Putting a company into administration can be a stressful experience but our team are able to offer helpful advice during the process.
Bringing administrators in to deal with debt problems can help improve the company's situation and sort out some of the money worries.
Company Administration is an option for companies that are suffering from insolvency and companies that enter administration are assisted in the recovery of the business. Insolvency occurs when a company cannot pay its debts, either in the form of due bills or if the company’s balance sheet shows that there are more liabilities than assets.
Therefore, an organisation which demonstrates insolvency could be at risk of being shut down due to its financial issues. If a business chooses the option of company administration in Ballygally they will be appointed with an insolvency practitioner who acts as the administrator. This may be due to HMRC debt issues - https://www.insolvency-practitioners-near-me.co.uk/hmrc/larne/ballygally/ or other debts which have not been paid.
There are, of course, other options that are available to attempt to rescue the business aside from entering administration which include:
All the above should be considered and discussed with a professional advisor before deciding which route is best.
There are a few methods of entering a company into administration; each of which we can help you with, either by an order of the court, by appointment of a qualifying floating charge holder or appointment by the organisation or its directors.
Once an organisation has entered administration, legal actions or processes against it are halted and creditors cannot take legal action to recover outstanding amounts unless the Administrator or English Court grant permission to. Whilst this protection from creditors is in place the company can assess and consider its options for recovery through re-organisation, re-finance- restructure or even the sale of the business. This protection will usually remain in place for eight weeks, allowing sufficient time to write up a plan of action and organise a creditors meeting.
There are obvious pros and cons regarding this route of dealing with an insolvent business. One advantage of entering a Company Administration in Ballygally is that once set up, you are protected from any negative legal action that may occur – it also prevents the financial position of the creditors worsening.
Another is that a business has the best chance of survival when in the hands of an approved, professional insolvency practitioner and all actions carried out have both the creditors and company in mind. The negatives to be considered include losing all control of business affairs and that the costs can be quite excessive. The administration also becomes public knowledge and must be stated on all correspondence once the administration procedure has begun, right through to when it ends.
It may appear that Administration and Liquidation - https://www.insolvency-practitioners-near-me.co.uk/liquidators/larne/ballygally/ are quite similar, but in fact there are major differences between the two options which do have different objectives. As mentioned, company administration is entered with an aim to rescue the business whereas liquidation allows it to release its assets prior to closing it down. However, both are two separate routes that could be taken depending on the outcome you are aiming for.
Administrators that are appointed must be professional insolvency practitioners - https://www.insolvency-practitioners-near-me.co.uk/larne/ballygally/
It is best to contact someone for professional advice first, so that your circumstance is fully understood, and they can then point you in the right direction. A debt advice centre is a good place to start, as well as the Citizens Advice Bureau or a qualified accountant.
Upon the successful appointment of an Administrator, the business financials will be managed by this individual. The Administrator will always aim to get the best deal for the creditors and will act in the interest of the company’s creditors. This does mean however, that there may be circumstances in which the best outcome is to fold the business and put it into bankruptcy.
It is a sensible move to bring on board an administrator sooner rather than later; even at the first small signs that a business is failing. They can play a significant role in ensuring that your company’s finances make their way back on track. The administrator chosen must have specialist knowledge in the same field as you. This will ensure that the administrator can quickly understand the situation and begin the process.
It is difficult to say whether the company administration procedure will be quick and simple or long and difficult; it depends very much on the financial circumstances and the appointed administrator. After the administrator has been appointed, either by the choice of the director or the enforced appointment from a holder of a floating charge, the administrator has eight weeks to formulate a plan and send out a proposal to all the creditors that are involved.
The administrator will work with the creditors best interests in view, as mentioned earlier, but they will try to stop the company being wound up or liquidated. If this is not achievable, they will pay the creditors as much as possible from the company’s assets.
A copy of the plan will be sent to creditors, employees and Companies House which will invite them to a meeting to approve or amend the plans. The plans could include negotiating a Company Voluntary Agreement (CVA) or selling the business as a “going concern”. In a worst-case scenario, for example, if the company has nothing to sell, then it could be closed.
It could take several months before the administration has been completed as planned, but normally lasts no longer than a year. However, this time can vary, especially when the time limit can be extended by the Court.
It is important to remember that during this process, the administrator has full control over your business and can amend or cancel any contract that the company may have. The administration will only end when the administrator confirms that the original purpose has been achieved or when the administrators contract ends. Contracts normally end after a year, but they can be renewed.