When we carry out our detailed financial review of a company’s position – sometimes a trading administration becomes the best option.
It gives the business the best chance of being purchased by being able to prove it can function well while in administration.
Not only does it maintain the company’s reputation, it can also help hold its market value and obtain a better deal for creditors.
An administrator remains in day-to-day charge of the company and even if it continues to trade they may have to make some hard decisions when it comes to saving money including selling assets, restructuring debt and obligations, and even potentially making redundancies.
The ultimate aim of the administrator is always to protect the interests of creditors and sell the company, not run it as a hobby. When appointed they have an end goal and if a trading administration is the best option towards realising that then it will be the chosen method.
What are the benefits?
- Best chance of a business retaining value and being a more attractive selling proposition
- The directors can retain control of the company and use their ability to trade their way back to prosperity
- Like any administration, the company is protected from legal action by creditors including HMRC
- Administrations are publicly advertised in the London Gazette so customers and creditors will know about it
- Any secured lenders, such as banks, may be able to choose their own administrator to oversee affairs
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