Company Administration Process Explained

Company Administration Process Explained

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Company Administration Process Explained

Company Administration Process Explained.- is a complicated process to understand.

So then please bear with this process.

A company may then enter administration via one of the following:

  • Court order application by 50% or more of shareholders;
  • Court order application by company directors;
  • An application to the court by one or more of the company’s creditors;
  • A creditor who has registered a valid qualifying floating charge may appoint.

Once an administrator is then appointed: –

  • Directors Powers Cease;
  • Control hands over then to the administrator;
  • Administrator writes to the companies known creditors, advising of the appointment;
  • The administrator reviews the company’s position enabling the best way forward. All Legal action ceases upon administration by creditors while administrator in the office;
  • The administrator has eight weeks to determine what to then do with the company. The principal purpose of the administrator is to protect the company as a going concern then. Notwithstanding, if that is not in the best interests of creditors, they will then either:
  • Realize a more favourable outcome for the company’s creditors, than if the company had not entered administration or ;
  • Then sell company assets to pay to one or more of the secured or preferential creditors;
  • The administrator issues a report to all known creditors within eight weeks of appointment. It is known as administrators report. It details action by the administrator to date and the strategy moving forward. Also, an initial creditors’ meeting is then required and needs to advise within ten weeks of the time the company entered administration. The administrator is then required to give creditors a minimum of two weeks’ notice of this meeting.

How Long does an “Administration” last?

The process then lasts one year. Though, it may continue with the additional approval of the creditors and the court. The administrator is then required to provide a written report of their progress. All known creditors receive a report every six months.

While appointed, The administrator has powers; therefore, to achieve their goals. These exceed capabilities held by the company directors, who are powerless during this time. The administrator may, however, remove and replace directors.

Company Administration Process Explained. – When Does it Then Come to an End?

An administration comes to an end in the following ways:

  • Now up to a one-year time limit. May extend with the agreement of the company’s creditors or the court;
  • Purpose of administration achieved;
  • Administrator’s ability achieving the intended goal is in doubt. Therefore,  the administration ceases by applying to court.


Once the administration ends, the company:

  • then returns to the directors’ control;
  • the company then enters liquidation;
  • dissolved;
  • enters then into a company voluntary arrangement.

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Company Administration Process Explained
Company Administration Process Explained
Company Administration Process Explained
Company Administration Process Explained
Immediately stops all creditor legal action
Jobs can be saved in Administration
The business doesn't have to cease trading

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