Is your company under treat by creditors (e.g HMRC, your bank, credit card companies or landlord)? If the answer is yes, continue to read to find out how administration orders could rescue your company from liquidation and dissolution.
What is Administration?
Administration is the process that a company can enter which aims to keep the company trading and its staff employed. This process is in place to help rescue a company that is in financial trouble and is designed to protect the company from its creditors whilst a restructuring plan is put in place.
What type of company is suitable for Administration?
Company administration is most appropriate for a company of a fair size with predicable profitability and cash-flows.
If your company has very little assets and cash flow then a creditors’ voluntary liquidation (CVL) may be a more suitable resolution. If creditors are not yet threatening legal action but you’re concerned that they may in the near future, a company voluntary arrangement (CVA) may be the best option.
When should a company enter into Administration?
1 If your business is at the point where liabilities exceed your assets, your company is insolvent and you should take steps to avoid legal action being taken.
2 Your company is under pressure from creditors and it’s likely the company could be taken to court.
3 Your business should be insolvent or contingently insolvent, and should have a considerable amount of assets and/or value.
If you are thinking of entering into an administration process or have any questions about it then please contact us on the form below or call 0161 827 4600.