How much does an administration cost?

The fees for an administration will vary depending on the circumstances surrounding the company, including the level of debts, number of creditors, the assets and liabilities, including any contingent liabilities and assets which are subject to a fixed or floating charge.

Some insolvency practitioners may require an up-front fee for any advice on administrations; we require no such payment and can provide free, confidential advice. After the company directors have discussed the options available via a cost-free consultation with one of our advisors and if we are chosen to act as administrators, it is at this point the arrangement commences and the appropriate costs will apply.

What is an administration?

An administration is a formal insolvency procedure that will protect the company from creditors whilst the process is ongoing, giving the company respite from creditor pressure. Administration is also an opportunity for the company to potentially be restructured, at the same time removing inefficient or non-profitable parts of the business.

The company can temporarily continue trading as a means of raising as much cash as possible for creditors or allowing time to seek a buyer for the business or assets. Directors lose control of the day-to-day workings of the business with the administrators taking temporary charge, as they plan the best way forward, whether it be through saving the company completely, selling parts of the business or liquidating the company and realising assets.

How is an administration paid for?

The fees involved throughout the process of an administration can be covered in several different ways.

• The company temporarily continues trading
  The Company may continue to trade under the control of the Administrators and costs may be covered from any profits generated.
• Sale of company assets
  If some of the assets within the company are sold, the funds acquired could be sufficient to cover the costs incurred by the IP carrying out the administration.

Why would I want to use an administration?

For insolvent companies, there are many advantages to entering administration. It gives the company breathing space to plan for survival. It can also prevent one creditor taking action which could be to the detriment of other creditors or indeed threaten the very future existence of the company.

• Protection from creditors
  An administration provides the company with protection from creditors whilst the process is ongoing and will halt any legal action creditors have taken such as County Court Judgments or winding-up petitions. It can provide massive respite for company directors who may have been dealing with lots of pressure.
• The company can be restructured
  With the possibility of the company being rescued during an administration, the protection from creditors allows the insolvency practitioners a great chance of restructuring the business to perform at a higher standard. With the advantage of time, the company could end up avoiding being wound up.
• Creditors get the best return
  Insolvency practitioners will always look to get the maximum return to company creditors. An administration can provide a great opportunity for this, as if there’s a possibility the company can continue trading it can provide a greater return to creditors.
• Employees can continue
  If the company is restructured in a manner to continue trading, short-term or long-term, it allows some or all staff to continue working and therefore continue receiving their salary.

How we can help

If you’re worried about your company being insolvent or have creditors constantly breathing down your neck, it’s crucial to act as quickly as possible. Administration is only suitable for certain companies, depending on their situation. If you think it might be right for you, we can guide you through the process and explain whether it would suit your company. We offer free face-to-face consultations nationwide.

To discuss your company’s position, and find out how an administration could work in your situation, get in touch with a member of our advice team for free. It is important to act as soon as possible where unaffordable company debt is concerned. Call us today to arrange your free consultation. 

In summary

Company administration is a formal procedure which must be carried out by a licensed insolvency practitioner. It allows an IP to have control of the company, protects it against creditors, and enables the IP to plan the best way forward for the business.

Although we do not require an upfront fee to carry out an administration, the costs incurred during an administration will depend on the size and nature of the company, the time spent in administration, and any costs incurred for the realisation of assets.

Case Studies

Designer Recliners Limited

Kelly Burton • Manufacturing • Administration, Company Voluntary Arrangement (CVA)

A Sheffield furniture manufacturer and upholsterer has relaunched offering a smaller, more specialised range of products.

Anico Interiors Limited, whose range included reclining chairs for the elderly, had suffered cash flow problems and issues with profitability.

Designer Recliners Limited, managed by director Nick Wall, has purchased the assets and business of Anico, saving all 11 jobs.

Andy Wood and Robert Dymond from Sheffield business turnaround experts Wilson Field were appointed joint liquidators on 8 June and advised on the sale of the 14-year-old company, based on Orgreave Crescent at Orgreave Industrial Estate, as a going concern.

Andy Wood, associate director and insolvency practitioner at Wilson Field said:

“Historically, the company offered a wide range of products but has now streamlined its offer to customers and cut out some unprofitable lines, as well as revamped its website.

“Directors took advice from Wilson Field with the business sold to new company Designer Recliners Limited as a going concern, safeguarding all 11 employees’ jobs. The new company will offer the same service and standards under the same management team but focus on a smaller range of specialised products.”

The company employs skilled staff including upholsterers, seamstresses and cutters and was set up in 2002 by Nick Wall.

Aristocrat Pet Supplies

Kelly Burton • Retail • Administration

The business and assets belonging to a Sheffield online pet supplies company are up for sale. Aristocrat Pet Supplies, a family-owned and run business, milled its own feed and seed on-site in Sheffield and has been trading for over 25 years selling agricultural raw materials, livestock, textile raw materials and semi-finished goods.

Sheffield-based insolvency specialists Wilson Field were called into the firm after it experienced increasing pressure and competition online. Andy Wood and Lisa Hogg were appointed as joint administrators for the company on 26 January.

Wilson Field is trading the business in the short term with a view to finding a potential buyer for the company based on Holbrook Green Industrial Estate near Sheffield.

Andy Wood, associate director and insolvency practitioner at Wilson Field said:

“The business has encountered increased competition in recent years, principally from discount stores which have reduced margins.

“It has been on the market for several months but has not attracted any significant interest so far. As administrators, Wilson Field is trading the business in the short term to maximise realisations on a reduced staff base of seven.”

Aristocrat, which employed 19 staff, offered a range of pet supplies including dog and cat treats, chews, small animal bedding, wild bird supplies, poultry and aquatic food.

Catering Butchers

Kelly Burton • Leisure & Hospitality • Administration

A previously successful, family-owned and managed catering butchers saw its turnover eradicated by the COVID-19 outbreak.

Following a review of all the options with the team at Wilson Field, the directors decided to appoint Wilson Field as administrators.

Kelly Burton, director and insolvency practitioner at Wilson Field added:

“Like many over the pandemic, unfortunately there were some difficulties encountered as the business struggled to keep up its strong sales. However, we are continuing to release the assets for the benefit of the creditors.”

Due to a lack of funding, the business unfortunately ceased to trade; however, the administrators have managed to secure the debtor ledger and a sale of the remaining tangible assets for the benefit of creditors.

💬 Live Chat - Available

✅ Free confidential help & advice

If you or your company is in financial difficulty, I may be able to help you. Our phone lines operate 9am until 8pm - 7 days a week.

Chat With MeFor immediate help & free advice, please freephone:

Free Consultation

Request a free, confidential telephone consultation from 9am - 8pm, 7 days a week.

Call Now Schedule a Call

Back