What does it mean when a company 'goes into administration? Is it the same as going bankrupt/?

Answer 1

It means an external independant source takes over the running of the company, ie paying off debts and claiming from creditors etc, the administrative duties.

Answer 2

When a company goes into Administration it's designed so that it protects companies from their creditors while a restructuring plan is completed, kind of like a "rescue" plan, to try and save the company. If it is not possible to save/rescue the company then more often than not the company will go into Liquidation, which yes is sort of like a bankruptcy. Unlike a Liquidation, with an Administration future trading is possible. A Liquidation however is the end of the line - there is no way to recover the company and they will not trade in the future.

Very boring I know - but I have to know these things. Send me an email if you want to know more.

Answer 3

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When a company becomes insolvent it means that it has insufficient money currently or expected to pay the bills such as suppliers, electricity, loans, council tax. When this happens the usual system is to go into administration. This is a group of people that try to get the company back up and running and deals with the creditors and hopefully gets additional time to pay etc. If this all fails then the company is made bankrupt and all the creditors have to stand in line to be paid. The Tax people get all that is owed to them out of the assets and then every one else gets a fraction of what they are owed.

Answer 4

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RE:
What does it mean when a company 'goes into administration? Is it the same as going bankrupt/?

Answer 5

What Does Administration Mean

Answer 6

Hi,
Administration of a company happens when the receivers are called , the company is "technically bankrupt" but the receivers will go in, take control of the company( administer it) and then start to asess the assets values of the company and see what can be sold off to pay creditors. If the asset base is not of sufficent value to cover the debts of the company and nobody is willing to provide further lending to revive its fortunes, then the next stage is "bankruptcy" and the firm will be liquidated by order of the courts and "wound up"( cease trading completely).

Answer 7

if it goes into administration then all of the company's assets are liquidated (including uncalled shares), if the funds are insufficient to satisfy creditors then the company is considered to be dissolved and is struck off.

after this happens, as long as the secretary of state does not find any wrongdoing on the part of the directors such as to ban them from directorship, the company can be freely re-incorporated under the same name, and in the same day if desired.

it may also be interesting to note that companies with no assets at all can apply to be struck off the register rather than enter into receivership; this means the company simply ceases to exist.

Answer 8

It means if you bought something from them and it hasn't yet been delivered, you just lost your money.

I worked for a work agency that went into administration and I lost £800 in wages. The company were collecting money but were not paying the agency staff other than the staff who worked in the agency.

If you get your money back or part of it, consider yourself very lucky.

Answer 9

Yes same thing- about to enter bankruptcy

Answer 10

The step before bankruptcy, yes.