The advantages and disadvantages of Administration

All legal actions to collect debt including any petitions to wind up the business are stopped.
This allows time for a rescue package to be agreed and put in place.
A better return will be delivered for the company’s creditors than simply winding it up.
The administrator will be impartial and implement a solution which is best for the creditors as a whole.
Any transactions undertaken by the company and payments to employees are guaranteed by the administrator.
As such, suppliers and employees need not be worried that they will not be paid.

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Directors lose control of the business and are not allowed to make any operational decisions without the agreement of the administrator.
While trading, the company must advertise that it is in administration. This may discourage suppliers and clients from continuing to work with the business because of the financial uncertainty.
If the administrator decides that some or all of the business should be sold or closed, jobs may be put at risk.

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