Administration

Reviewed 18th February 2020

Scotland Debt Solutions has extensive experience of company administration. We can offer trustworthy advice on whether it’s an appropriate option, and the potential implications for your company and yourself as a director.

What is administration?

Company administration helps limited companies deal with serious debt and the associated creditor pressure that prevents them moving forward. It’s an option for business recovery, and can offer a company the best chance of escaping debt through restructuring or a sale of the underlying business.

Pre pack administration is a specific procedure that involves selling business assets to a connected or unconnected party, and is sometimes suitable for companies in severe debt but where the underlying business is viable.

Is your company eligible for administration?

If your company is insolvent but it’s believed that it can recover, administration may be an appropriate solution. The process is typically open to businesses with significant assets, which are experiencing specific issues that have compromised their financial position.

The aim of administration is to achieve on of the following three statutory purposes:

  • Rescuing the business as a going concern
  • Achieving a better result for creditors as a whole than would be possible if the business was liquidated
  • If the above aren’t possible, realising company property for secured or preferential creditors

We can let you know if your company is eligible to enter administration, and provide tailored advice on the process where appropriate.

How administration works

Once the company enters administration a moratorium period of eight weeks begins. This allows the administrator to assess the company’s position and make a plan for the future without fear of creditor legal action.

During this period creditors cannot present a winding-up petition, or harass directors with regard to repayment of their debt. The administrator submits a written proposal to creditors along with a statement of the company’s financial affairs. If accepted, the initial period of administration can end in a number of ways.

How does administration end?

Companies can exit administration in various ways, including:

  • Company Voluntary Arrangement (CVA): this is a formal repayment agreement negotiated by the administrator
  • Trading administration: the company begins to trade its way out of difficulty
  • Sale as a going concern: either as a pre pack or an open market sale
  • Liquidation: If the company does not have a viable future the company can be liquidated by way of a Creditors’ Voluntary Liquidation (CVL).

Advantages of administration

  • The moratorium period protects the company from creditor action, offering vital space to formulate a plan
  • The administrator applies their technical knowledge and experience to give the company the best chance of survival
  • Company restructuring makes the business more streamlined and able to deal with financial difficulty in the future

Disadvantages

  • You lose control of the company when you enter administration, but may regain it if the administrator believes you can trade your way out of difficulty
  • Depending on business complexity, it can be an expensive process
  • The administration becomes public knowledge, which may harm your company’s reputation

How can Scotland Debt Solutions help?

We specialise in helping Scottish companies to escape debt, focusing on business rescue and recovery. We’ll help you negotiate with HMRC and other creditors where necessary, and put forward new plans for repayment.

Scotland Debt Solutions has a network of offices around Scotland, and offers same-day consultations. This allows us to quickly assess your best options when your creditors are pressurising you, and move forward with positivity.

Debt Report
Debt Report

Get your FREE Debt Report today

Find out which debt solution is best for you

Our debt report is completely free to use and is a great starting point for anyone with over £5000 of debts looking to take control of their debt issues. By providing us with details of your incomings and outgoings we can suggest the most appropriate way forward for you.

Get Your Report
Services

Our Other Services

Debt Arrangement Scheme (DAS)

Debt Arrangement Scheme (DAS)

A Debt Arrangement Scheme (DAS) lets you pay off your debt through a series of manageable instalments over a reasonable length of time.

Trust Deed Scotland

Trust Deed Scotland

A Trust Deed involves making a monthly contribution to your debts for up to four years. After this time any remaining debt will be wiped out.

Sequestration

Sequestration

Sequestration is the Scottish version of bankruptcy and may be suitable for you if you do not have the money to pay back your debts

We'll give you a call

Our Scottish based team can help advise you on your debt problems.

When should we call?
Can we leave
a message?
Here at Scotland Debt Solutions we take your privacy seriously and will only use your personal information to contact you with regards to your enquiry. We will not use your information for marketing purposes. See our Privacy Policy.
The team

Meet our qualified Scottish based team

100% Confidential advice

Book an appointment
Tools

Useful Tools

Personalised Debt Report

Personalised Debt Report

Our personalised debt report will help you better understand your financial position and see where your money is going.

Free Scheduled Call

Free Scheduled Call

 Arrange a call with an expert advisor at a time to suit you.

Find a Local Office

Find a Local Office

We have five offices located across Scotland. Find your nearest one here.

More on Business Debts

We can help you with...

Business Debts

Business Debts

Whether you are a sole trader or a limited company director, we can help you work through your current financial problems including money owed to HMRC

Company Voluntary Arrangement

Company Voluntary Arrangement

A Company Voluntary Arrangement (CVA) can help a company to escape debt by negotiating a formal payment plan with creditors allowing for reduced monthly repayments. Directors retain full control of their company during a CVA and the business is allowed to continue trading throughout.

Creditors’ Voluntary Liquidation

Creditors’ Voluntary Liquidation

When a limited company becomes insolvent, it’s important for directors to place the interests of creditors first and do all they can to minimise further losses. Creditors’ Voluntary Liquidation (CVL) is an insolvency process that allows this to happen, and ensures directors comply with strict insolvency laws.

Members’ Voluntary Liquidation

Members’ Voluntary Liquidation

Members’ Voluntary Liquidation (MVL) allows you to close your business and extract the profits in a tax-efficient way. It’s a process that’s available to solvent limited companies, and requires you to make an official Declaration of Solvency prior to commencement.

Overdrawn Directors’ Loan Accounts

Overdrawn Directors’ Loan Accounts

A director’s loan account (DLA) can become overdrawn if too much money is taken from the company that isn’t salary or a dividend. Directors’ Loan Accounts are useful when operated with caution, but can be a cause of concern if the company becomes insolvent.

Winding-up Petition

Winding-up Petition

A Winding-up Petition is a legal notice presented to the court by a creditor with a view to forcing a company into liquidation. If a winding-up order is granted by the court, compulsory liquidation can take place very quickly, and this signals the end of the company.

Close Menu Share with a Friend

Send this page to a friend

via Whatsapp via Messenger via Messenger via Email
Make sure you have WhatsApp installed.

Copy link to clipboard
Close
Edit this Page