An administration procedure offers benefits that can help a business to deal with the immediate financial challenges and become profitable again.
It can be the case that a limited company is a viable economic entity, but finds itself unable to meet liabilities temporarily because time is needed to restructure debt or reorganise trading activities. Equally, part or all of the underlying business may well be sustainable and can be sold on as a going concern in order to avoid formal insolvency proceedings incepting.
A significant benefit is the moratorium period that provides protection from creditor action, and enables the administrator to rescue the business without being diverted by creditor action.
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