Company Administration
South Wales, Cardiff, Newport
Company Administration was introduced by the Insolvency Act 1986 as a procedure aimed at rescuing companies in financial difficulties. The relevant statutory demand provisions were recently replaced by the Enterprise Act 2002, which came into effect on 15th September 2003.
Under the provisions of the Enterprise Act 2002 an Administrator can be appointed by the Court, by the Company or its Directors or by the holder of a floating charge.
The principal purpose of an Administration Order is to save the Company in question although other purposes are also allowed.
Once the Order is granted a moratorium is put in place to protect the company from creditors who may not seek to recover any assets without leave of the Court or the Administrator.
The Administrator has wide powers to run the company whilst he prepares his proposals for achieving the purpose for which the Administration Order has been granted.
Administration may lead to the survival of the company when control can be handed back to the Directors.
Receivership
The term Receivership usually refers to Administrative Receivership although there are other types of receivership.
An Administrative Receiver is appointed by a creditor (usually a Bank), which has security (in the form of a floating charge) over most of a company's assets. Typically the creditor has failed to adhere to the terms of the repayment agreement with the creditor and the creditor has issued a formal demand for payment, which has not been met.
The Receiver's powers can be found in the security documentation but normally include the power to trade and sell the business, as well as additional statutory powers.
The Administrative Receiver's duty, inter alai, is to realise the assets subject to the appointor's security, which usually includes the majority of the Company's assets and he owes no duty to the company's other creditors.
The Receiver's job is complete once he has realised all of the assets subject to the appointor's charge or sufficient assets in order to repay the appointor in full.
For more information regarding our other services then have a look at: Company Liquidation, IVA, Insolvency Service and Insolvency Practitioners.
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