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Voluntary Administration Process

4th August, 2017
Robert Moore

Written ByRobert Moore

Marketing Manager


+447584583884

Rob has over a decade of experience in web and general marketing. He has extensive knowledge of the Insolvency sector and has helped many worried directors with their questions.

Rob is now working with the Board at KSA Group Ltd to develop strategic marketing programmes to support the business plan and drive more company rescues.

Robert Moore
  • What is the Voluntary Administration Process?
  • So what does administration mean?

What is the Voluntary Administration Process?

Voluntary administration is an Australian term for administration, but it in UK law the term  is a bit of mix up of the two main rescue insolvency processes; administration and a company voluntary arrangement. Of course, the directors can opt to appoint administrators voluntarily and they have that power to protect their position. The process is started by filing a notice of intention to appoint administrators at the court.

An administration must have a purpose in that it has to achieve a better result than liquidation. One way that this can be achieved is by exiting the administration via a CVA. This is where the company is put into administration first as a way of protecting the company against legal actions and then the company agrees to pay a proportion of the debts over a few years in a CVA. It is the administrator that proposes the CVA. There is no nominee as the administrator takes that position. If the CVA is accepted then control of the business is handed back to the directors with the administrator as supervisor.

So what does administration mean?

This is a tool used to protect a business against legal actions if it is insolvent and financially struggling. The company is taken over by appointed administrators to review the business and decide on a restructuring plan. The business can be put on the market to find a potential buyer as a going concern. There is usually a sale of all or parts of the business and assets.

If the previous directors or third party are interested in buying back the business, this can be done in a pre-pack administration deal. The business is bought at the same time as administrators are appointed, resulting in a quick and efficient process.

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