposals. This will include the objectives that the Administrators believe are possible and how they will be achieved.

A Pre Pack Administration would be beneficial where the company is at threat of a winding up petition being served on the company, or other factors which will provide a threat to the trading.

My accountant referred me to DCA when I was presented with a large PAYE demand from HMRC.

I tried to arrange a payment plan with them and I was unable to do so.

Luke had a meeting with me and my partner and discussed the options available and before we put the company into liquidation.

Anonymous
Everything was dealt with promptly, very happy with the service and always able to contact Luke and Keely.
IVA Client
DCA are absolutely fantastic and professional and I felt I was able to contact them at anytime.
IVA Client
I know Debbie and Luke Cockerton very well. They are my favourite insolvency people mainly because they actually help my clients rather than just bayonetting the wounded and stealing their gold teeth as some insolvency people seem to do.
Accountant Contact
I benefitted directly and notably by the experience and professional knowledge applied without hesitation to my problems by the staff of DCA within a most friendly operation. The situation was dealt with efficiently, courteously and sympathetically to my personal position.
IVA Client