Insolvency and Company Administration
Under the provisions of the Enterprise Act 2002 the ability of a company to go into administration became easier.
Company administration is one of the options open to insolvent businesses. It allows the re-organisation of an insolvent company, while protecting it from its creditors. Within the administration the company plans are formulated to rescue the business, maximise asset realisations, or put forward alternative options.
Administration can be initiated by directors and used very effectively as a restructuring mechanism. Where the company has a viable future it provides a breathing space in which proposals can be put to the creditors.
The company can subsequently exit from Administration in a stronger financial position.
In all cases a licensed Insolvency Practitioner is appointed to take control of the company and its affairs to assess the business, with the objective of making formal proposals that will allow a turnaround, or to come to arrangements with creditors which provide a better realisation of the company’s assets.
