Company Administration Mobberley in Mobberley

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 Mobberley, 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 Mobberley

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 Mobberley (Staffordshire)

Get in touch

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


Skip to

Gallery

Other locations available for company administration mobberley
Knowl Bank Abbots Bromley Hazles Cross Haselour Sharpley Heath Otherton Far Hoarcross Essington Pershall Bridge End Shutlanehead Swynnerton Rolleston on Dove Basford Harper's Gate Newtown Waterfall Tittensor Sandfields Betley Woodlane Summerhill Miles Green Audley Packmoor Wombourne Cotonwood Gipsy Green Himley Nethertown Blakeley Woodwall Green Stapenhill Ford Green Latherford The Handfords Blythe Marsh Whitehurst Aldershawe Aston Parkside Bank Top Ubberley Shenstone Stowe-by-Chartley Cauldon Lowe Croxden Mavesyn Ridware Gentleshaw Cliff Vale Radmore Wood Willoughbridge Blackbrook Water Eaton Tunstall Lower Hatton Rumer Hill Huddlesford Dunkirk Hardings Booth Baddeley Green The Rookery Somerford Newtown Congleton Edge Totmonslow Bishton Little Bridgeford Mitton Roche Grange Hilton Offleyrock Rickerscote Longbridge Hayes The Quarry Coton Wereton Northwood Porthill Brookhay Hollies Common Bobbington Ash Bank Stallington Leek Fradswell Yarnfield Bowers Freehay Norton Canes Bradwell Blount's Green Coton Hayes Whitfield Blackshaw Moor Boscomoor Rownall Upper Tean Church Hill Stafford Dosthill Wootton Rue Hill Lawns Wood May Bank Tithebarn Marchington Caverswall Winshill Newpool The Wharf Bottom House Rileyhill Tamworth Fradley South Dods Leigh Colshaw Woodshutts Fisherwick Chesterton Cheadle Park Newlands Norton-in-the-Moors The Leys Enville Levedale Coldmeece Shelton under Harley Hobble End Standeford Chesterfield Trescott Crossgate Whitmore Littleworth Gorstey Ley High Onn Wharf Gratwich Moneystone Stadmorslow Drointon Croxall Longshaw Hixon Blackwood Hill Threelows Harlaston Boley Park Quixhill Newborough Lutley Cats Edge Greenhead Westwood Wetton Elford Smallthorne Weston Outwoods Carroway Head Kingston Hill Blackbrook Betley Common Rising Brook Joiner's Square Great Bridgeford Wardlow Two Gates Kingsford Norbury Junction Fazeley Sugnall Wychnor Bridges Hawthorns Kettlebrook Fegg Hayes Lightwood Brickbridge Abbey Green Walton-on-the-Hill Barton Gate Armshead Gnosall Dilhorne Gratton Swindon Deadman's Green Great Moor Froghall Chestall Acton Trussell Forsbrook Handsacre Coxgreen Calton Hatherton Copmere End Woodseaves Loggerheads Oldfallow Bilbrook Cotes Oulton Heath Newstead Cross Green Longnor Mossgate Lower Drayton Aspley Sandford Hill Allimore Green Hanley Hilderstone Whittington Rowley Park Endon Bank Shelton Heatley Denford Shut Heath Oakley Gospel Ash Winnothdale Ingestre Gnosall Heath Milldale Kiddemore Green Overton Rough Close Dresden Brookhouses Chorley Cheadle Oak Hill Lichfield Kerry Hill Aston-by-Stone Holt Hill Kingsley Moor Gillway Sandyford Wilnecote Sneyd Green Whittington Acton Gate Wimblebury The Blythe Hill Ridware Woodhouse Green Stretton Napley Heath Butterton Rakes Dale Broomyshaw Barton Green Hodgefield Cookshill Millend Combridge Coton Clanford Gayton Hazelslade Stramshall Croxtonbank Hopton Alton Meretown Springhill Adbaston Gospel End Stretton Offleymarsh Bradnop Wheaton Aston Townsend Heath Hayes Birchendale Olive Green Billington Coven Whitemoor Whitley Heath Cheslyn Hay Heaton Seisdon Birches Head Stanley Moss Doxey Colton Four Ashes Milford Elford Heath Wolstanton Laney Green Middleton Green Newchapel Red Street Sturbridge Trent Vale Townhead Hanbury The Bodnets Bednall Head Rawnsley Hollybush Ravenshall Shirleywich Oxford The Lymes Teanford Brewood Bradley in the Moors Burslem Blurton Warslow Little Wyrley Bolehall Moss Pit Willslock Boundary Knypersley Weston Jones Hamstall Ridware Keele Slitting Mill Westbeech Walford Hilltop Wychnor Cannock Wood Ashley Dale Chase Terrace Lightwood Etruria Bank Top Bromstead Callingwood Blundies Seighford Littlewood Stanshope Hillcroft Park Wetley Rocks Middle Madeley Hartley Green Upper Mayfield Highfields Spath Burton upon Trent Dunston Bednall New Wood Featherstone Barlaston Whitehill Smestow Edingale Shaffalong Upper Longdon Bromley Wood Stonehouses Newton Hurst Painleyhill Lordsley Mayfield Gillow Heath Whiston Meir Hay Newtown Wildwood Nether Stowe Lower Nobut Rushton Spencer Pasford Hanford Brown Lees Heron Cross Little Stoke Middle Hill Brown Edge Hoften's Cross Beech Alders Pillaton Chebsey Brund Greensforge Longdon Green Stoke-on-Trent Hollington Bradshaw Longridge Tadgedale Great Chell Bramshall Ravenhill Cranberry Great Chatwell Cold Norton Brinsford Offleyhay Barton-under-Needwood Wain Lee The Heath Rock End Bemersley Green High Town Wall Sideway Lupin Bloreheath Woodcock Heath Cellarhead Slade Heath Broadeye Boothen Tatenhill Common Stubwood Blythe Bridge Longport Meaford Balterley Cauldon Millmeece Standon Stonydelph Threapwood Trentham Shawfield Breretonhill Stone Heath Poolend Dogingtree Estate Holmcroft Newtown Crakemarsh Knightley Checkley Comberford Orton Beaconside Poolfields Saverley Green Plardiwick Meir Leyfields Garmelow Withystakes Sidway Bradeley Codsall Wood Newton Darnford Robin Hill Foxley Clifton Campville Ellenhall Tuppenhurst Norbury Kingsley Holt Seabridge Alstonefield Fauld Dam Mill Cornhill Scot Hay Four Crosses Lowe Hill Thornes Upper Hatton Beam Hill Cold Well Ilam Windmill Bank Borough Park Hill Top Knighton Meir Heath Little Haywood Stourton The Laches Stone Penkhull Rakeway Grindon Newchurch Great Haywood Blymhill Denstone Perry Crofts Cresswell The Raikes Forebridge Highwood Hanbury Woodend Blymhill Common Ridgeway Braddocks Hay Dunstal Coven Lawn Little Sugnall Burston Knenhall Hademore Stonnall Armitage Little Onn Alrewas Shutt Green Godleybrook Brereton Kingswood Common Great Saredon Western Downs Wigginstall Creswell Green Apeton Anslow Gate Fawfieldhead Balterley Green Fradley Junction Forton Admaston Newfield Coalpit Hill Tillington Spot Acre Barlaston Common Werrington Kidsgrove Horton Dove Bank Ranton Green Coton Normacot Curborough Hanchurch Hopwas Springhill Burntwood Lower Leigh Back o'th' Brook Compton Wheatlow Brooks Maer Tunstall Stableford Gailey Lask Edge Stonywell Leadendale Fairoak Baddeley Edge Coton Green Marston Glascote Podmore Hawks Green Bromstead Common Madeley Weaverslake Chasetown Mill Green Winkhill Woottons Barnfields Red Bull Acres Nook Cross Heath Butt Lane Branston Anslow Bishops Offley Enson Beamhurst Lane Lower Knightley Tatenhill Sandyford Hollins Shareshill Hopedale Middle Mayfield Dunstall Weston Coyney Oultoncross Springfields Burton Manor Wightwick Manor Glascote Heath Stonefield Hardings Wood Heighley Moddershall Bitterscote Leomansley Haregate Chadsmoor Ball Green Church Fields Blackbrook Leacroft Alder Moor Outlands Stanfield Mosslane Gunstone Bridgtown Brereton Cross Turnhurst Moorside Highfields Windy Harbour Pasturefields Tutbury Gospel End Village Church Eaton Green Cotton Loynton Hill Chorlton Bowers Bent Finney Green Goosemoor Green Hartshill Crateford Milwich Ford Balance Hill Hillsdale Hints Morridge Side Lower Ellastone Lynn Mucklestone Hazles Park End Newton Woodmill Ryecroft Gate The Shruggs Gerrard's Bromley Church Mayfield Barton Turn Newborough End Fulford Whiston Colwich Pipe Ridware Carmountside Edial Upper Nobut Cotes Heath Oaken Sheen Ramshorn Buddileigh Knightley Dale Newcastle-under-Lyme Elmhurst The Bratch Oakamoor Brazenhill Mixon Clayton Ounsdale Drayton Bassett Uttoxeter Rodbaston Amington Footherley Leekbrook Lower Elkstone Cobridge Ashwood Little Burton Huntley Butterton Adderley Green Bowsey Wood Longsdon Lawnhead Hollinsclough Sutton Stanley Moor Shraleybrook Birch Cross Hazlecross Hollins Berry Hill Doley Hednesford Charnes Codsall Baldwin's Gate Little Heath Ipstones Etchinghill Six Ashes Chapel Chorlton Knotbury Orgreave Rocester Moreton Jack Hayes Aston Hyde Lea Stanley Talke Pits Blithbury Christ Church Harriseahead Hadley End Perton Browns Lane Birchall Yoxall Goldenhill Stowe Okeover Bickford The Brampton Crackley Orslow Mount Pleasant Churnet Grange Fenton Low Prospect Village Chell Heath Shobnall Townend Garshall Green Abbey Hulton Belgrave Whitgreave Southlow Great Gate Rushton Bank Bradley Needwood Derrington Beffcote The Hollies Rangemore Consall Farewell Morrey Coton Hill Top Hill Top Dimsdale Hammerwich Halfpenny Green Marston Woodhouses Ranton Cowley Iverley Westlands Cheddleton Heath Pipehill Bromstead Heath Littleworth Bucknall Woodgate Overmoor Dapple Heath Cheadle Common Draycott in the Clay Longton Jugbank Talke Biddulph Moor Thorncliffe Quarry Heath Bentilee Kingstone Little Saredon Bagnall Churchbridge Blore Chatcull Washerwall Walton Penkridge High Onn Broomhill Oulton Grange Old Perton Church Eaton Lower Penn Owen's Bank Creswell Church Leigh Red Hill Middleport Ashley Heath Halmer End Upper Leigh Wrinehill Blakeley Lane Light Oaks Calf Heath Congreve Fradley Bromley Hall Woodcroft Tixall Upper Ellastone Beasley Morrilow Heath Napley Wetwood Stanton Cotwalton Broad Meadow Gailey Wharf Upper Cotton Broughton Weston-under-Lizard Oulton Wigginton Hem Heath Smallrice Blakelow Dales Green Middle Cliff Endon Almington Hulme Foxt Lane Green Prestwood Ball Haye Green Brineton Stockton Brook Butters Green Boon Hill Woodend Anslow Common Horsebrook Prestwood Godstone Giggetty Nurton Hill Cowall Moor Springwood Efflinch Haunton Hilliard's Cross Pattingham Hookgate Knutton Fenton Upper Hulme Madeley Park Norton East Upper Elkstone Loxley Green Sandonbank Lower Stonnall Overley West Hill Ellastone Nurton Huntington Coven Heath Long Compton Woollaston Creighton Flash Waggersley Common Side Pitts Hill Coton Farm Longnor Brockton Fole Blackfords Hulme End Upper Landywood Coton in the Clay Knighton Lapley Oldfurnace Little Hay Bond End Poolfold Amerton Trinity Fields Norton Bridge Westcroft Dagdale Brocton Whitecross Lower Tean Rugeley Burnhill Green Horninglow Haughton Baswich Spring Hill Rudyard Woodhouses Moreton Florence Redhill Coltstone Newtown Rake End Croxton Blackwaters Queensville Little Madeley Sandon Slindon Mobberley Shenstone Woodend Madeley Heath Onneley Bignall End Tompkin Leese Hill Dayhills Walton Cracow Moss Farley Netherland Green High Offley Bonehill Boney Hay Grindley Stoke-upon-Trent Swinscoe Commonside Hoar Cross Coton End Above Church Ecton Shallowford Ashley Weeford Little Aston Meerbrook Muckley Corner Yarlet Whittington Warstone Gorstyhill Castletown Waterhouses Hockley Armsdale Great Wyrley Onecote Goosemoor Norton Green Field Hansley Cross Colton Hills Blore Trysull Lea Heath Dunsley Wood Lane Landywood King's Bromley Hinksford Bishops Wood Thorpe Constantine Four Ashes Scounslow Green Withington West Chadsmoor Milton Hales Hartwell Beechcliff Salt Little Chell Butter Bank Clough Hall Blymhill Lawns Blithfield Green Heath Roughcote Leycett Biddulph Shebdon The Rowe Winnington Stockwell Heath Mile Oak Knowl Wall Pye Green Weeping Cross Burntwood Green Cat's Hill Cross Acton Wootton Cannock Parkgate Coombesdale Marchington Woodlands Outwoods Ribden Draycott in the Moors Beamhurst Alsagers Bank Little Ingestre Longdon Wallbridge Park Sandborough Eccleshall The Potteries Kingsley Lower Loxley Basford Green Streethay Silverdale Burybank Kinver Oulton Dunwood Knowle Style Cheddleton Apedale Moorend Dunston Heath Ashmore Brook Coppenhall Mill Green