Company Administration Abbey Wood in Abbey Wood

Contact Us

Company administration is a formal insolvency procedure designed to rescue an insolvent company or, if immediate liquidation is impossible, achieve a better outcome for creditors than that. 

The purpose of administration is to protect the company from legal actions. The administrator assesses and manages the company’s affairs, primarily rescuing the company as a going concern.

Company administration is crucial in the UK’s corporate landscape, particularly for businesses grappling with financial distress. 

This legal mechanism offers a lifeline to insolvent companies or those on the brink of insolvency. 

It provides a structured approach to protecting assets, managing liabilities, and potentially reshaping operations to ensure survival. 

Recieve Free Advice

An organisation that demonstrates insolvency could risk being shut down due to financial issues. 

If a business chooses company administration in Abbey Wood, it will be appointed by an insolvency practitioner who acts as the administrator. 

The Administration Process in the UK

The Administration process is designed to rescue the company if possible or to achieve a better outcome for creditors than liquidation. 

The administration process in the UK is detailed, from initiation to exit.

Initiation

A company can enter administration when it cannot pay its debts, meaning it is insolvent. The directors can initiate the administration, which can be voluntary or forced by creditors. 

The process begins with filing an application to the court, or in some cases, it can be done out of court through a notice of intention to appoint an administrator.

Roles of Directors and Creditors

Once the company becomes insolvent, directors are responsible for acting in the best interests of creditors. 

Creditors, particularly secured creditors, can trigger administration if they believe it will increase their chances of recovering debts.

Appointment of an Administrator

The court typically appoints an administrator, although in some cases, a qualified insolvency practitioner can be appointed without court involvement. 

The administrator’s role is to take control of the company, assess its financial position, and decide on the best course of action to maximise returns for creditors.

Administrator's Responsibilities and Powers

The administrator has wide-ranging powers, including managing the company’s business, disposing of assets, and negotiating with creditors. 

Their primary duty is to the creditors, ensuring that the process follows the legal framework and aims to achieve the best possible outcome for all stakeholders.

During Administration

The administrator begins by immediately controlling the company’s assets, reviewing financial records, and assessing the business's viability.

They may continue trading the business, restructure operations, or negotiate with creditors to reorganise debt if deemed beneficial.

Exit from Administration

The administration process can conclude in several ways:

  • Restructuring: The company may be restructured, allowing it to exit administration and continue operating under a new financial plan.

  • Sale: The business or its assets may be sold as a whole or partly to repay creditors.

  • Liquidation: If a rescue or sale is not possible, the company may enter liquidation, where its assets are sold, and the proceeds are distributed to creditors.

Creditors are paid based on the priority established by law, with secured creditors typically receiving payments first, followed by unsecured creditors. Shareholders are last in line and often receive nothing if the company’s assets are insufficient.

Get In Touch

How to Appoint an Administrator Abbey Wood

Directors can appoint an administrator if they believe it is in the best interests of the company and its creditors. This is often a voluntary step to protect the company from creditors' actions while formulating a rescue plan.

Before appointing an administrator, assessing whether administration is the appropriate course of action is essential.

Administration is typically considered when a company is insolvent or at serious risk of insolvency and when there is a realistic prospect of rescuing it or achieving a better outcome for creditors than immediate liquidation.

Key indicators of insolvency are when a company cannot pay its debts as they fall due or when ongoing legal actions or creditor pressure threaten its operations.

Find Out More

How Does Administration Affect Company Directors?

When a company enters administration, directors lose control over the business. The appointed administrator manages the company to rescue it or maximise returns for creditors. Directors must cooperate fully with the administrator, providing necessary information and access to company records.

Directors remain legally obligated to act in creditors' best interests. They risk personal liability and disqualification from future directorships if found guilty of wrongful or fraudulent trading before administration.

While directors may retain their titles, their authority diminishes significantly. They cannot make operational or financial decisions and must comply with statutory requirements unless the administrator assumes these duties.

Administration can impact directors emotionally and professionally, affecting their reputation and career prospects. After administration, their future role depends on whether the company is rescued, sold, or liquidated.

The Difference Between Administration and Liquidation

Administration aims to rescue or restructure a company to maximise creditor returns. An administrator takes control, manages the company, and explores options to keep it running or sell it as a going concern. If rescue isn't possible, the company may still avoid liquidation.

Liquidation involves closing the company and selling its assets to pay creditors. A liquidator is appointed to oversee the winding-up process, leading to the company's dissolution.

Administration focuses on saving the business, while liquidation focuses on closing it down and settling debts.

What Are The Duties of an Administrator in the UK?

An administrator in the UK has several key duties when managing a company in administration:

  1. Rescue the Company: The primary duty is to try to rescue the company as a going concern, ensuring it can continue to operate and avoid liquidation.

  2. Maximise Creditor Returns: If rescuing the company is not feasible, the administrator must work to achieve a better outcome for creditors than would be possible through liquidation.

  3. Manage Company Affairs: The administrator takes control of the company, managing its assets, operations, and financial affairs to protect and preserve value.

  4. Secure Assets: The administrator must secure and protect the company’s assets from depreciation or unauthorised actions.

  5. Communicate with Stakeholders: The administrator must keep creditors, employees, and other stakeholders informed about the administration process and any decisions made.

  6. Distribute Funds: If the company is sold or assets are liquidated, the administrator is responsible for distributing the proceeds to creditors in accordance with legal priorities.

  7. Comply with Legal Obligations: The administrator must adhere to all relevant UK insolvency laws, including filing necessary documents with the court and Companies House.

These duties ensure that the administrator manages the company effectively during the administration process to maximise returns for creditors and, if possible, save the business.

Costs Associated with Company Administration

The costs of company administration in the UK typically include:

  • Administrator’s Fees: Administrators charge hourly rates, usually between £200 and £600 per hour, depending on complexity and their experience.

  • Legal Costs: Legal fees range from £10,000 to £50,000, depending on the case's complexity.

  • Disbursements: Expect additional expenses for travel, asset valuation, and advertising, typically adding £5,000 to £10,000.

  • Employee Costs: Continuing operations may require paying wages and redundancy, which can vary widely based on the company size.

  • Asset Management Costs: Securing and selling assets usually range from £5,000 to £20,000.

  • Final Reporting: Final reports and closure preparation might cost around £2,000 to £5,000.

Administration costs usually exceed £50,000, depending on the case's specifics.

Get A Price For Administration

How does company administration impact employees?

During administration, employees' contracts generally remain in place. The administrator can decide whether to retain or dismiss employees based on the company's circumstances and recovery strategy.

Employees are considered preferential creditors, meaning their wages, holiday pay, and other benefits are prioritised in the administration process. However, any arrears owed to employees beyond a specified amount may not be fully covered.

Can a company continue trading during administration?

A company can continue trading during administration if the administrator believes it is in the best interest of the creditors.

This can help preserve the business's value, maintain customer relationships, and potentially lead to a more favourable outcome, such as selling the business as a going concern.

The administrator oversees trading operations, ensuring they are financially viable. Risks include the potential for further financial losses, which the administrator must carefully manage to avoid worsening the company's financial situation.

What happens to contracts and leases during administration?

Contracts are not automatically terminated during administration.

The administrator can choose to continue, renegotiate, or terminate contracts based on the best interests of the creditors and the recovery plan.

The administrator similarly handles leases. If the lease benefits the company, the administrator may continue it; otherwise, they may negotiate with landlords to terminate or amend the lease terms.

What happens if the administration is unsuccessful?

If the administration process does not lead to the recovery or sale of the business, the company will typically proceed to liquidation. In this case, the administrator will shift roles to liquidate assets, pay creditors, and dissolve the company.

This often means reduced recoveries for creditors, as assets are sold off piecemeal. For employees, it typically results in job losses and claims for unpaid wages through liquidation.

How does administration affect company shareholders?

During administration, shareholders generally have limited influence, as the administrator acts in the interest of creditors. Shareholders may be consulted during the process, but their control over company decisions is minimal.

The value of shares typically declines significantly, and shareholders may lose their entire investment if the company is liquidated or sold at a loss.

How is the outcome of the administration process determined?

The outcome depends on the company’s financial health, the potential for restructuring, and the interests of the creditors.

The administrator assesses these factors to determine whether to restructure, sell, or liquidate the company.

The administrator must balance the interests of secured creditors, unsecured creditors, employees, and shareholders to achieve the best possible outcome for all parties involved.

How long does a company stay in administration?

Administration usually lasts up to 12 months, but this period can be extended with the creditors' or the court's consent.

If the administration needs to be extended beyond 12 months, the administrator must seek approval from the creditors or apply to the court for an extension, explaining the reasons for the delay.

What is the role of the court in company administration?

The court plays a crucial role in the administration process, particularly in appointing administrators, approving certain decisions, and resolving disputes.

The process usually begins with a court application to appoint an administrator. Subsequent legal proceedings may involve court hearings to address creditor disputes, approve the sale of assets, or extend the administration period.

How are unsecured creditors treated during administration?

Unsecured creditors are typically lower in the repayment hierarchy than secured creditors and employees. Depending on the company's asset realisation, they may receive only a portion of their debts.

While unsecured creditors can file claims, the amount they recover depends on the available assets after secured creditors and preferential creditors have been paid.

What happens to directors' personal guarantees during administration?

If directors have provided personal guarantees for company debts, creditors can still pursue these guarantees during administration. The directors may be personally liable for the guaranteed amounts.

Directors must carefully assess the risk of personal guarantees, as they can significantly impact their finances if the company enters administration and cannot meet its obligations.

Can company administration be challenged or reversed?

Creditors or other stakeholders may challenge the administration process if they believe the administrator is not acting in their best interest. Challenges typically involve court applications to review the administrator’s decisions.

It is rare, but possible, to reverse the decision to enter administration, particularly if the company’s financial situation improves unexpectedly or if there was a procedural error in the administration appointment. This would require a court application and strong justification.

What are the success rates of company administration in the UK?

The success of company administration varies depending on the industry, the company’s financial health, and market conditions.

Administration can successfully restructure or sell businesses, but not all companies are saved.

Studies and industry reports suggest that while some companies successfully emerge from administration, many ultimately proceed to liquidation, especially if the administration was initiated too late or if the market conditions are unfavourable.

What are the alternatives to company administration?

  • Company Voluntary Arrangements (CVAs): A CVA allows a company to agree with its creditors to pay off debts over time while continuing operations. This option is often less disruptive than administration.

  • Pre-Pack Administration: In a pre-pack administration, the sale of the company's assets or business is arranged before the company enters administration, allowing for a swift transfer of ownership and operations.

  • Liquidation: If the company cannot be saved, creditors might opt for liquidation, in which the company’s assets are sold to pay off debts and subsequently dissolved.

Contact Our Team

We cover Abbey Wood (London)

Get in touch

We aim to get back to you in 1 working day.


Skip to

Gallery

Other locations available for company administration abbey wood
Dormer's Wells World's End Kingsbury Acton Green Unity Place Newington West Kilburn Single Street Woodford Bridge Crews Hill Sipson West Norwood New Eltham Parsons Green Tavern Quay Little Stanmore Chingford Hatch Hanworth Blackheath Park Becontree Heath Hampstead Canons Park Tolworth Slade Green South Beddington Horn Park Maitland Park Tokyngton Barnes Swiss Cottage Brook Green Clapham Upminster Harold Wood Manor Park West Wickham Sundridge Catford South Hackney Vale of Health Crooked Billet Church End Honor Oak Park Victoria Hainault Bandonhill Cambridge Heath Lisson Grove Upton Docklands Downe Sydenham Hill Bethnal Green Clapham Common Grange Park Bulls Cross Royal Arsenal West Somers Town Russell Hill Limehouse Forest Hill Leyton Tooting Church End Hayes Town Custom House De Beauvoir Town Bostall Heath Longford South Harrow Putney Cudham Bounds Green Wanstead Flats Corbets Tey Wandle Park Little Britain Cranford South Tottenham Whitechapel Stratford Marsh Bostall Woods Southbury Petts Wood East Ham Stratford New Town Gospel Oak North Kensington Norwood Green Old Coulsdon Leaves Green Pentonville Chiswick West Hampstead Addington King's Cross Upper Walthamstow Ilford Tooting Bec Common Welsh Harp Bushey Mead Chelsea Stockwell Temple Fortune Sudbury West Hendon Holloway Sidcup West Green Deptford Ham Lea Bridge Hallsville Quarter Chinbrook Blendon Belvedere Marylebone Hadley Roehampton Gants Hill Frognal Carshalton Plaistow Purley Snaresbrook Cyprus Upper Sydenham Tulse Hill Becontree Morden East Sheen Wennington Berry's Green Wallington Chadwell Heath Fulwell Chipping Barnet Worcester Park Little Ilford Harringay Surbiton Colham Green Lower Place Blackfen Coulsdon Oval Lower Morden Palmers Green Colyers Horns Green Brunswick Park Knight's Hill Yiewsley Harlington Eden Park Walthamstow Forest Castelnau Clapham Junction Widmore Wanstead Harmondsworth Brondesbury Underhill Coney Hall Ponders End Broom Hill Hockenden Avery Hill Plaistow West Brompton Upminster Bridge Barbican Woodside South Acton Rowley Green St Johns Primrose Hill Stoke Newington Bickley Upper Clapton St Pancras Kensal Town Whetstone Colney Hatch Strawberry Hill South Wimbledon Twickenham Wandsworth Bowes Park Seething Wells Old Ford Finchley Rosehill Clock House Oakwood Brockwell Park Lambeth Creekmouth Sutton Hackney Wick Regent's Park Sands End Crofton Park Kevingtown Berrylands Herne Hill Tooting Bec Lampton Southend Rotherhithe Enfield Highway Crossness Upper Edmonton Bankside Botany Bay Holland Park Welling Barking Rushmore Hill Brixton Kentish Town Ruislip Common Mitcham Little Heath Harrow Weald Wimbledon Common Cricklewood Cranley Gardens Hammersmith Broad Green Ruislip Enfield Island Village Beddington Corner Hornchurch Southgate Highams Park Northumberland Heath Strand on the Green Keston Lessness Heath Westcombe Park Southwark Ickenham Hornsey Wood Green Noel Park Millwall Isleworth Hitchin Square The Burroughs Headstone Yeading Cranham Gipsy Hill Bromley Hampstead Garden Suburb Maypole Harrow on the Hill Motspur Park Loxford Willesden Green Staples Corner Hackney Central Eastcote Village Union Mews Angel West Thamesmead North Wembley Brondesbury Park Knightsbridge Romford Thamesmead Balham Shortlands South Woodford Islington Preston Bromley Common Coldharbour Highgate Canonbury Turnpike Lane Elmers End Roxeth South Hampstead Barnet Gate Downham Higham Hill Whitton Sanderstead Nine Elms Brentford Stamford Hill Brentford End Bloomsbury Southborough Lower Sydenham Biggin Hill Ramsden Kidbrooke Edgware Bury Walthamstow East Acton Abbey Wood Newyears Green Crystal Palace Bermondsey Spring Park North Feltham South Street Collier Row Edgware Hackney Tottenham Hale Osterley Northolt Highlands Village St Helier Richmond Poverest Rise Park Westminster Lamorbey Raynes Park Enfield Wash Dulwich Village Chingford Bromley Fullwell Cross Hornsey Vale Greenhill Nash Holders Hill Freezy Water Queen's Park Crofton St Margarets Nunhead Wallend Grove Park Shooters Hill Manor House Kew Chase Village College Park Coldfall North End Sydenham Upper Shirley Bopeep Vauxhall Foots Cray Shadwell Belgravia Cole Park Dalston Hackney Marsh Cubitt Town Greenwich Highbury St John's Wood South Kensington Mile End Blackwall Fitzrovia Clerkenwell Earlsfield Wormwood Scrubs Barking Wharf Square Harold Hill West Dulwich Hampton Wick Bedford Park Foxbury Tower Hill Risley Close Lower Feltham Hayes Haggerston Shacklewell St Mary Cray Dartmouth Park Barnehurst Hampton Hill Enfield Town Crook Log Selhurst Hampstead Heath Hampton Mill Hill Blackheath Hook Luxted Belmont Kensal Green New Barnet Harefield Grove Fairlop Muswell Hill Redbridge New Cross Tufnell Park Kingston Vale Hayes End Maida Vale Chislehurst West Hatch End Norbiton Oakleigh Park Cowley Peachy Coombe Wimbledon Park Ruxley South Croydon Harefield Monken Hadley Rayners Lane Woodford Green Pinnerwood Park Upper Tooting Riddlesdown Shoreditch Craven Walk Whitehall Hillingdon Castle Green Aperfield Upper Holloway Putney Vale Plumstead London The Wrythe Elstree Park South Hornchurch North Acton East Wickham Kensal Rise Aldborough Hatch Aldwych Ruislip Gardens Notting Hill Shirley St Luke's Uxbridge St James's Goodmayes Hackbridge Golders Green Benhilton Camberwell Eel Pie Island Middle Park Millbank Petersham Hoxton Woodford Wells Ealing Arnos Grove Stepney Strand East Barnet Hillingdon Heath Wallington Square St John's Perivale West Ham Temple Belmont Dagenham Arpley Square Bush Hill Park Chessington Barnsbury Maryland Lewisham Colindale Ducks Island Leyton Marshes Little Venice New Charlton West Hackney Westbourne Green North Greenwich Gallows Corner Kensington North Hyde Addiscombe Beckton Elephant and Castle Poynders Parade Denmark Hill Osidge Norbury Cowley Peachey Totteridge Roundshaw Coldblow Kingsland Holborn Finsbury Park Bow Fortis Green Chelsfield Camden Town Erith Furzedown Neasden South Ruislip Brockley South Harefield Morden Park Kilburn Woolwich Kenton Acton Keston Mark Earl's Court Dollis Hill Plashet Mortlake Clapton Park Wimbledon The Mews South Lambeth Chingford Green Upper Norwood Seven Sisters Carshalton Beeches Hatton Woodside Park Central Parade Walham Green Eltham Archway Penge Albany Park Stroud Green Upper Elmers End Elmstead South Bromley Enfield Lock Alexandra Park Clayhall Selsdon Upper Ruxley Beddington Noak Hill Streatham Park Stanmore Harold Park Silvertown Chelsfield Cheam Collier's Wood West Acton Aldgate Hounslow West Mottingham Cottenham Park Hill End Summerstown Burnt Oak Enfield Winchmore Hill New Cross Gate West Ealing Hounslow Park Langley Malden Rushett Blackheath Royal Standard Soho Kingston Hill Anerley Brimsdown Aldersbrook Cranbrook East Bedfont Belsize Park Greenford Kingston upon Thames Wembley Park Thornton Heath Cann Hall Bayswater North Southwark Rainham Barnet Ratcliff Emerson Park Walworth Isle of Dogs North End Globe Town Streatham Vale Edmonton North Ockendon Monks Orchard Alperton Peckham Woodcote Green Paddington Maze Hill Ardleigh Green North Harrow Mill Meads North Finchley Goddington Barking Riverside Southborough Surrey Quays Well Hall Plumstead Common White City Frank Whipple Estate Brent Park Arkley Crayford Northwood Harrow Barnes Cray Chinatown Leytonstone Shepherd's Bush Norwood New Town Old Bexley Bullsmoor Trinity Buoy Wharf Hadley Wood Rush Green North Sheen Havering-atte-Bower Stonebridge Bromley Park East Finchley Parliament Hill Merton Park Tottenham Green Gunnersbury Stratford Kenley Hyde Park Corner Queensbury Chislehurst Festubert Place Merton Blackfriars Poplar Bellingham Grove Park North Cray Bow Common Wapping Pinner Green Longlands Wembley Southfields St Giles Lower Edmonton Brent Cross Bexley Bell Green Woodlands Hither Green Heston Chase Cross Pratt's Bottom Carshalton on the Hill Croydon Pimlico Newbury Park Dulwich Repton Park Hendon Friday Hill Wealdstone Northwood Hills Forestdale Cowley Tooting Graveney Woodford Clapham Park West Harrow Tower Gardens St Paul's Cray New Southgate Forty Hill New Beckenham Hale End Spring Grove Lee Locksbottom Pinner The Borough Lower Belvedere Walthamstow Village Tottenham Homerton Fairlawn Cottage New Addington West Drayton Finsbury West Ruislip Grahame Park Cockfosters Falconwood Covent Garden Orpington Ruislip Manor Lower Clapton Chalk Farm Hanwell West Kensington North Cheam Streatham Hill Derry Downs Eastcote Battersea Canning Town Leamouth Childs Hill St George in the East The Hyde Hazelwood Charing Cross Charlton Farnborough Canary Wharf Brompton South Norwood Forest Gate Lower Holloway Copse Hill Dudden Hill Streatham Feltham North Woolwich Coalmakers Wharf Teddington Honor Oak Little Woodcote West Barnes Crouch End Friern Barnet Farringdon Seven Kings Harlesden Old Oak Common Old Malden Green Street Green West Heath Uxbridge Moor Bexleyheath Elm Park Southall Farthing Street Barkingside Marks Gate Upton Park Mayfair Temple Mills Gidea Park East Dulwich Putney Heath Beckenham Hounslow Heath Waddon Hayes The Hale Alderwood Terrace Ladywell Brownswood Park Woodcote Denham North Hillingdon Fulham New Malden Lesnes Abbey Kennington Spitalfields Highwood Hill Upper Belvedere Park Royal Hacton Hampton Court Willesden Wandsworth Common