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Company Administration

With Company administration your business is allowed to protect itself from legal action while you go through the process of determining whether you will have a viable business going forward. Company administration is often set in motion when a business becomes insolvent and is facing the possibility of liquidation. Other reasons companies enter administration include:

  • To buy time to restructure and recover
  • To liquidate assets in order to satisfy creditors
  • To assure their creditors they are acting in good faith

There are numerous pros and cons involved with administration, but for many companies burdened by excessive debt or litigation, it may be the best available option for buying time to restructure and recover. HJS Recovery can assist you in determining if administration is in your company’s best interest.

Should Your Company Enter Administration?

Administration is often indicated when a company is burdened by excessive amounts of debt and/or it is facing the possibility of numerous lawsuits from aggrieved creditors. Not all such companies, however, will be good candidates for administration.

Benefits of Company Administration

If your company is insolvent and yet has numerous viable assets such as equipment, cash or property along with a stable cash flow, you may well be a candidate for administration. The primary benefit of entering administration is that it will put any actions against you on hold and provide protection against forced liquidation while you devise a workable restructuring and recovery program. What it does not do is absolve you of your debt.

As such, during the period of administration you will be expected to work in good faith to devise a plan of action for repaying your creditors. You may also want to consider a Company Voluntary Arrangement or CVA which is a binding arrangement for repaying your creditors over a specified period of time.

Disadvantages of Company Administration

Because administration is best suited to those companies with a predictable cash flow and numerous assets, it will not be for everyone. If your company is burdened with a weak cash flow and has only a small number of assets, entering into a Company Voluntary Arrangement may be the wiser course of action.

As the name suggests, company administration means that you agree to surrender control of your company on a temporary basis to a third party administrator. Because of this, some businesses decide to seek alternative routes out of the financial woods.

The administration process is also a public process. That means there is no way to hide the fact that you have temporarily surrendered control of your business from your creditors, clients and staff. In fact, you will be legally bound to inform them of the situation. This notification obligation extends to invoices and other company correspondence as well.

In addition, you need to understand that administration is an expensive process. Therefore companies with limited cash and assets will not be good candidates.

Let us help…

At HJS Recovery we have guided scores of UK businesses through the forest of insolvency back into the light of sustainable growth. If your company has a robust cash flow and numerous assets, but needs time to restructure and devise a workable plan to satisfy creditors, company administration may be the way to go.

We provide personalised assistance that will take all aspects of your enterprise and its potential into consideration in order to determine the best road forward. Whether that is indeed company administration will be determined by the specifics of your case.

Contact HJS Recovery today to learn more about administration. The call is FREE.

Our team of highly trained, experienced advisers have helped hundreds of UK businesses just like yours regain their footing. We’re here for you. You are not alone.

Call us on 0800 0141 130 for a FREE confidential chat and let us help you get things moving again in the right direction.

Contact us today for FREE to learn more about how we can help you and your business.

We have a team of advisers who have helped hundreds of businesses around the UK that have faced financial pressures on every scale. You are not alone.

Call us free and in confidence on 0800 0141 130 and together we will sort things out.