Pub and Hotel Business Solutions
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Email:info@pubandhotelbusinesssolutions.co.uk
What is Administration
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Going into administration is when a company becomes insolvent and is put under the management of Licensed Insolvency Practitioners. The directors and the secured lenders can appoint administrators through a court process in order to protect the company and their position as much as possible.
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Who can apply for an Administration
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Going into administration is when a company becomes insolvent and is put under the management of Licensed Insolvency Practitioners. The directors and the secured lenders can appoint administrators through a court process in order to protect the company and their position as much as possible.
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How does Administration work
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​The administration must have a purpose and the Government encourages the use of company rescue mechanisms after administration.
Under the administration option, it is possible for the company and its directors (or a creditor like the bank) to apply to the court to put the company into administration through a streamlined process, by applying to the High Court.
However, the law requires that any finance provider (like a bank or lender), with the appropriate security, is contacted and the aims of the administration be discussed and approved. The finance provider must have a fixed and floating charge (usually under a debenture) and the charge holder will need to give permission for the process to go ahead. Five days clear notice is required.
What should I be aware of
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Cost. Due to the intense and very active role an administrator plays in dealing with the matter, costs can very quickly mount up in administration matters.
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Control.
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Negative publicity.
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Investigations.
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Limitations.
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