Administrations

Our expert team of administration lawyers at Francis Wilks & Jones act for clients in all types of administration situations and have many years’ experience between us. No matter what your administration situation, type of company, or personal situation, we have seen it all, and can help. We have helped a wide variety of different companies from different sectors successfully through the Administration process.

How we can help at FWJ

If you are a director of a company that is facing financial difficulties, then you are not alone. It is never easy when you are a director of a company experiencing problems to know when to take decisive action and when to sit tight and try to ride through a financial storm.

Our years of experience have told us that no matter what the situation, it is always beneficial for a company that is facing financial difficulties to take expert advice at the earliest opportunity.

We work as a team with other trusted experts

Our team of expert lawyers work alongside professional insolvency practitioners who deal with administration situations on a daily basis. Together, we help companies to assess:-

  • What options for successful business recovery are there available to my company?
  • Do I have a viable business that could succeed if its’ current financial situation were eased?
  • If my business is viable, what sort of restructuring and rescue tools are available to me?
  • Is administration the right procedure for my company, and will this be more beneficial than any other restructuring or insolvency route?

Advantages of the Administration process

There are many advantages for a company choosing to go into administration.

An administration is a formal insolvency procedure putting a company into administration with a view to either rescuing the company as a going concern, or to at least allow for a better outcome for creditors than an alternative company insolvency procedure, such as a company winding up.

One of the key advantages of putting your company into administration is that the company enjoys protection from its creditors during the period of administration. This gives a company much needed breathing space to put into play a business rescue plan, and usually save jobs in the process.

An administration usually means that the company will continue to trade. This provides many advantages for a viable business, including the retention of goodwill.

If you are a business owner and are considering whether administration is a good option for you, then contact our expert team today to chat through your options. Our team has vast experience of administrations and can discuss with you whether an administration is the best option for you, or whether some other process may be more beneficial for your situation.

Whatever your situation – we can help. Contact us today

Please contact one of our friendly team and we can discuss your current business issues with you. We have also set out below the answers to the common questions we get asked on this subject. We hope you find these useful as well.

 


Common questions answered

1. What is an administration order?

We are often asked What is an administration order? An administration order is the process of putting a company into administration by obtaining an administration order from the court over the business under administration. It is company insolvency procedure designed to give a business in financial trouble some breathing space with a view to either rescuing the company going into administration, or to allow for a better outcome for creditors than one of the alternative company insolvency procedures available such as a winding up order.

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2. Administration order advantages and disadvantages

We are regularly asked by directors about company administration and Administration order advantages and disadvantage. Going into administration is a big decision for directors and the company administration team at Francis Wilks & Jones can help you make the right choice and help you resolve your company insolvency issues. Company administration using the company administration procedure might be the best option for your business, but this will depend on the particular circumstances of your company insolvency. Our team of insolvency experts can talk you through the company administration procedure and discuss Administration advantages and disadvantages with you.

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3. Administration order vs winding up

Directors considering putting a company into administration will frequently seek the advice of our expert team at FWJ on whether putting their business under administration is more beneficial for company insolvency issues than placing a company into liquidation. Whether to apply for an administration order or a winding up order will depend on the circumstances at the time. Our team of insolvency experts have a wide range of experience in both options and can talk you through the best process for your business and make the right decision when considering Administration order vs winding up.

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4. Difference between administration and winding up

A key issue for a director of a company considering company insolvency procedures on a company insolvency is whether it is better to put a company under administration or winding up. What company insolvency procedure is best for your company insolvency matters will depend on your circumstances. Our team of insolvency experts have a wide range of experience in all aspects of company insolvency and can talk you through the options to help you make the right decision. The difference between administration and winding up is our area of expertise.

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5. Company in administration definition

At Francis Wilks and Jones we are often asked about company in administration definition. Company administration means that a company has applied to the court for an administration order which has placed the business under administration. Company administration is a company insolvency procedure designed to give a company some breathing space with a view to either rescuing the company going into administration or the firm in administration, or to provide a better outcome for creditors of the business under administration as a whole.

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6. Difference between insolvency and winding up

A director of a company that is facing financial difficulties will often seek the advice of our expert team on the different company insolvency procedures available for their business. Insolvency law in the UK provides for several different company insolvency procedures and deciding on which one is the most suitable for your company will very much depend on your particular circumstances. Our team of insolvency experts have a wide range of experience in all options and can talk you through the processes to help you make the right decision for your business. Of equal importance, if you are a creditor of a business that you know is in financial difficulties, we can advise you on the best way to get your debt repaid, which may be involve using a company insolvency procedure. Correctly understanding the difference between insolvency and winding up can be vital in company insolvency situations.

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7. When a company goes into administration who gets paid first?

One of the key issues in any company insolvency process is the repayment of creditors and the order of priority in which creditors will be repaid. We are frequently approached by clients who ask us When a company goes into administration who gets paid first? Your dealings with a business under administration or going into administration will be key how you as a creditor recover monies owed. At Francis Wilks and Jones we advise both companies going into Administration as well as creditors owed money how best to safeguard their claim as in the event of an administration order.

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8. Can a company in administration continue trading?

Can a company in administration continue trading is something we are regularly asked to advise on. Directors considering putting a company into administration will often seek the advice of our expert team at Francis Wilks & Jones on whether putting a company into administration means that they have to stop trading the firm in administration. This can be a key consideration for anyone considering going into administration, because if an administration order means the end for the company under administration, then this may not be a suitable company insolvency process for their circumstances.

Our team of insolvency experts have a wide range of experience in all insolvency matters and can talk you through the process and whether it is appropriate and possible to continue to trade your business in administration.

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9. What is administration of a business?

With the number of company insolvency procedures available it can be a minefield for both directors and creditors of a business under administration or a firm in administration to understand what is involved in the company administration procedure, and what does it mean in practice for you. At Francis Wilks & Jones we deal with insolvency and administration daily and are well placed to advise on what this means in practice for directors and creditors and all relevant parties. Our expert legal team are here to help with common issues and questions such as What is administration of a business.

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10. What happens to directors when a company goes into administration?

What happens to directors when a company goes into administration is something we are commonly asked about.

What putting a company into administration means for the position of a director will be understandably be a key concern for directors when considering company insolvency processes, and they will inevitably be concerned about what happens to them personally on a company administration. The company administration team at Francis Wilks & Jones can talk you through the process of what putting a company into administration means for individual directors. Contact the expert team here to discuss your concerns.

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11. What happens to staff when a company goes into administration?

One of the key concerns of any business considering putting a business under administration or their firm into administration is the position of the employees. We are often asked what happens to staff when a company goes into administration? At Francis Wilks & Jones our legal experts often face this issue with our clients. We are well placed to advise what a company can do to act in the best interests of its employees where possible, and what options are available to the company under administration and to the company administration employees in the case of company insolvency.

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12. How does administration help a business?

We are often asked how does administration help a business? Will putting a company into administration have a positive outcome for the business under administration, and if so, how do I go about putting a company into administration and obtaining an administration order?

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13. Company administration

At Francis Wilks & Jones we are frequently asked to advise on company administration. An insolvent company or directors or creditors of an insolvent company often seek more details of the definition of company administration in order to better understand their situation. Company administration is the company insolvency procedure of putting a company into administration, designed to provide the business under administration with some breathing space, possibly to rescue parts of the business under administration, or at least to provide a better outcome for creditors of the firm in administration as a whole than an alternative company insolvency procedure.

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14. Pre-pack administration

An insolvent company facing difficult financial decisions will often seek the advice of our expert team at Francis Wilks & Jones to discuss a pre-pack administration sale of part or all of a business under administration. At Francis Wilks & Jones our team of legal experts are well placed to advise and act for you on either side of a pre-pack administration sale, ensuring your pre-pack administration sale runs smoothly.

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15. Going into administration

We are often asked what does going into administration mean for a company insolvency? Directors of a company with company insolvency problems contact us to discuss options around going into administration for their company. Equally a creditor will contact us to say that a company in administration owes me money, what does putting a company into administration mean for me as a creditor? The company administration team at Francis Wilks & Jones are available to explain the process of what putting a company into administration means for both the company, its creditors and other interested parties such as employees. Contact the expert team here today for more information and advice.

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16. What is company administration?

What is a Company Administration as opposed to any other form of insolvency process? Company administration is essentially designed to rehabilitate a company that is experiencing some financial difficulty. A company placed into administration obtains a moratorium which means that action cannot be taken against the company whilst the moratorium is in place which gives the company time to reach some form of settlement with its creditors.

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17. What is the definition of a company administration order?

What is the definition of a company administration order? A company administration order is an order made by the court either by making an application to court or by filing a Notice of Appointment of an Administrator which is known as the out of court process.

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18. What are advantages and disadvantages of company administration?

It is useful for a company experiencing financial difficulty to know what the advantages and disadvantages of a company going into administration.

Here are 3 examples of advantages and disadvantages which an insolvent company may experience as a result of entering administration.

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19. What happens if a company goes into administration?

It is helpful for directors of a company to know what happens if a company goes into administration. If a company is unable to pay its debts, the company may be placed into administration. If a company is placed into administration an insolvency practitioner is appointed as an administrator of the company to deal with and sell the business, assets, or certain parts of the company for the benefit of the creditors of the company

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20. What does going into administration mean?

When a company is placed into administration, this effectively means that the court has appointed an insolvency practitioner to manage the affairs of the company

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21. How do you put a company into administration?

Here at Francis Wilks & Jones we are often asked how to put a company into administration? There are 2 ways in which a company can be placed into administration. Firstly, an application can be made to court for an administration order, and secondly by way of an “out of court” route

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22. How long can a company be in administration?

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

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23. What is the difference between an administration and winding up?

The administration of a company and the winding up of a company both fall under the category of company insolvency procedures, unlike bankruptcy or individual voluntary arrangements which are personal insolvency procedures.

However, the company administration procedure is often considered to be a rescue process, as the view is to recover the company in order to avoid insolvency, whereas the winding up a company is often defined as a ‘burial process’, because this company insolvency procedure is focused on the compulsory ending of the business affairs of the company and terminating company obligations before liquidation, commonly referred to as a compulsory liquidation

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24. What is the difference between insolvency and winding up?

Insolvency is the generic term that refers to either a company, a legal entity, a partnership or an individual who is unable to pay their debts as and when they fall due. In addition, in the case of a company and pursuant to section 123 of the Insolvency Act 1986, it can also mean that the value of the company’s assets is less than the amount of its liabilities (taking into account its contingent and prospective liabilities).

Winding up a company is a form of company insolvency, most commonly used to describe ending the business affairs of the company and terminating company obligations before liquidation. However, there are other forms of company insolvency procedures including, a Company Voluntary Arrangement, an Administration and a Receivership

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25. What is a company in administration?

The company administration process is often referred to as a rescue process because the aim is to rescue the business and recover the company in order to avoid insolvency. When an administration order is made, whether in court or out of court, the company is then under the management of the administrator appointed by either the courts, the company’s creditors or the company directors. After the administration order is made and the company administration procedure commences, a moratorium also commences which puts a halt on any action against the company during that period

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26. What happens if a company in administration owes me money?

Assuming that you are not a secured or preferential creditor, as the primary purpose of an administration is to rescue the company, administrators are not ordinarily empowered to make payments to unsecured creditors. However, if there are surplus funds available from the realisations to pay unsecured creditors, an exit route, such as a liquidation or a CVA will have to be implemented in order to make such payments to unsecured creditors

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27. When a company goes into administration who gets paid first?

Administrations are a protective temporary measure and therefore are technically not designed to deal with payments to unsecured creditors. Payments to unsecured creditors will normally be dealt with through an alternative exit company insolvency procedure such as liquidation or a CVA.

However generally, the first amounts to be paid out of any floating charge realisations in the administration are the costs and fees of the administrator in performing their functions for the benefit of the company’s creditors

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28. What are the rankings of creditors in insolvency?

In general, creditors in insolvency are ranked in the following order

  • Secured creditors with a fixed charge
  • Preferential creditors
  • Secured creditors with a floating charge*
  • Unsecured creditors
  • Connected unsecured creditors
  • Shareholders

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29. What is an insolvency practitioner?

An insolvency practitioner, commonly referred to as an ‘IP’, is an individual who is licensed and authorised to act in relation to an insolvent individual, company or a partnership. IP’s are normally accountants or insolvency specialists who work in a firm of accountants

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30. What is the purpose of an administration order?

What does going into administration mean and what is its purpose? a company administration order is intended to provide a moratorium to facilitate a rescue of a financially distressed business with a three-tiered statutory purpose in mind

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31. What is an administration order?

A company administration process can be commenced by way of a court administration order made at a formal hearing at Court

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32. What is the "out of court route" into administration?

A company can be put into administration without a formal administration order by filing certain papers in court without the need for a court hearing

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33. Can the company or directors use the “out of court” route into administration if a winding up petition has been filed?

The short answer is no. This remedy is only available to the company or its directors when no winding up petition has been issued

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34. What is a pre-pack administration?

So, what does going into administration mean? Unlike liquidation, administration whether commenced by an administration order or an out of court process, is a “rescue” process rather than a “burial” process for companies in financial difficulties. Where a company is in financial difficulty and it is anticipated to place the company into a formal insolvency process such as administration, then in order to maintain continuity of trading and the status quo of business with minimal disruption, discussions are entered into between the proposed administrator and an interested purchaser prior to administration to agree a sale and purchase of the business and assets from the company to a purchaser (often managed by the existing management) immediately following the appointment of the administrators

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35. Can my company continue to trade following an administration order?

The directors’ powers to manage to company are suspended following an administration order, but the administrator effectively steps into the shoes of management

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36. What is the effect of an administration order?

An administration order for a financially distressed company brings about a protective moratorium to safeguard the company for the benefit of its general body of creditors

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37. Do directors have to co-operate with the administrator?

Whilst the everyday operational function of the director is suspended once an administrator is appointed, directors still remain in office and have statutory duties to fulfil

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38. Can you recommend a suitable Insolvency Practitioner for my business?

Insolvency Practitioners are skilled at what they do will tend to have areas of expertise in certain sectors, business sizes, geographical areas, to name but some factors to bear in mind

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39. Is an administration order a better alternative to a winding up?

If there is a prospect of saving your business, then most definitely yes. Where winding up spells the death knell of a company, administration is intended to be a rescue process in insolvency rather than a “burial” of an insolvent business

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40. Is an administration order suitable for my struggling business?

An administration order is suitable where there is a good prospect of survival for your business, but for certain unexpected events which are crippling your business

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