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What is administration?

What is administration?

An administration is a formal insolvency procedure for limited companies and partnerships in the UK.  This website focuses on administration procedures for limited companies.

There is a saying that only the businesses that fail to plan are the ones that plan to fail. Of course, no one goes into business with the aim of failing but it happens and businesses have good times and bad times and these are often because of nothing they have done wrong but external events.

If a business hits tough times it is not always right that it should just close and stop trading. If there is a core business that could be profitable if it was not for the large arrears of debts that have built up or if the business can be reduced in size to make it profitable, then it is right that if possible it should be saved. 

Businesses that are in financial trouble that can be saved or might be able to be saved given time often go into administration.

Administration is a procedure whereby a licensed insolvency practitioner is formally appointed as administrator by the court over a company with a view to achieving one or more of three statutory objectives:

  • Rescuing the company as a going concern
  • Getting a better result for the company’s creditors than they would have received had the company entered liquidation instead
  • Realising the company’s assets in order to pay any secured and/or preferential creditors

David Kirk ACA FABRP

David Kirk

David Kirk is a Chartered Accountant and Licensed Insolvency Practitioner.
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Business Renewal
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R Johns
Business Rescue
“At the initial meeting you told us the good and bad things that can happen and were honest and told us to watch out for. No one else had done that.”
J White
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Lynne Firman of Just Beds Ltd
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Chris Pratt of Elecsis Ltd
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Jacci Dellaway of Baylift Services Ltd