What is Administration?

• The survival of the company and the whole or any part of its undertaking as going concern.
• The approval of a voluntary arrangement.
• The sanctioning of under CA 1985, S425 of a compromise or arrangement between the company and any such persons as are mentioned in that section.
• A more advantageous realisation of the company assets than would be effected on a winding-up.

Administration will take the pressure of the creditors off the company to give it time to work out a scheme to pay creditors.

During the period in which an administrative order is in force:

• No resolution may be passed or order made for the winding-up of the company.
• No administrative receiver of the company may be appointed.
• No other steps may be taken to enforce any security over the company's property , or to repossess goods in the company's possession under any hire-purchase agreement, except with the consent of the administrator or the leave of the Court.
• No other proceedings and no execution or other legal process may be commenced or continued and no distress be levied against the company or its property except with the consent of the administrator or the leave of the Court.

Administration is a costly procedure as it involves the costs of an Insolvency Practitioner and Solicitor at the commencement of the procedure and during the course of the Administration, and of course the supervision of the court.