Entering Administration means directors have to relinquish control of their Company. They may face redundancy through the sale of the business to a 3rd party.
The selling off of Company assets to third parties.
After instigating, Administration is a process that becomes publicly available information. Most notably, the informing of Creditors and any correspondence including the Company website, emails and purchase orders must state the Company is in Administration.
During the life of Administration, the raising of all purchase orders must go through the approval of the Administrator.
There must be an advertisement of the appointment of an Administrator in the London Gazette and local/national newspaper.
Any Creditor holding a qualifying floating charge (often a factoring Company or bank) can appoint an Administrator of their choosing.
The costs associated with Administration can be high and escalate very quickly if trading the Company.
All the business and assets may be sold to the current owners/directors or a 3rd party. In this case, the current employees may transfer to another entity under TUPE (transfer of undertaking) laws.
This can cause problems especially if the Company needs to cut employment costs to ensure future survival