Company Administration is one of the processes that business owners can follow to address the debts and arrears that have built up as a result of falling into financial difficulties. If you are considering if Company Administration is right for you, read on or contact our team on 0808 196 8676.
The process of entering a company into Administration is when control of the business is given to an appointed administrator. This person must be a licensed Insolvency Practitioner who is qualified to advise businesses and individuals in these circumstances.
The Insolvency Practitioner or IP will take charge of using the assets of the company to pay back its creditors, quickly and efficiently. The IP will also repay creditors without preference or prejudice.
Once a company has entered into Administration it is protected from any legal action taken against it by the creditors awaiting payment. This gives the company and its owners valuable breathing space to properly assess whether there is a viable business to continue with.
Company Administration is often set in motion when a business becomes insolvent – when it can no longer repay its debts – and is facing the possibility of liquidation. Other reasons companies enter administration include:
There are numerous advantages and disadvantages involved with Company Administration, but for many companies burdened by excessive debt or litigation, it may be the best available option for buying time to restructure and recover.
TruSolv can assist you in determining whether Administration is in your company’s best interest, or if an alternative solution would be better.
For some companies, entering into Administration will be the right thing to do. For others there are better options. No two businesses have the same situation therefore it’s essential that any one considering putting their business into Administration seeks expert advice.
If your company is feeling the pressure and strain of ever-increasing debt or facing the possibility of legal action from aggrieved creditors, then Company Administration could be an option for you.
If your company is insolvent and yet has numerous viable assets such as equipment, cash or property along with a stable cash flow, you may well be a candidate for Administration. The primary benefit of entering administration is that it will put any legal action against you on hold. It will also provide protection against forced liquidation while you devise a workable restructuring and recovery program.
It’s important to remember that Administration does not free you of your debt.
As such, during the period of administration you will be expected to work in good faith to devise a plan of action for repaying your creditors. You may also want to consider a Company Voluntary Arrangement or CVA which is a binding arrangement for repaying your creditors over a specified period of time.
As Company Administration is best suited to those companies with a predictable cash flow and numerous assets, it will not be for everyone.
As the name suggests, Company Administration means that you agree to surrender control of your company on a temporary basis to a licensed Insolvency Practitioner. Some businesses decide to seek alternative routes as a result of this.
The Administration process is also made available to the public domain. This is important to know because it means your creditors, clients and staff will become aware of your financial difficulties. In fact, you will be legally bound to inform them of the situation. Some business owners do not like the fact that the decision to temporarily surrender control of the business is made public knowledge. Notification of Administration is also extended to invoices and other company correspondence.
Finally – there are costs associated with Company Administration. It is an expensive process. Therefore, companies with limited cash and assets will not be good candidates.
At TruSolv we have guided scores of UK businesses through the forest of insolvency back into the light of sustainable growth. If your company has a robust cash flow and numerous assets, but needs time to restructure and devise a workable plan to satisfy creditors, administration may be the way to go.
We provide personalised assistance that will take all aspects of your enterprise and its potential into consideration in order to determine the best road forward. Whether that is indeed company administration will be determined by the specifics of your case.
Our team of highly trained, experienced advisors have helped hundreds of UK businesses just like yours regain their footing. We’re here for you. You are not alone.
Call us on 0808 196 8676 for a FREE confidential chat and let us help you get things moving again in the right direction.
We have a team of advisors who have helped hundreds of businesses around the UK that have faced financial pressures on every scale. You are not alone.
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