Administration: definition and example
A statutory insolvency procedure in which an administrator takes control of a company to pursue the relevant statutory objectives.
By Jack Butler-Kettle · Updated
Guidance for England and Wales. Check the contract, amendments and facts that apply to your job.
What it means in practice
Read this alongside GOV.UK guidance on administration.
An administrator manages a company through a statutory insolvency process. An unpaid supplier needs to distinguish debts incurred before the appointment from any new work requested afterwards. Restrictions can affect enforcement, and the existence of a debt does not establish that it will be paid in full.
Confirm the appointment and preserve your account and contract records. Obtain advice from a solicitor or insolvency specialist on creditor claims, restrictions and any proposed further work.
Worked example
The facts
A subcontractor is owed £9,000 when the main contractor enters administration.
What happens
It verifies the administrator's details and submits evidence of the outstanding balance.
It seeks clear written terms before agreeing to any further work.
What this shows
The old debt is recorded separately from possible new work. The eventual distribution to creditors remains uncertain.
Sources
- Put your company into administration. GOV.UK.