Administration is a legal process that protects insolvent companies from agressive creditors until a way out of financial problems is found. When a company enters administration all legal actions against the company are stopped.

Aim

Administration has a declared aim. It is to protect the company while a plan is drawn up to rescue it, sell it or liquidate it.

Action

An Administrator, appointed by the courts, will determine the best way forward and then oversee its implementation. The best way forward may be:

• Sell the company
• Implement a recovery plan such as a CVA
• Liquidation

Prior to liquidation it may be appropriate to sell the assets to a new or existing company that will continue trading.