Company Administration

Company Administration in Northern Ireland

Company administration is a formal insolvency process available to companies in Northern Ireland who are struggling under the weight of mounting debts and increasing pressure from creditors.

Administration involves the appointment of a licensed insolvency practitioner who will work together with the company’s directors and shareholders to devise a strategy going forward. When a company enters into administration, a moratorium is automatically granted. This places a legal ringfence around the company, protecting it for any ongoing or impending legal action. The moratorium is hugely valuable in giving the administrator time and breathing space to plan for the company’s future.

In some cases, administration can be the catalyst for an intensive restructuring of the company’s operations and finances, for others it can be the precursor to the eventual liquidation of the company.

Administration typically lasts for a maximum of 12 months; however, this can be extended if necessary. A company cannot remain in administration indefinitely, sooner or later it will have to exit the process. For some companies they will exit administration as a more stable and resilient entity, with more streamlined and efficient processes. For others, they will exit administration and enter into another insolvency process such as a CVA. Administration can also end in the sale of the business to a connected or unconnected third party.

While rescue will always be the primary aim, if this is simply not possible for whatever reason, then a company can first enter into administration prior to liquidation if this will result in a better outcome for the company’s creditors.

“Before the Debt Management Plan, I felt like I was drowning in debt with no way out. It gave me the structure and support to manage my repayments and negotiate with creditors. For the first time in years, I can see a clear path forward, and the stress of juggling bills is finally easing.”

What are the Alternatives to Administration?

Administration can be a great choice for those companies faced with threats of legal action from their creditors, however, it is not suitable for all instances of company insolvency.

If the company is ultimately viable, yet is facing financial challenges from existing debt, a CVA could be used to implement an affordable repayment plan. If, on the other hand, the company has no realistic chance of survival in the long-term, it may be advised to wind the company up in an orderly manner and place it into liquidation. This will ensure creditors are treated fairly and the directors of the company adhere to their legal responsibilities once they know the business to be insolvent.

If your company is insolvent, take advice from the professionals. At Northern Ireland Debt Solutions, our team of licensed insolvency practitioners are here to give you the help and guidance you need during these times. To understand more about your options, and to learn if administration could be right for your company, talk to a member of the team today.