Administration
How an administrator takes control, protects value and works towards a statutory objective.
Administration places a company under the control of a licensed insolvency practitioner. It creates a collective process for dealing with financial distress, with protection against many forms of creditor action. A company may be rescued, its business sold, or assets realised under the statutory hierarchy of objectives.
What administration is trying to achieve
The first statutory objective is rescue of the company as a going concern. If that is not reasonably practicable, or a different course would produce a better result for creditors as a whole, the administrator may pursue a better outcome than an immediate winding up. A more limited realisation for secured or preferential creditors is available only within the statutory conditions.
Rescuing a business through a sale does not necessarily rescue the company that owned it. The business may continue with a buyer while the original company later enters liquidation or is dissolved.
Technical detail
Great Britain uses Schedule B1 to the Insolvency Act 1986. Northern Ireland uses its own Schedule B1 to the Insolvency (Northern Ireland) Order 1989. The statutory objectives should be read in their prescribed order.
Who can start it and who takes control
Depending on the circumstances, appointment can be made through the court or through a statutory out-of-court route by the company, directors or a qualifying floating-charge holder. Eligibility, notices, competing appointments and existing petitions can affect which route is available.
The administrator controls the company’s affairs, business and property. Directors must cooperate and cannot exercise management powers that interfere with the administrator’s functions without consent. Creditors should use the appointment notice to identify the correct case and office-holder.
Proposals, claims and business sales
The administrator explains the intended strategy in proposals and reports to creditors. Creditors may have rights to participate in decisions, form a committee, obtain information and challenge certain conduct. A claim lodged for voting is not automatically accepted for a dividend.
A sale negotiated before appointment and completed shortly afterwards is often called a pre-pack. It is a sale method, not a separate insolvency procedure. Connected-party sales can attract additional statutory safeguards and professional disclosure requirements.
Technical detail
The usual period for issuing proposals is eight weeks after entry, subject to the legislation and any permitted extension. Do not confuse that milestone with the date of a sale or payment to creditors.
How it ends
Administration normally has an initial statutory duration of one year, but it can end earlier or be extended. The exit may involve a rescue, a CVA, liquidation or dissolution. Asset recoveries, litigation, tax and unresolved claims can prolong the wider process.
The moratorium has exceptions and does not extinguish debt. Security, title to goods, guarantees and employment rights need separate consideration. A shareholder or director should not assume that administration releases a personal guarantee.
The England and Wales framework
For an English or Welsh company, the framework is Schedule B1 to the Insolvency Act 1986 and the Insolvency (England and Wales) Rules 2016. Court jurisdiction and the route to appointment depend on the circumstances; notices and court documents must use the correct current requirements.
Companies House filings and London Gazette notices help identify the appointment and later reports. A public filing establishes what was filed; it does not prove that every claim or valuation in the document has been independently verified.
The process, at a glance
- Appointment takes effect. A valid court or statutory appointment starts the administrator’s authority and the administration protections.Statutory milestone — check its trigger and exceptions
- Secure the business and records. The administrator assesses funding, assets, employees and the options for preserving value. A business sale may occur before proposals are issued.Process stage — practical timing varies
- Explain the strategy. Proposals describe the intended objective and route. The usual statutory period is eight weeks, subject to the applicable provisions.Statutory milestone — check its trigger and exceptions
- Deliver the strategy. Trading, asset realisations, claims and distributions follow the approved strategy and legal powers. Creditors receive progress information.Process stage — practical timing varies
- Choose the statutory exit. The company may be rescued, move to another procedure or be dissolved. The initial one-year duration can be extended under the legislation.Statutory milestone — check its trigger and exceptions
Sources & review
Read the source in its own context. Legislation may contain commencement provisions and changes not yet applied to the displayed text. Professional guidance is identified separately from law.
Initial source-based editorial review: 26 Oct 2026. Next scheduled review: 26 Jan 2027. Substantive changes are reviewed before publication.
Source-checked editorial overview. It does not assess an individual case or replace the current legislation and court directions.
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