Company administration
Administration is a rescue procedure that puts a company under the control of a Licensed Insolvency Practitioner, the administrator, and creates a legal moratorium that stops creditors taking action, including pausing a winding-up petition. It is most useful where a business is viable but under immediate creditor pressure, or where there is goodwill, contracts or assets worth more sold as a going concern than broken up. Insolvency Act 1986, Schedule B1; gov.uk
- What it does
- Hands control to an administrator and freezes creditor action
- The moratorium
- Stops legal action, including a winding-up petition
- Statutory purpose
- Rescue first, better-than-liquidation second
- Best for
- Viable businesses under immediate pressure, or with saleable goodwill
- Versus CVL
- More protection and more cost; built for rescue, not just closure
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What administration is for
Its statutory purpose is, first, to rescue the company as a going concern; if that is not possible, to achieve a better result for creditors than an immediate liquidation; and only failing that, to realise assets. Administration buys time and protection that a liquidation does not. It is more expensive and more involved than a CVL, so it suits larger or rescuable businesses. A practitioner will tell you quickly whether your company is a realistic candidate.
The moratorium is the point
The instant protection from creditor action is what makes administration powerful. If you are facing a winding-up petition or aggressive creditor pressure but the business itself is sound, administration can hold the line while a sale or restructuring is arranged.
Administration, CVA or pre-pack?
If the business needs breathing space to repay over time, a CVA may fit better. If a fast sale of the business is the best outcome, a pre-pack administration may be used. The right tool depends on viability, assets and creditor mix.
Related data
Our 2025 insolvencies by type breakdown: Administrations, CVLs, compulsory liquidations and CVAs compared by volume. Every page on our data hub names its official source.
Common questions
Does administration stop a winding-up petition?
Yes. The administration moratorium halts most creditor action, including an outstanding petition, which is one reason it is used when a company is under immediate court threat.
Can a company come out of administration trading?
Yes, that is the first statutory objective. The company may be rescued and handed back, sold as a going concern, or restructured. If rescue isn't possible the administrator pursues the best result for creditors.