Best Company Administration Companies 2024

When a company goes into administration, it’s never good news. It’s often the end of a lengthy and painful period of decline for company executives. Unsecured creditors may lose large quantities of money, and their businesses may be jeopardised due to the procedure.

Company Administration is a procedure in which you need a licensed insolvency practitioner acting as administrator to restructure a company to either turn it profitable or sell it to preserve value and employment. It aims to give a company time to restructure and become profitable, sell, or resurrect.

This page describes what a company administration is, how it operates, and what you can do if you become a victim of one.

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Table of Content

1 Best Company Administration Companies 2024
2 What is a Company Administration?
3 How Long Does a Company Administration Take?
4 Why Would a Company Go into Administration?
5 What Happens When a Company Goes into Administration?
6 Can a Company Still Trade When in Administration?
- 6.1 What is the Role of the Administrator?
- 6.2 Who Can Appoint an Administrator?
7 How Long does Going into Administration Last?
8 What are the Advantages and Disadvantages of Administration?
- 8.1 Advantages
- 8.2 Disadvantages
9 Frequently Asked Questions
10 Summary
11 Other Debt Solutions
12 All UK Insolvency Practitioners

From our research, here is a list of the best Company Administration companies in April 2024:

Business Insolvency Company
Business Debt Help
NTF Financial Solutions Insolvency
Begbies Traynor Group plc
Chamberlain & Co
Company Debt Ltd
Greenfield Recovery Ltd
Top Insolvency Firms
Wilson Field Ltd
Purnells Insolvency Practitioners
Forbes Burton
McAlister & Co
Clarke Bell Licensed Insolvency Practitioner

What is a Company Administration?

Company administration is a procedure where management of the company is transferred to a licensed insolvency practitioner to act as the administrator of an insolvent company with the goal of bringing about a recovery to the business. This is a legal procedure, business rescue, and a formal insolvency process for seeking to save a bankrupt company. It necessitates the assistance of a qualified insolvency practitioner licensed by the Insolvency Practitioners Association.

Company administration is a formal process in which an insolvency practitioner, serving as an administrator, works to save the company from maximising the return to creditors.

A limited partnership or a limited liability partnership can both fall into administration. It’s a procedure for dealing with an insolvent – or potentially insolvent – company. While a company administration is not the most excellent choice for every firm, there are times when it is the best way to keep a limited company going while providing the best return for creditors.

It includes a moratorium or protection from legal action by creditors such as HMRC, which means no one can petition to wind up your business while it is in the process.

The administration process gives a company valuable time and legal protection against creditor pressure and threats of winding-up action.

No secured lenders or hire purchase companies can take possession of company property without the permission of the licensed insolvency practitioner acting as the administrator.

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How Long Does a Company Administration Take?

A company administration takes on average 2-4 weeks depending on the existing state of the business.

The first step is to appoint a licensed insolvency practitioner to act as an administrator and they will know whether the business administration could take as little as a few hours or up to a year to survive or close.

The more assets and creditors involved usually extends the more time taken to complete a company administration.

Why Would a Company Go into Administration?

Company Administration is a viable alternative for larger businesses that are in debt and unable to pay their debts and meet one of the following criteria:

Secured creditors can get a better return by keeping the business open.
The company is still viable and has the potential to earn a profit.
It is a nationally recognised brand, such as a football team, that requires time to restructure before a sale can be agreed upon.
Secured or preferential creditors want to get their hands on a piece of real estate.

What Happens When a Company Goes into Administration?

When a company enters administration, an 8-week moratorium against secured creditor pressure, including bailiffs, asset-based lenders, landlords, and hire-purchase companies, permits an administrator to restructure the company.

The administrator, a registered bankruptcy practitioner, has the primary purpose of repaying corporate creditors to the best of his ability, without favouritism.

When is it Ideal to Put a Company into Administration?

It would be best if you think about the following to make sure it’s the right time for your firm to go into administration:

The company should be insolvent or insolvent-in-waiting, with many assets and value. Profitability and cash flow should be reasonably predictable.
There is creditor pressure, and there is a fear that the corporation may be dragged to court shortly. To reclaim what is owed to them, creditors frequently threaten to drive the company into compulsory liquidation.
A Creditors’ Voluntary Liquidation (CVL) would be a better option if the company has few assets and is experiencing cash flow problems. If your creditors haven’t threatened legal action yet, but you’re worried they will, you might want to try a Company Voluntary Arrangement (CVA).

What is the Company Administration Process?

The company has to appoint administrators.
After the appointment, the IP has eight weeks to send official administration recommendations to all creditors.
Creditors must vote on and approve the proposal for the process to continue.
The IP meets with the creditors, which can usually be done virtually.
The IP must put out a statement of affairs every six months.
The administrator leaves the administration at some point, either through a return to profitability, a CVA, an administration pre-pack sale, or liquidation.
The company administration automatically terminates after 12 months unless it is expressly extended.

Can a Company Survive Administration?

The administration of a corporation does not last indefinitely. Trading during the administration is simply a means of keeping things going in the near term while a larger plan of action is prepared and implemented.

The goal is to maintain a business running during administration and afterwards. If it cannot continue trading, liquidation will most likely be the only choice, and the company will be shut down completely.

If the company can’t recover despite trading during the administration period, it generally enters into a voluntary corporate agreement to avoid this. While arranging a repayment plan for its debtors, a CVA allows the company to restructure and clarify its aims.

Everyone concerned is aiming for continuing trading. Those who owed money are unlikely to receive it if the company ceases to operate.

If your employer falls into administration, it does not necessarily mean that the company will close down. If the firm is judged to be viable and might be made profitable again, the Administration process offers breathing space for activities to be done to keep it going.

Can a Company Still Trade When in Administration?

While a company is in administration, it is normal to continue trading. A trading administration is what this is called.

Trading administrations are typically used when a large brand, such as a well-known retail store or a football team, is involved.

In many cases, closing the business might result in unfavourable publicity, harming the brand. Thus the choice is made to keep things going while the administrator works behind the scenes.

What is the Role of the Administrator?

The administration is overseen by an insolvency practitioner, who effectively takes over as the company’s new CEO and relieves the directors of their management responsibilities.

The administrator has eight weeks to draft a statement outlining their plans. One of the following will be the case:

Ensure the company’s long-term viability.
Make a deal with your creditors.
Sell the company as a going concern.
Realise assets to pay a secured or favoured creditor.

The creditors, employees and Companies House must all receive a copy of the statement. After that, creditors and employees will be invited to a meeting where the plans will be amended or approved.

An administrator’s main goal is to save the insolvent company by reorganising its financial affairs. This can range from negotiating new lease conditions with landlords and creditors to starting contracts on the company’s behalf.

Who Can Appoint an Administrator?

A company’s directors can choose to enter voluntary administration with the help of a professional insolvency practitioner. Alternatively, under a debenture issued after September 15, 2003, a floating charge holder can place the firm into administration.

They could put your company into administrative receivership if the charge is on a debenture issued before that date.

Keep in mind that even if your company’s directors initiate the administration, the bank or another holder of a floating charge might appoint their administrator at any time.

How Long does Going into Administration Last?

An administration automatically ends after one year. However, the appointed administrator might ask the court to prolong it for a specific period. Some complicated administrations can take up to three years to complete.

Within eight weeks of starting an administration, the administrator must offer suggestions to creditors. After filing and receiving approval for their ideas, the administrator may take many months to complete the administration as intended.

An administration is expected to run no more than a year, although this time restriction can be extended by the court or the company’s creditors with their consent. A pre-packaged administration can take a week or two to set up.

What are the Advantages and Disadvantages of Administration?

Directors facing insolvency must decide whether company administration is the best option for their company.

Advantages

Any legal actions initiated by creditors are immediately stopped, protecting your company from the threat of compulsory liquidation or other negative legal action while the administration is underway.
The corporation is placed in the hands of a licensed insolvency practitioner who acts as the administrator. This assures that all measures performed during administration are done in the company’s and creditors’ best interests.
The management of the company prevents the creditors’ financial situation from deteriorating.
The administrator is given time to offer creditors a clear view of the company’s finances and outline how the administrator intends to handle the administration and collect payments for creditors.
The business’s continuity can be ensured if a pre-pack is implemented.
The administrator might suggest a CVA during the procedure.

Disadvantages

Your company directors are no longer in charge of the company’s affairs under administration.
Since all correspondence with creditors and clients must contain a notice stating that the company is “under administration” next to the company name, the administration becomes public knowledge.
Your company name must appear on your invoices as “Your Company Name Ltd. (In Administration).” Additionally, the administrator must tell all creditors and workers that the business is in administration.
One of your creditors or the bank may be able to appoint an administrator on their own.
Since the administrative costs can be pretty high, we usually only recommend it for businesses who have a healthy cash flow but are facing aggressive creditor action.
If you do a pre-pack administration, TUPE requirements will apply, which means you’ll have to transfer the personnel and their contracts to the new company, which might be an issue if the newco’s budget can’t afford to meet the old company’s salary.

Frequently Asked Questions

Is administration the same as insolvency?

Administration and liquidation are insolvency proceedings for limited corporations that meet the insolvency criteria. The 1986 Insolvency Act governs each of them. The methods are highly diverse and only apply in specific situations.

What is the difference between administration and liquidation?

In simple words, liquidation is selling – or liquidating – a company’s assets before completely dissolving them. On the other hand, the administration is usually used when a company is in dire financial or operational straits and has to be saved.

Why is administration over liquidation?

Following administration, the company is frequently liquidated.

On the other hand, the administration procedure allows the firm to pursue a pre-pack administration sale and funding possibilities, all of which provide the chance of continuing operations as a new and debt-free company.

If the administrator considers that liquidation is the most likely conclusion, they will provide the necessary instructions to the directors during the final dissolution phase.

Companies are rarely encouraged to undertake voluntary administration unless it has a good chance of succeeding.

Summary

There are many specific problems, certain circumstances, and complex conditions to comprehend throughout a corporation going into administration.

It is a critical time for a company’s long-term security, and you should seek licensed insolvency practitioners who can provide you with free, confidential advice, professional counselling and direction until the administration ends.

All UK Insolvency Practitioners

Here is a full list of Insolvency Practitioners in the UK:

The insolvency practitioner list above gives you plenty of options to choose the best IVA firm in April 2024.