Simply put, Administration is a legal umbrella which protects a company from further action from its creditors (including hire purchase and lease creditors) while a solution to the business’s problems can be found.

Administration is used to buy time so that a recovery or restructuring package can be formulated and implemented. Once an administration order has been granted, there is a moratorium on insolvency and other legal proceedings against the company. Any petition for the winding up of the company will be dismissed or suspended by the court.

Administration generally focuses on managing a company’s affairs, business and property for the benefit of its creditors, not the current shareholders or directors.

Once a company is in Administration, the standing directors often lose control of the business. As such it is vital to get the right advice before considering this procedure.

The best way to understand which solution is right for your company is to speak to an expert.

The Beat My Debt Forum is great place to start, giving online access to industry experts.

Alternatively you can call Beat My Debt free on 0800 077 6180 and speak directly to one of our expert advisors who will give free, independent and confidential advice.