HomeFWJ takeawayTakeawayCompany rescueAdministrationHow long can a company be in administration?

The normal administration period is one year

The administration of an insolvent company automatically lasts 1 year. This can be extended by an application to the court by the administrators with the consent of the court and or the creditors of the insolvent company.

It is however, the responsibility of the administrator to deal with the affairs of the company as soon as possible and if an administrator makes an application to extend the administration of an insolvent company, they will need to inform the court of the reasons for extending the administration.

Extension of the 1 year period

The reason for the extension of an administration commonly are set out below

  • to complete the process of realising the assets of the company;
  • where the company is party to on-going litigation, such as an application to challenge a transaction entered into by the company before its insolvency;
  • to realise for the benefit of the general body of creditors; and
  • to complete the administration of the company’s affairs (for example, by finalising and submitting tax returns).

It should be noted that it is possible that administration can come to an end sooner than the automatic one year. This occurs in circumstances where the purposes of the administration have been achieved sooner than a year.

It is possible in some circumstances for the administration to be converted to a liquidation.

Should you wish to discuss the above in any more detail, or company rescue in general, please give one of our team a call who will be happy to talk you and answer any questions.

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