Put your company into administration
You can put your company or limited liability partnership (LLP) into administration if it鈥檚 in debt and can鈥檛 pay the money it owes.
You鈥檒l be protected from legal action by people or organisations who are owed money (鈥榗reditors鈥�) and nobody can apply to wind up your company during administration.
Administration can mean your company doesn鈥檛 have to pay all its debts in full - but your company can still be wound up.
There are other options for handling your company鈥檚 debts - you can get legal advice if you鈥檙e not sure administration is suitable for your company.
Appoint an administrator
You must appoint an administrator - who must be a professional 鈥�insolvency practitioner鈥�.
During administration you must hand over control of your company and everything it owns (its 鈥榓ssets鈥�) to your administrator.
The administrator鈥檚 fees are paid by your company.
How administration works
The administrator will write to your creditors and Companies House to say they鈥檝e been appointed - they鈥檒l also publish a notice of their appointment in
Your administrator will try to stop your company being wound up (鈥榣iquidated鈥�). If they can鈥檛, they will try to pay as much of your company鈥檚 debts as possible from the company鈥檚 assets.
Your administrator has 8 weeks to write a statement explaining what they plan to do.
They must send a copy to creditors, employees and Companies House and invite them to approve or amend the plans at a meeting.
The administrator could decide to:
- negotiate a Company Voluntary Arrangement (CVA) so your company can keep trading
- sell your business as a 鈥榞oing concern鈥� to another company - meaning your business can carry on, eg by keeping its clients, workforce or orders
- sell your assets as part of a creditors鈥� voluntary liquidation, pay your creditors from any money raised and close your company
- close your company if there鈥檚 nothing to sell
For as long as the company is in administration your administrator will run your business.
The administrator has control over your business during administration, eg they can cancel or renegotiate any contracts you have or make employees redundant.
When administration ends
Your company鈥檚 administration will end when either:
- the administrator decides the purpose of administration has been achieved, eg a CVA has been agreed with the creditors
- the administrator鈥檚 contract ends - this happens automatically after a year, but it can be renewed
You won鈥檛 have protection against any legal action your creditors take once administration has ended.