What happens if a company is in administration?

Administration in Insolvency

A company is put into administration where there is a possibility that the company may be rescued, reorganised or its assets could be realised. An administrator can be appointed either on application to the court (by the directors, the company or creditors), or following an administration application made by the directors, the company or a qualifies floating charge holder.

Where a company is an administration, there is a moratorium in place which prevents winding up petitions being made, or resolutions being passed to put the company into liquidation. An administrator is then able to consider whether it is possible to:

  1. rescue the company as a going concern; or
  2. whether it is possible to realise the assets of the company in way which is more beneficial than liquidation; or
  3. to achieve a payment or realisation of assets for the benefit of any secured and professional creditors.

An administrator is required to perform their functions in the interests of the company's creditors as a whole.

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