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. 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. 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. 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. Insolvency Act 1986, Schedule B1; gov.uk
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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.
The numbers behind this
See the live official figures on our insolvencies by type breakdown. Administrations, CVLs, compulsory liquidations and CVAs compared by volume. All figures come from named official sources on our UK business distress data hub.
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 is not possible the administrator pursues the best result for creditors.