administrations.

What is an Administration?

An Administration Order enables a rescue plan to be implemented. An order may be applied for by the company, its directors or one of the creditors. Since introduction of the Enterprise Act 2000 it has become easier and cheaper for companies in most circumstances to enter into Administration.

The company may, if appropriate, continue to trade whilst the rescue plan is formulated and implemented, to achieve the following:

1. Rescue of the company as a going concern.
   
   
2. Achieve a better result for the company's creditors as a whole than would be likely if the company were wound up (without first being in administration).
   
   
3. Realising assets in order to make a distribution to one or more secured or preferential creditors.

Whilst in Administration the Administrator (an Insolvency Practitioner) runs the business, typically with the assistance of the directors. To implement a trading on rescue plan the company needs sufficient funding to continue.

Often the rescue plan can invoke the exiting from Administration into a Company Voluntary Arrangement (CVA) . (See our CVA Page). Upon approval of a CVA the running of the company reverts back to the directors.

For a guide to fees these can be found in the Statement of Insolvency Practice (SIP) No.9 go to http://www.r3.org.uk/publications/?p=80