What happens when you go into administration? This is a question that many business owners ask themselves when they are struggling financially. When a company goes into administration, it is usually because they are unable to pay their debts. This can be a scary time for the business owner, and it can be difficult to know what to do next. In this blog post, we will discuss what happens when you go into administration and how you can protect yourself during this time.
A guide to administration:
First, an administrator will be appointed to the company. This person’s job is to assess the situation and make decisions about how to deal with the debts and assets of the business. They may sell off assets, negotiate with creditors, or even restructure the business in order to try to turn things around. The administration process can last up to twelve months, during which time it is often business as usual for the company. However, it is important to remember that the ultimate goal of administration is to find a solution for the company’s financial issues, so changes may need to be made in order for this to happen.
During administration, there are certain restrictions placed on the business and its owner(s). For example, they cannot sell or dispose of company assets without the administrator’s permission. It is also important to note that administration does not always result in success for the business. If a solution cannot be found, the next step may be liquidation.
Overall, administration can be a difficult and uncertain time for a business and its owner(s). However, it is important to remember that the process is meant to try and find a solution for the company’s financial issues. Working closely with the appointed administrator can help ensure a successful outcome for all parties involved. For more information on administration, contact Irwin Insolvency today.
FAQs
What is the difference between administration and liquidation?
In administration, an appointed person will assess the situation and try to find a solution for the company’s financial issues. Liquidation means that the company’s assets will be sold off in order to pay back creditors.
Is administration right for my business?
This is a decision that should be made with careful consideration and advice from professionals. It may be necessary if the company is unable to pay its debts, but it may not always result in success for the business.
What is partnership administration?
This refers to administration specifically for partnerships rather than corporations or sole proprietorships. The administrator will assess the situation and make decisions regarding the debts and assets of the partnership.
What is a notice of intention to appoint?
This is a document that must be submitted to the court before appointing an administrator to a company.
How can I avoid going into administration?
It is important to keep close track of your business’s finances and address any financial issues as they arise. Seeking professional advice and support can also help prevent the need for administration.
Can administration stop my business from entering liquidation?
It may be possible, depending on the situation and the actions taken by the appointed administrator. However, it is not guaranteed and liquidation may still be necessary in some cases.
