HomeFWJ TakeawayResourcesWhat 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.

Out of court administration process

This procedure may be commenced by either the company or its directors, or a qualifying floating charge holder (QFCH – usually a lender who has security by way of floating charge over all assets of the company not caught by a fixed charge).

  • Generally, a company cannot go into administration unless it is insolvent, or if the administration is commenced by a QFCH, in which case, the QFCH only needs to show that the company is in default of its QFC security terms.
  • If the company or the directors are appointing and there is a QFCH registered against the company (or in the case of a QFCH appointment, there is a prior ranking QFCH), notice of intention to appoint administrators must first be given to the QFCH, who has overriding powers to appoint administrators of its own choice.
  • In terms of what happens if a company goes into administration it makes no difference if the company entered into administration using an out of court appointment or administration order.

For administration order advice or company rescue help of any nature, please contact our team at Francis Wilks & Jones today.

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