Administration (insolvency)

Administration (insolvency)

Administration is a procedure under the insolvency laws of a number of common law jurisdictions which functions as a rescue mechanism for insolvent companies and allows them to carry on running their business. The process — an alternative to liquidation — is often known as going into administration.

United Kingdom

In United Kingdom law, the administration regime is governed by the Insolvency Act 1986, as amended by the Enterprise Act 2002. An Administrator can be appointed by the holder of a floating charge (created since 15 September 2003) or by the company or by its directors without petitioning the court. Other creditors must petition the court to appoint an administrator. The administrator must act in the interests of all the creditors and attempt to rescue the company as a going concern. If this proves impossible he must work to maximise the recovery of the creditors as a whole. Only then may the administrator attempt to realise property in favour of one or more secured creditor. Administration is analogous to going into "Chapter 11" in the United States, although there are certain key differences, including the fact that the administrator usually controls the company, not the directors.

The administrator is an officer of the court and an agent of the company. He is not personally liable for any contracts he makes on behalf of the company. He has the power to do anything necessary or expedient for the management of the affairs, business and property of the company.

The new administration regime introduced by the Enterprise Act 2002 replaces receivership. This regime allowed the holder of a floating charge to appoint an administrative receiver to realise assets in his favour.contradict|date=October 2008 This was felt to be too favourable to the floating charge holder at the expense of other creditors. Holders of a floating charge created prior to 15 September 2003 retain their right to appoint an administrative receiver, but all purported rights to do so created after that date will be construed as rights to appoint an administrator (subject to certain specific, rare exceptions).

Australia

In Australian law, Administrators cannot be appointed by the Court and are a personal appointment by the director/s of the company. There are many insolvency hotlines to assist with the right strategies for directors.

Administrators are personally liable for debt incurred and were as asset is used or in the possession of an Administrator. There is a 7 day free period which is window of opportunity to determine which assets are required to run the business.

Secured Creditors have a 10 day Decision Period to enforce there security/ charge otherwise they will be precluded from enforcing their security during the administration.

Please note that there are currently legislative changes to the law on administrations and other forms of insolvency in Australia.

ee also

* Administration Order
* Administrative receivership
* Chapter 11, Title 11, United States Code


Wikimedia Foundation. 2010.

Игры ⚽ Нужен реферат?

Look at other dictionaries:

  • Administration — may refer to:In business * Administration (business), the performance or management of business operations. * Management, the act of directing people towards accomplishing a goal * Central Administration, the highest administrative department of… …   Wikipedia

  • Administration Order — In English and Welsh insolvency law, an Administration Order is a method used to protect a company experiencing short or medium term financial problems from its creditors. A court order is issued that forbids any form of legal or insolvency… …   Wikipedia

  • Administration (business) — Unreferenced|date=September 2008| caption= official names= administrator general manager type= employment activity sector= business corporations project management competencies= management skills formation= employment field=public and private… …   Wikipedia

  • Insolvency — means the inability to pay one s debts as they fall due. Usually used to refer to a business, insolvency refers to the inability of a company to pay off its debts. Business insolvency is defined in two different ways: Cash flow insolvency Unable… …   Wikipedia

  • administration — ad·min·is·tra·tion /əd ˌmi nə strā shən/ n 1: the act or process of administering the administration of justice 2 a: the management and disposal under court authority of the estate of a deceased person by an executor or an administrator b: the… …   Law dictionary

  • administration order — Under Part II of the Insolvency Act 1986, an administrator is appointed under Court order. He takes control of the company s affairs to achieve the primary purpose of allowing the company to recover from its financial difficulties and to be… …   Law dictionary

  • Administration (law) — As a legal concept, administration is a procedure under the insolvency laws of a number of common law jurisdictions. It functions as a rescue mechanism for insolvent entities and allows them to carry on running their business. The process – an… …   Wikipedia

  • Insolvency Act 1986 — The Insolvency Act 1986 (1986 c. 45) is the statutory legislation that provides the legal platform for all matters relating to personal and corporate insolvency in the UK. Elements of the act have been updated by the Enterprise Act 2002 which… …   Wikipedia

  • Insolvency law of Switzerland — The insolvency law of Switzerland is the law governing insolvency, foreclosure, bankruptcy and debt restructuring proceedings in Switzerland. It is principally codified in the Federal Statute on Debt Enforcement and Bankruptcy ( de. Bundesgesetz… …   Wikipedia

  • insolvency practitioner — A person authorized to undertake insolvency administration as a liquidator, provisional liquidator, administrator, administrative receiver, or nominee or supervisor under a voluntary arrangement. Insolvency practitioners must be members of an… …   Accounting dictionary

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”