Administration is a temporary, powerful procedure which protects the company against creditor action whilst a solution can be found. During an Administration, Licensed Insolvency Practitioners take over responsibility for the day-to-day running of the business. They will endeavour to save the business and prevent any further deterioration in the company’s financial position.
Administration buys a company time to address problems within the business, perhaps by attracting finance or private investors, or in some cases cutting back non-performing areas of the business. If the problems are resolved the company can be returned to the control of the directors.