If your company is experiencing creditor pressure but the underlying business is viable then you should consider using an Administration procedure to deal with the company’s affairs
Full legal protection from all creditors whilst you and Umbrella formulate a strategy in respect of the company’s future affairs
Directors or third parties have an opportunity to buy back the business as a going concern
Gives the company breathing space whilst a restructuring plan is implemented
What is Administration?
Administration is a formal procedure in which an Insolvency Practitioner can be appointed to take control of the company’s affairs whilst a plan to rescue, sell or liquidate the company is prepared.
When is Administration appropriate?
- The company is facing severe cash flow pressures but the underlying business is viable
- The company is facing legal action but time is needed to consider all options
- The company is insolvent and the directors are concerned about the risks of wrongful trading
Process for Administration
How does a company go into Administration?
There are three entry routes into administration in England:
- By an order of the court;
- Appointment by a qualifying floating charge holder (usually the company’s bank or invoice provider); and
- Appointment by the company or its directors
But my company is being sued by a creditor? Is Administration still available to me?
Administration stops any legal action or process against a company from proceeding, unless the Administrator or the Court give permission. This means that creditors can’t take legal action against a company in administration to recover outstanding amounts.
What is the purpose of the administration?
An Administrator must perform his functions with the objective of:
- Rescuing the company as a going concern, or failing that;
- Achieving a better result for the company’s creditors as a whole than would be likely if the company were wound up (liquidated) (without first being in administration), or failing that;
- Realising property in order to make a distribution to one or more secured or preferential creditors.
The Administrator must perform these functions in the interest of the company’s creditors as a whole.
What is a “pre-pack” administration?
A pre-pack is a shortened form of the phrase “pre-packaged administration”. A pre-pack is a deal agreed in principle prior to insolvency to sell the assets of a failed company, and is then completed upon the appointment of the Administrator.
A pre-pack can ensure a smooth transition with enhanced realisations for creditors, the preservation of value for goodwill and the brands of the business, and company employees retaining their jobs.
If a pre-pack is applicable in an administration where you are a creditor, you will be sent information on why the pre-pack was used when you are notified of the appointment.
Once the Administration appointment has been made
The Administrator’s powers are very broad. Once appointed, we can hold your company together while plans are formulated to rescue the business, maximise asset realisations, or put forward alternative options.
Our duties will include:
- Notifying all relevant parties about the Administration appointment
- Communicate with all creditors from start to finish
- Dealing with any secured creditors
- Managing the business while seeking a purchaser
- Dealing with the sale of assets
- Assist employees in submitting their claims to the Redundancy Payments Service
- Dealing with any company pension scheme
- Preparing proposals and reports for approval by creditors
- Submit a report to the Secretary of State for Business Innovation and Skill on the conduct of directors
- Agree creditors’ claims and make distributions to creditors
- Prepare all statutory reports and take steps to close down the Administration in a timely fashion
- Deal with all paperwork relating to the Company
If you are unsure what situation your business is in, don’t worry!
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Umbrella Insolvency guided me as sole Director of my small limited company, and the shareholders, through every step of a Members Voluntary Liquidation in a very efficient manner. The steps required were clearly laid out and proactively managed by their licensed practitioner. From first meeting through to an interim distribution of funds to shareholders took only a few days in our case. Thereafter, Umbrella will be managing all of the downstream actions required to complete the process with HMRC and Companies House, through to the final discharge of the company.
Following a personal recommendation, we appointed Umbrella.UK Insolvency to handle the voluntary liquidation of our business (MVL). Tom and his team were excellent, keeping us well informed throughout and working effectively with the company's accountants to ensure all documentation was produced and filed on time. I have since recommended Umbrella.UK to friends looking for similar services and I have no hesitation in recommending them more widely.
Thank you so much for your help with my IVA. As an ex-company Director my life took a downward spiral when creditors from my liquidated company called upon my personal guarantees. I had been treading water for months, ran up credit card debts and borrowed from family. When a creditor instigated bankruptcy proceedings against me I thought I was going to lose my house. I contacted Umbrella.UK Insolvency who stopped all the phone calls and threatening letters. Umbrella Insolvency explained things in a way I could understand. They negotiated with creditors and my IVA went through, now I can sleep at night again and I kept my home. Thomas Fox was extremely knowledgeable and I truly thank him and his team.
I engaged Umbrella .UK Insolvency to oversee a Members Voluntary Liquidation for the small consultancy business I've been running. The team talked me through the MVL process, steps and requirements. The paperwork involved was well explained and straightforward, with the initial disbursement of funds handled very quickly and professionally under tight deadlines.
I'd just like to thank both you and Tom for your help with the closure of my company. You have been highly efficient and very professional throughout. Thank you.
I extend my appreciation of your professional efficiency in handling my company business and herewith say thank you.
First of all, I would like to say a BIG Thank You for all of your assistance over the past year. I would not be in the positive state of recovery without Umbrella Insolvency. Your care and assistance at the application stage last summer, along with the advice throughout the year, has been great. I would not hesitate to tell anyone in my negative situation where to turn to.
Before I came to Umbrella.UK Insolvency I was in a bad place mentally due to debt because I believed I would be in my current situation for a long time to come. Umbrella Insolvency walked me through my options and helped me pick the best one. I am genuinely amazed at what they managed to do for me and can now afford to live comfortably, and without the constant worry of debt looming over me.
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