When a company enters administration the control of the company is passed to the appointed administrator (who must be a licensed insolvency practitioner). The administrator’s primary goal is to leverage the company’s assets to repay creditors as quickly and as fully as possible without preference.
What happens to a company when they go into administration?
During administration you must hand over control of your company and everything it owns (its ‘assets’) to your administrator. The administrator’s fees are paid by your company.
Is going into administration the same as going bust?
Going into administration is not the same as going bust because the administrators will always try to save the business if possible. When a company goes bust, there is no prospect of it being saved. Instead, its assets will be sold and the company will be dissolved.
How long can a company stay in administration?
12 months
Administrations don’t typically last beyond 12 months, although in cases where more time is required, this will often be allowed so long as the administrator can show that this is required in order to obtain the best result for the company and its creditors.
Can I get my money back if a company goes into administration?
Can I get a refund and my money back if a company goes into Administration? Unfortunately, the short answer is no. If a company enters a formal Insolvency process, you will rank as a creditor. Depending on your status, whether you have some security or not, you will generally rank as an unsecured creditor.
Can a company survive administration?
The aim of the administration period is to improve cash flow, save jobs, and pay off creditors. If improvement doesn’t occur during the administration period and a company remains insolvent, it can ultimately still end up being liquidated.
Who gets paid first in administration?
Secured creditors are those who have security interest over some or all of the company assets, they are usually the first to get paid. Fixed charge holders include banks and other asset-based lenders holding title over a company asset.
Is a company in administration a going concern?
Company sold out of administration as a going concern. When a company is sold out of administration as a going concern, it means that the business will continue to operate although this may be in a more streamlined manner than previously.
How fast do companies go into administration?
How long does the administration process take? Entering into administration can take anything from a few hours to 2 weeks or more, depending on the circumstances. Between engaging an Insolvency Practitioner to the company entering into administration, a strategy will be devised- this typically takes one to two weeks.
Do I lose shares if a company goes into administration?
What Happens to Shares in Administration? Trading in shares will be suspended when a business first goes into administration. The timescale for this is generally a year, although an extension is sometimes allowed.
Is a company in administration a going concern?
Company sold out of administration as a going concern. When a company is sold out of administration as a going concern, it means that the business will continue to operate although this may be in a more streamlined manner than previously.