It is never good news when a firm announces that it has gone into Administration. But despite the serious implications associated with this insolvency action, entering into Administration does not automatically mean the end of a business.

When a company is placed into Administration, an insolvency practitioner is appointed as Administrator to manage the affairs of the business. Whilst the Administrator can maintain the usual day-to-day trading activities of the company, one of their common objectives will be to sell the business and assets as a going concern.

To be put into Administration, a company must be either insolvent or facing a very real risk of becoming insolvent. In most scenarios, the directors or a secured creditor, such as a bank, initiate the process.

Once appointed, the Administrator takes control of the company’s business and assets. While it is in Administration, the firm enjoys protection from other creditors taking legal action, although consultation with creditors is part of the Administration procedure.

A firm is usually in Administration for no more than 12 months. If more time is required, an extension can be obtained with permission from the courts or creditors.

It is important to take professional advice before deciding to enter Administration. It can be an extremely effective form of company rescue, but it can also be legally complex.

SFP Group, has extensive experience of working with business owners prior to, during and after Administration.

Administration and turnaround

Administration is available to companies of any size and is utilised in many cases as a method to restructure a company’s business. The time spent in Administration should provide the breathing space needed to achieve one of the specified objectives.

The Administrator must perform their function with the objective of:

  • Rescuing the company as a going concern; or
  • Achieving a better result for the company’s creditors as a whole than would be likely if the company were wound up (without first being in Administration); or
  • Realising property in order to make a distribution to one or more secured or preferential creditors

What is a pre-pack Administration?

A pre-pack Administration is an agreement where the sale of all or part of a company’s business or assets is negotiated with a purchaser prior to the appointment of an Administrator. The sale then completes immediately or shortly after the Administrator is appointed. They are not illegal but should only be utilised in certain circumstances where alternatives have been considered and dismissed, leaving pre-pack as the most likely route to achieve one of the Administration objectives and ensures the best outcome for stakeholders.

How SFP Group can help with Administration?

  • You will have immediate access to professional, award winning advice
  • Clear jargon-free guidance on various turnaround options
  • Use our award winning brokerage to find a funding facility
  • We work with you to find the right solution for all stakeholders

Seek professional help as soon as possible

No matter what the reason, if you are experiencing financial difficulties the key is to seek early professional advice.

The SFP Group has been voted the best business recovery specialists in the UK by the Business Moneyfacts Awards over the past 5 years and are experts at helping you find a solution which works. Fill in our call back form or call us now on 020 7538 2222.

Looking for more information? Fill in the call back form or call us today on 020 7538 2222

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