When a company enters administration, it is granted a temporary moratorium. A moratorium can be seen as a legal ringfence which is placed around the company, preventing creditors from initiating litigation proceedings. This can give a company valuable breathing space allowing for a plan to be formulated by the appointed administrators.
It is often the case that when companies get to the stage of needing to be placed into administration, that legal action has already commenced or has been threatened. The moratorium immediately eases pressure and ensures the next step for the company can be carefully considered rather than being pressured into making a decision which may not be right for the company or its creditors.
A company cannot remain in administration indefinitely, however, there is not one sole route out of administration.
A pre-packaged – or pre-pack – administration process involves the sale of a company to either a connected or unconnected party.
A company going into administration does not necessarily mean that the business will cease to exist; in fact, rescuing the company as a going concern is often the main objective.
At UK Liquidators, our service is fully partner-led and your case will always be overseen by a fully licensed insolvency practitioner.
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If you are considering liquidation for your company, taking expert advice at an early stage is crucial. At UK Liquidators, our team of licensed insolvency practitioners are committed to providing limited company directors with the help and advice they need to make an informed decision.
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