McLenan Corporate


The administration process is well known as one of the most effective ways of providing a breathing space to allow a company to either trade out of its current financial difficulties, or to allow restructuring to take place.

What is Administration?

Administration is a formal insolvency process that is used specifically to assist in either a rescue of the Company itself, or its underlying business. The process is undertaken by a qualified insolvency practitioner, who oversees the formal process, the aim of which is to rescue and restore, insolvent but potentially viable companies. On appointment an administrator becomes an officer of the court.

How is Administration different to Insolvent Liquidation?

The administration process is usually reserved for rescuing a Company or its business whilst an insolvent liquidation is usually used where there is no possibility of rescuing the company and the best outcome for the creditors is to wind up the business. In both an administration process and insolvent liquidation, the appointed insolvency practitioner is under a duty to maximise the company’s assets for the benefit of its creditors.

An administrator’s main objective is rescuing the company as a going concern, or achieving a better result for the company’s creditors as a whole than would be likely if the company were wound up (without first being in administration), or realising property in order to make a distribution to one or more secured or preferential creditors. The liquidator’s main objective is to secure the assets of the company and ensure that they are realised and distributed to the company’s creditors and, if there is any surplus, to the company’s shareholders.

Who appoints an Administrator?

An administrator may be appointed by the court, by the holder of a floating charge or by the company or its directors. A floating charge is a form of security often held by banks or other lenders.

A creditor of the Company who holds the relevant security, often referred to as a floating charge holder and usually a Bank or other lender, has the right to appoint an administrator over a company, with or without the directors’ consent. However, that is relatively uncommon, normally they will request that the directors make the appointment. It is recommended that with the help of a qualified insolvency practitioner, the floating charge holder is brought into the appointment process as early as possible as they may be willing to help the company or support the business through a sale to a new company, if this is likely to result in a better outcome.

If the directors do decide to appoint an Administrator any holder of a floating charge is entitled to five days clear notice of such an application.

How do I know if an administration is suitable process for my company?

If your company is facing financial challenges, then you need to speak with a qualified insolvency practitioner as soon as possible. The sooner you take advice, the better chance you have of rescuing your business.

An administration procedure will not always be suitable, especially if the business is not viable going forward. A qualified insolvency practitioner will provide you with the advice that you need and will discuss all the options that are available to the Board of Directors. As part of that advice, they will determine if administration is an option for you to consider.

How can McLenan Corporate help me?

First and foremost, we are fully licensed insolvency practitioners, and this is what we specialise in.

We are not affiliated to any other organisation and therefore we are able to provide you with complete independent advice. We will always ensure that upon speaking with the directors of a company that we explore all the options that are available.

Our initial efforts will focus on keeping your business afloat. If this cannot be done, we will determine whether administration is a suitable process.

We will work closely with you to understand your business in its entirety before providing you with any recommendations. In times of financial pressure, we understand the uncertainty and issues that are being faced, so here at McLenan Corporate, we provide all our initial advice and guidance free of charge.

Only in the event of formal instruction will we begin to charge fees and these will be agreed with the client in writing, before any work is commenced and given that our professional charges are very competitive, we are in a position to provide the necessary help that you need.

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1 Union Street
Saltcoats KA21 5LL

McLenan Corporate is a trading name of McLenan Corporate Solutions Limited, 1 Union Street Saltcoats KA21 5LL. Company Number SC651445.

Margo McLenan is licensed to act as Insolvency Practitioner in the UK by the Insolvency Practitioner Association.

Insolvency Practitioners are bound by the Code of Ethics when carrying out all professional work relating to an insolvency appointment.