How To Place Your Company Into Administration?
A step by step guide to placing your Company into Administration
Placing a company into Administration can be a complicated process and dependent on your companies individual circumstances. Therefore it is always recommended to discuss the situation with a Licensed Insolvency Practitioner, however below is a summary of procedure that needs to be followed to place a company into Administration.
A company can be placed into Administration one of three ways:
- A floating Charge Holder can appoint an Administrator,
- The Directors/Shareholders can appoint an Administrator, and
- The Directors/Shareholders can apply to court to have the Company placed into Liquidation.
On this page we will be detailing the procedure for step 2, Directors/Shareholders appointing an Administrator.
In order for a Company to be placed into Administration, it must be established that the Administration will achieve one of the following purposes:
- Rescuing the Company as a going concern,
- Achieving a better result for the company's creditors as a whole than would be likely if the Company were wound up, or
- Realising property in order to make a distribution to one or more secured or preferential creditors.
Assuming at least on of these objectives can be met, and in order for the Directors/Shareholders to appoint an Administrator, the following requirements must be met:
- The Company must not have been placed into Administration within the last 12 months, 2. The Company has not been subject to a moratorium for a failed Company Voluntary Arrangement in the last 12 months,
- A winding up petition has not been presented,
- A winding up order has not been made,
- A resolution for Voluntary winding up has not been passed, and
- An Administrative Receiver is not in office.
If these conditions have been met the Directors/Shareholders of the Company would be able to appoint an Administrator directly and the first step to place the Company into Administration is to have a meeting of directors or shareholders to resolve that an Administrator be appointed. In this regard Purnells can prepare all of the necessary paperwork for you.
Once that paperwork is signed and sworn it is simply a matter of filing that paperwork into Court and the Company will immediately be placed into Administration. There is not need for any court hearing the documents are stamped by the Clerk and given a Court Reference.
If there are Floating Charge Creditors however you first need to file a Notice of the Intention to Appoint an Administrator and provide five business days notice to the Floating Charge Holders, which is usually the Bank. After the five business days have elapsed the Notice of the Appointment of an Administrator can then be filed in court and once that form has been stamped the Company is in Administration.
Placing a company into Administration can be complicated because the procedure to follow is highly dependent on the circumstances of the Company however the above guide is a brief overview of the matter. No matter what the circumstances of your company Purnells will be more than happy to explain how to place your company into Administration and will prepare all of the necessary documentation for you to ensure that the process is as quick and as straightforward as possible. If you would like a free meeting to discuss you company with a Licensed Insolvency Practitioner please telephone 01326 340 579.