July 18, 2023
By Mark Rostron
But what could this mean for your company? This article sets out all you need to know about administration in light of the recent surge.
Why is there a surge in company administrations?
It is of no real surprise with the soaring inflation rates, and the Bank of England’s predictions of a long recession to come, that companies are struggling to stay afloat and are worried about their futures. So much so that companies are now looking for lifelines from outside of their companies, with many asking Administrators to take the reign and try and save their company or if that is not reasonably practicable or improve recovery for creditors.
This year alone, there has been a 36 per cent increase in administrations, compared with last year, with the total expected to increase again by the end of the year. So, what are administrators, and how can they help save your business?
What does company administration mean?
If you find that your company assets don’t cover your debts, or if your company can’t pay its debts when they become due, then your company may be facing insolvency. In such circumstances, you do have a few options, one of which is to appoint an Administrator to take your company into administration.
Administration is when a licenced insolvency practitioner is appointed to take control of decisions and the day to day running of your company. The insolvency practitioner will be referred to as the Administrator, and they are usually appointed by the directors when your company is facing serious cashflow problems, is nearing insolvency or has received threats from various creditors.
Why do companies go into administration?
Going into administration gives your company time to do one of three things:
In all cases, the administrator’s aim will be to work with you and your company to try and recover as much money and assets as possible. Going into administration will also mean that no other creditor can then bring legal action to wind up your company. You will essentially be shielded from any other claim whilst the Administrator tries to save you company, whether or not it actually can be saved.
Who appoints Administrators?
There are three routes into administration:
It will usually be the company directors that appoint an Administrator to take over by calling for a board meeting and voting on it. However, a qualifying floating charge holder can also do so, such as a bank or building society.
If you have concerns that your company may not be able to cover its debts or are uncertain about your company’s future and need any help or advice on any of the above, please contact Mark Rostron on mrostron@darwingray.com / 02920 829 129 or Kate Heaney on kheaney@darwingray.com / 02920 829 121 for a free initial chat to see how we can help you.
I have worked with Darwin Gray for a number of years and the level of service, professionalism and timely response is second to none. I would highly recommend Darwin Gray to any business.”
Darwin Gray have provided us with a first-class service for many years now. They really take the time to understand our business and develop relationships which results in advice and support that is contextualised and effective.”
We have worked with Darwin Gray for several years and have always found their services and advice to be first class.”
An extremely professional and sincere company who make time for your queries and understand the need to break down certain facts and information to ensure everything is understood perfectly. I would highly recommend the company to anyone looking for any type of legal advice”
PSS has worked with Darwin Gray for many years. We have always received an excellent service. Prompt and professional advice and support.”
We have used several departments within DG recently and we have been very pleased with an effective, efficient and down to earth service. Very happy thus far and I expect that we will continue to use DG.”
Darwin Gray offer us truly superb services. Very professional, quick and services available bilingually which is very important to us, highly recommend.”
My “go to” in urgent and time sensitive cases for direction, support and advice. The team are quick to respond to calls or emails for advice and support on all matters. Always explain complex matters in a way a lay person can easily understand.”
