Putting a company or limited liability partnership into administration gives it legal protection against creditors if the company is in debt and can’t pay the money it owes.
Once an licensed insolvency practitioner has been appointed as administrator, they will take control of the company and all of its assets.
During this time, creditors will not be able to take any further action against the company whilst the administrator prepares a plan to rescue, sell or liquidate the company.
Administrators have a number of options open to them including:
- Negotiating a Company Voluntary Arrangement (CVA) with creditors enabling the company to keep trading.
- Selling the business as a ‘going concern.’ The business can be sold back to management meaning it can continue trading in a different form.
- Selling company assets as part of a Creditors’ Voluntary Liquidation (CVL) with any money raised going to creditors.
A pre-pack administration is an arrangement under which the sale of all or part of a company’s business and assets is negotiated with a purchaser prior to the appointment of an administrator, following which the administrator effects a sale immediately upon appointment.
This option provides a seamless transfer from one business entity to another. It can help preserve value in a business and maintain continuity with customers and staff.
Umbrella’s team of experts have a broad range of experience in commercial liquidations. For a free and strictly confidential consultation contact a member of the team. Call: 0800 611 8888 or email us.