Company administration is a form of insolvency in which an insolvency practitioner is appointed to manage the affairs of the company temporarily. The insolvency practitioner acts as an administrator of the insolvent company with the view to the insolvent company making some form of recovery.
The two ways in which a company can be placed into administration
- the first is by application to the court that an administration order is made, and the other is by what is known as the out of court route; or
- the second way in which a company can be placed into administration is by filing a Notice of Intention to Appoint an administrator in court which is followed by the filing of a Notice of Appointment of an administrator. The court route is available to a qualifying floating charge holder of a company or the company or directors themselves.
Alternatives to company administration
- liquidation, as an alternative to administration, is a process which looks to dissolve the company following liquidation as opposed to a company rescue process. Liquidation is a procedure by which the assets of the company are realised and distributed to creditors in satisfaction of the debt owed to them in a specific order as set out in the Insolvency Act 1986. Following this, the company is usually dissolved.
- a company voluntary arrangement is an arrangement made with a company’s creditors where by it is agreed that a company’s creditors debts are settled by way of part payment of the debt that is owed. A CVA proposal requires the vote of at least 75% of a company’s creditors. Once agreed, creditors are prevented from taking steps against a company. All the company’s creditors are then bound by the proposals which are put together by an insolvency practitioner.
Here at Francis Wilks & Jones we are available to speak through all the potential and more appropriate forms of insolvency for you. Please do not hesitate to call us today for help.