How do I put a company into administration?

Administration is a rescue procedure under the Insolvency Act 1986. It is designed to give a struggling but potentially viable company protection from creditors while a licensed insolvency practitioner tries to save it, sell the business, or achieve a better return than an immediate winding-up. This guide explains who can appoint, how the out-of-court route works, and what happens once an administrator is in place.

What administration is for

Administration places a company under the control of a licensed insolvency practitioner — the administrator — who must pursue the statutory purpose set out in Schedule B1 to the Insolvency Act 1986. The administrator works through a hierarchy of objectives: first, rescuing the company as a going concern; if that is not reasonably practicable, achieving a better result for creditors as a whole than an immediate winding-up; and only failing both, realising property to pay secured or preferential creditors. Crucially, the administrator owes their duty to the creditors as a whole, not to the directors who appointed them — so administration is a genuine handover of control, not a way for the board to stay in charge while sheltering from creditors.

Administration is most suitable where there is something worth saving: a viable underlying business, a valuable contract, a brand, or assets that will fetch far more sold as a going concern than broken up. If a company is simply insolvent with no prospect of rescue and nothing to protect, a creditors’ voluntary liquidation is usually the more proportionate route. Taking advice early is what lets a practitioner judge which is right for your situation.

Who can appoint an administrator

• The company — by resolution of the members.
• The directors — by a decision of the board, the most common out-of-court route.
• A qualifying floating charge holder (QFCH) — typically a bank or lender holding a qualifying floating charge over the company’s assets.
• The court — on the application of the company, directors, or a creditor.

The out-of-court route, step by step

Most administrations avoid a full court hearing. Where the company or its directors appoint, the usual sequence is:

A qualifying floating charge holder can often appoint more quickly, without first filing a notice of intention, because the floating charge gives them a direct route to appoint their chosen administrator. Where the directors appoint, they must also make a statutory declaration confirming the company is, or is likely to become, unable to pay its debts, and that it is not already in liquidation. The precise forms and timings are prescribed by the Insolvency Rules, and getting them wrong — for example, filing the notice of appointment outside the permitted window after the notice of intention — can render the whole appointment defective.

The moratorium — what protection you get

From the moment of appointment, a statutory moratorium takes effect. Creditors generally cannot start or continue legal action, enforce security, repossess goods under hire-purchase or a retention-of-title clause, or present a winding-up petition without the administrator’s consent or the court’s permission. An interim moratorium also applies during the notice-of-intention period, which is why filing that notice gives immediate breathing space — it is often the very reason a company files when a creditor is threatening enforcement.

The moratorium is powerful, but it is not a shield to be abused. It exists to give the administrator time to pursue the statutory purpose, not to let directors carry on trading indefinitely at creditors’ expense. Landlords, finance companies and other secured parties can apply to court for permission to enforce if they can show the moratorium is being used unfairly against their interests.

What happens next

Within eight weeks the administrator must send creditors their proposals for achieving the purpose of administration — for example, a sale of the business, a company voluntary arrangement, or an orderly wind-down. Administration usually lasts up to one year, though it can be extended. If rescue is not possible, the company often moves into liquidation. To compare the routes, see liquidation vs administration vs CVA, and to understand who runs the process see what is an insolvency practitioner.

Frequently asked questions

Sources & further reading

• GOV.UK — Put your company into administration
• Insolvency Act 1986 — Schedule B1 (administration)
• The Insolvency Service — guidance for company directors
• ICAEW / IPA — licensed insolvency practitioner registers

This guide is general information, not formal insolvency advice. Your situation must be assessed by a licensed insolvency practitioner before you act.