Voluntary Administration

Struggling with debts? Voluntary Administration provides a pathway to recovery and restructuring for your business.

THE BASICS

What is Voluntary Administration (VA)?

Voluntary Administration (VA) is an insolvency procedure designed to assist struggling companies in managing their debts and reorganising their affairs.

It allows businesses in financial distress to appoint an independent administrator to assess their situation and develop a plan to either restructure or wind up the business.

This process aims to maximise the chances of saving the company while ensuring that creditors are treated fairly.

It is often implemented as a way to salvage the company and prevent liquidation and total losses for You, the business owner, creditors, and employees.

Who benefits from VA?



The Struggling Company

Businesses facing insolvency or financial difficulties can use VA to address their issues while retaining some control over their operations.



Creditors

VA provides a structured process for dealing with debts, allowing creditors to recover a portion of what they are owed, rather than facing potential total loss through liquidation.



Employees

By facilitating a potential restructuring, VA can help preserve jobs that might otherwise be lost if the company were to enter liquidation.



Shareholders

While shareholders may still face losses, VA offers a chance to salvage the business and potentially retain some value.

BENEFITS OF VOLUNTARY ADMINISTRATION

How a VA helps your business

Voluntary administration is a valuable tool for companies facing financial challenges, offering a structured pathway to potential recovery.

By virtue of this structure, a framework of clarity, trust, positive action and respect is created. With this foundation, directors, creditors and administrators can work their way through the challenges and achieve great results.

Whether aiming to restructure debts or to ultimately wind down operations in a controlled manner, VA provides an opportunity for better outcomes in difficult circumstances.

The following points are critical to know about Voluntary Administration:

You preserve some control and flexibility

Unlike liquidation, where control passes to a liquidator, voluntary administration allows the company’s directors to retain some control over the process.

They work alongside the administrator to propose a plan for recovery, giving them a chance to influence the outcome.

It's a fast process with quick results

VA is time-critical. The administrator must convene the creditors’ meeting within eight business days of their appointment.

This urgency allows for swift action to address financial distress, reducing the risk of further deterioration.

Includes a Moratorium on Debt Recovery

Upon the appointment of an administrator, a moratorium is placed on creditors taking legal action against the company.

This provides crucial breathing space for the business to restructure without the immediate pressure of debt recovery actions.

VA aims to rescue your business

The primary aim of voluntary administration is to facilitate a turnaround for the business. If successful, it can lead to a more sustainable operation, preserving jobs and potentially increasing returns for creditors compared to liquidation.

VA can increase creditor confidence

The structured nature of VA can enhance creditors’ confidence in the process. Knowing there is a formal procedure in place can lead to a more cooperative environment, which can facilitate negotiations and compromise agreements.

Our transparency fosters trust

Administrators are required to maintain transparency throughout the process.

They must report to creditors and provide regular updates on the company’s financial position and the proposed restructuring plan.

This openness fosters trust and allows creditors to make informed decisions.

Don’t wait for problems to escalate – let’s discuss your options.

Work with us to explore the ways we can turn things around.

Get in touch with Halo Advisory

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A STRONGER FOOTING

Small Business Restructure

By restructuring your company, we satisfy creditors, prevent insolvency, and steer your business towards a brighter future.

WHEN IT’S TIME TO CLOSE

Creditors Voluntary Liquidation

The CVL process winds down the company when it is insolvent, cannot pay its debts as they fall due, and/or if other options are not available.

A PATH TO MASTERY

Corporate Advisory

You can always be better at business. With our specialists on your team, we can highlight best practices, and share invaluable ways to improve your business.