Much of the administration advice online is aimed at employees – protecting their employment rights, and so on – but administration advice for business owners can be harder to come by.
If your company is facing insurmountable debt problems, administration is an effective way to protect it against creditors’ winding-up petitions, as well as potentially striking off a portion of that debt.
But you will need a professional insolvency practitioner to be appointed as administrator, so it is essential to seek professional administration advice as early as possible in the process.
The longer you leave it, the more chance there is of your debts mounting or a creditor petitioning for your company to be wound up – so take action as soon as you can to protect your business.
Once in administration, your appointed administrator has eight weeks to draw up a plan of action, as well as to notify Companies House and your creditors, and to post a notice in The Gazette.
Creditors, employees and representatives from Companies House will all be consulted on the administration plans, and may request amendments to be made before the finalised plan is approved.
It’s important to know that while your business is in administration, you hand over all control of its running to the administrator, who will work to restore it to a profitable state.
This may mean renegotiating supply contracts and employment terms, as well as potentially making redundancies, but will all be done in the best interests of your business as a whole.
If it is not possible to get back on to a firm financial footing, there are other options – selling assets to cover debts, selling the business as a whole, or entering into a Company Voluntary Arrangement to give some structure to your future debt repayments.
Administrators typically work on a one-year contract, or until the administration achieves its objectives if that is sooner, but lengthier complex negotiations may mean renewing the contract beyond the first 12 months.
They will also be on hand to give you specific administration advice for business owners in unusual circumstances, or if you have any particular questions or concerns about the process.