What is an administration order?
Putting a company into administration is a company insolvency procedure leading to an insolvency administration order being made over a company.
Unlike a winding up order, an administration order is often used in order to allow a business to continue trading for a period of time, which will often improve the chances of some or all of the business being sold for value by someone buying a company in administration, and therefore providing a better return to creditors than if the company was wound up. The sale of a company under administration can often be by way of a pre-pack administration sale, which is a sale that has been negotiated in advance of the company going into administration. A company administration may last up to a year if necessary, although this is often not desirable.
There are two methods by which a company administrator can be appointed; either by the court, or by using the “out of court” company administration procedure. Depending on the correct criteria being met, an administrator may be appointed on the application of the company, its directors and/or any of one or more of its creditors and certain other specified parties by attending the company court to ask for an administration order. The company administration procedure also allows for an administration order to be achieved by the company or its directors or the holder of a qualifying floating charge using the out-of-court administration order route, which has the advantage of being less time consuming and expensive.
It is very important that a company administrator is validly appointed using the correct company administration procedure. At FWJ we have a team of experts who apply for administration orders on a daily basis and can advise you and guide you through the process of putting a company into administration or a firm into administration.
One of the main advantages of putting a company into administration and obtaining an administration order is that the company enjoys protection from its creditors by way of a moratorium on any legal proceedings being brought against the company. We are often asked what can I do if a company in administration owes me money? Well if a moratorium is in place, then a creditor must apply to the administrator, or the court, if they want to take any action against a company in administration.
Contact the Company Administration experts today
The company administration procedure can be a very effective rescue procedure. However, if the process is not undertaken properly it can be fatal for a company, and it is important that professional advice is taken as early as possible. At Francis Wilks & Jones we have the team of company administration experts who are able to discuss any company insolvency matter with you and help you through the company administration process.