A Guide to Notice of Intention for Appointing an Administrator
A notice to appoint an administrator is a document that is filed in court telling the courts that the company intends to go into administration. This is often used as a way of restructuring a failing business to stop it from being liquidated. It can also be used as part of the pre-pack administration process.
As soon as the notice is filed at court, it creates an immediate moratorium around the company. The moratorium lasts for ten business days. During the moratorium, the company’s creditors cannot take legal action or continue with existing legal proceedings against the company without the court’s permission.
This is the form that is used to notify the courts that the company intends to appoint an administrator. You can see a downloadable version of the Form 2.8B here.
The notice must be filled out and filed correctly. The form includes key information that must be completed, such as the name of the proposed administrator.
Unable to file an Appointment
The form outlines a number of situations where the notice of intention will not be accepted. The ones that are most likely to be relevant are that the company cannot have been in administration within the last twelve months, there must not currently be an administrative receiver in office and the company is not subject to a petition for winding up that has been presented but not yet disposed of.
The last is particularly pertinent for companies that are struggling as it means that if the company has received a petition to be wound up by a creditor that has not been withdrawn, they will not be able to put the company into administration and so can’t file a notice to appoint.
The notice needs to be filed with the court. At least five business days before filing the notice with the court, the company must notify certain parties: these include the holders of any qualifying floating charges, any person entitled to appoint an administrative receiver and any supervisor of a voluntary arrangement. If the holder of the qualifying floating charge objects to the appointment that is being proposed, they have the right to appoint their own but this is a rare occurrence.
Who can Appoint?
The shortest answer to this question is the company, its directors and the holder of a qualifying floating charge over the company’s assets. Read here for more information on who can appoint an the process.
It’s also the directors and holder of a qualifying floating charge who are able to file the notice of intention with the courts.
If the company hasn’t made an appointment after the ten (business) day moratorium period, it can apply to the courts for an extension of the moratorium. It will need to provide reasons for the application, for example, it’s currently negotiating a sale of the company to a third party. Bear in mind that numerous applications to extend the moratorium are highly likely to be unsuccessful.
Want to Talk?
If you are considering putting your company into administration and want to talk to someone for a no obligation chat, call us 08000 746 757. Alternatively, you can use the Live Chat function on the bottom right-hand side of the screen.