Company Administration is a process whereby an insolvency practitioner, like Kirks, is appointed as an administrator to restructure a business. The aim of the administrator is to turn the business into a profitable company or initiate the sale of the company to preserve value and employment.
Our Administration FAQs have been compiled to help you better understand the company administration process and ensure you can make the right choice for your business, your employees, and your creditors.
If your business is under severe financial pressure, but it has underlying value, then company administration may be an appropriate course of action. For example, if your company has a solid customer base and a strong brand that may be of interest to the existing management team or a third party, then administration should be explored.
Entering administration can rescue a financially stressed company through restructuring, therefore helping the business to return to profitability. If this is not possible, then the company may be sold and revived, or wound up and liquidated (for more information about the difference between administration and liquidation, please refer to our administration FAQs).
When a company enters administration their Insolvency Practitioner must also consider the creditors’ interests. It’s worth noting that whilst in administration, your company is protected from compulsory liquidation or other legal recourse (legal protection from your creditors).
The administration process can be tough for the directors of a company, but with professional assistance, it can help provide a much-needed recovery route. For more information read our administration FAQs.
Click on the following articles to find out more about the different administration options available to businesses.