Administration Pre Pack

Saturday, January 14th, 2012 at 0

What is a Administration Pre Pack?

Most people have heard of businesses going into administration. This is when an appointed administrator holds the decision on whether the business is able to carry on or whether the assets should be liquidated. In some instances the company is able to continue as a going concern.

However there is another form of administration which is known as a pre-pack administration. In this situation an agreement is made to save the existing business. If you think your business might benefit from this move, you should find out as much as you can about administration pre pack before you do anything else.

Is it true that a business can continue in a administration Pre-Pack process?

Yes this can happen. It is perfectly legal and it means the business can continue in the hands of a third party. This could be someone who is completely unrelated to the business, or in certain circumstances a new company can be formed by the directors of the existing company. This might sound unusual but it is legal and encouraged in certain instances because it keeps the company afloat.

So a prepack administration could save the jobs of those working for the company?

Yes it can, and this is one of the reasons why this avenue should always be considered if your company is in financial trouble. Of course it is important to ensure you get practical advice in every case; you may not be in a position to create a pre-packaged administration to solve the problem.

Any business in this kind of situation is likely to be facing threats from creditors who have yet to be paid as agreed. A administration pre-pack can ward off these threats, whereas the alternative is to wind up the company and let it go under. By triggering the pre-pack option you can not only save your business and keep it afloat, you can also protect it, keep it trading and keep people in jobs.

It is vital though to remember that you have a duty to try and pay back your creditors. A prepack agreement of this nature should not be seen as an easy way out. In fact there are precise stipulations that surround this situation, which is why professional advice is always advisable if your company is in financial trouble and you are considering your options. Finding the right solution is always the best course of action.

Administration Pre-Pack Helpline 0800 24 0800

To find out more Watch the short video below about Administration Pre Pack