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The purposes of Administration were changed by the introduction of the Enterprise Act 2002 on 15 September 2003.

The new purposes of Administration follow a strict hierarchy as follows:
  • Rescue the company as a going concern and if not reasonably practicable then;
  • Achieve a better result for the company's creditors as a whole than would be likely if the company were wound up and if not reasonably practicable then;
  • Realise the company's property in order to make a distribution to one or more secured or preferential creditors

Old Administration
Prior to 15 September 2003, the procedure for the appointment of an Administrator solely involved the following:
Petition A Petition for an Administration Order is presented to the Court. The Petition could be presented by the Company, its directors or creditors
Independent Person's Report The Petition was supported by an independent persons report, usually an Insolvency Practitioner
Notice Following the Petition, notice was given to any Floating Charge holder who could then consider alternative course of action, such as appointing an Administrative Receiver
Administration Order If successful, the Administration Order was granted
Administrators Duties The Administrators duties were to manage the business. Make proposals as to the conduct of the Administration and call a meeting of creditors.
Creditors Meeting A creditors meeting was held pursuant within three months of the Administration Order


The new legislation provides for a similar procedure to the 'old style' Administration to be utilised in less common circumstances. The Enterprise Act 2003 introduced a new out-of-court procedure, which has largely replaced the 'old-style' Administration.

The 'old style' Administration is available where:
  • Unsecured creditors wish to make an appointment
  • An Administrative Receiver has been appointed
  • A Provisional Liquidator has been appointed
  • A Winding-Up Petition or Administration application is outstanding
Administration is not available to companies that have applied for one within the previous 12 months.

New Out-of -Court Administration Procedure
The 'new' out-of-court procedure can be used where the appointment of an Administrator is being made by:
  • The Company
  • Its Directors
  • A Qualifying Floating Charge Holder (QFCH)

Post-Appointment Procedure

Administrator's proposals to creditors
  • Under the new regime the Administrator is required to send his statement of proposals to all known creditors within a period of eight weeks
  • Notice of the initial creditors meeting is given with the proposals and the meeting must now be held within a period of ten weeks from the date of the Administration

Period of Administration
  • Automatically ceases at the end of 12 months but can be extended
  • If the out-of-court procedure is used and the purpose has been fulfilled, the Administration ends when the Administrator files the prescribed notice at Court
  • The Court may order that the appointment ceases upon the application of a creditor

Statutory exit routes
  • Creditors Voluntary Liquidation
  • Dissolution
The Administrators proposals may include a proposal for a Section 425 Scheme of Arrangement or Company Voluntary Arrangement


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