Before the company can be placed into Administration it must meet one of the following three objectives:
- That the Company is to be rescued as a going concern
- That it can achieve better realisation of assets for the company’s creditors as a whole than would be likely if the company were wound up.
- That it can realise property in order to make a distribution to one or more secured or preferential creditors.
The appointment of the Administrator is immediate as it is not now necessary to have a court hearing for the granting of an Administration Order. The holders of a floating charge need to be notified in advance of the appointment.
During the period of the administration the Administrator manages the company’s affairs and business in accordance with the proposal that has been agreed with the creditors. The administration should not run for more than 12 months.