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What happens when an Administrator is appointed and how are staff affected? Business Articles | June 26 Wholesale Xander Bogaerts Jersey , 2009 With the economic climate as it is currently an increasing number of companies are going into administration. I have spoken to more and more people recently who are employed by businesses where administration is happening or imminent. These people are understandably worried and want to understand what administration is and what it might mean for their personal situation.
What happens when an Administrator is appointed and how are staff affected?
Given the current economic climate, it is unfortunately to be expected that an ever greater number of companies are going into administration. I have spoken to a number of people recently who are employed by businesses where they are facing Administration. These people are quite concerned and want to understand what administration is and what it might mean for their personal situation.
If a company is facing Administration it means that there are serious problems affecting its survival. Usually the business will be in a position where it is struggling to pay the people it owes money (its creditors) and there is a risk that they may try to force the company to be closed. In this situation Wholesale David Ortiz Jersey , significant changes will normally be required for the company to survive.
It is normally the directors or shareholders who apply for Administration. However, the process could also be initiated by sympathetic creditors who want to see the business work so they have the best possible chance of being paid and many be trading with the business into the future.
The legal protection afforded by Administration gives a struggling company normally up to a year of breathing space from its creditors. During this time any legal action currently being taken against the business by its creditors is suspended Wholesale Jim Rice Jersey , for example any winding up petitions are cancelled. In addition, creditors cannot start any new actions against the business. The time given to the company while it is in administration is used to try and rescue the business by implementing changes which will make it viable again.
The Administration process must be agreed by the court. If the court agrees that the administration should take place an Insolvency Practitioner is appointed to manage the business. This person is called the administrator. The first job of the administrator is to analyse the business and determine what the options are. The changes that the administrator will suggest may be potentially significant and radical. These may for example include cost savings involving employee redundancy and or the sale of all or part of the business. If the administrator believes that the business is not viable Wholesale Ted Williams Jersey , they may recommend that it is closed in its entirety.
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