What happens to me if the company goes into administration?

Published on : 2nd March, 2021 | Updated on : 18th October, 2023

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What Does Going Into Administration Mean?

Written ByGary Weber

Turnaround & Insolvency Manager (South)

Gary has been with KSA since late 2010 and is now overseeing the work of all our Regional Managers as well as covering his own patch of the South East. He is passionate about helping companies having been an owner and a director of a number of businesses in industries including pubs, catering, road haulage, and retail. Gary drives our rescue work throughout central and west London, Surrey, W.Sussex, Berks., Bucks. and Oxon.

Gary Weber

Can I be a director of a company in the future if this company goes into administration?
If I have provided personal guarantees will these be called in if the company goes into administration?
Will I be disqualified as a director is our company goes into administration?

What happens to me if the company goes into administration?

Answering simply, nothing. However, as a director of the insolvent company, if you have not acted properly, as you go through the insolvency process, you may face personal issues in the future.

When administrators are appointed then the directors’ powers cease. They are still responsible for their previous actions though. Usually the administrators will either sell the business quickly or if they trade the company in administration they will make the directors redundant as employees. So you will be sent home.

Can I be a director of a company in the future if this company goes into administration?

Yes, you can be a director of as many companies as you would like. You may be part of a new company that is going to buy the business from the administrators. In which case you must get personal legal advice on conflicts of interest.

Make sure that the company name is acquired before re-using it. And it is obvious, what you shouldn’t do is to act irresponsibly when acting as a director of the old company and then set up another company and do the same silly things again.

Facts:

The law requires directors to keep up-to-date financial information and to understand the financial position of the company. If you fail to do this, legal action may be faced by a future administrator or liquidator.
Taking cash out of the company as drawings (not dividends) means that you owe the company money. This becomes an asset, a debtor and the administrators or future liquidators must collect that money or do a deal.

If I have provided personal guarantees will these be called in if the company goes into administration?

The answer is yes. It is very likely that if the company enters into administration, if you have provided security for company debts in the form of a personal guarantee , then this may be called in. If you’re in any doubt about this please call us . We can help directors with any related problems or queries.

Will I be disqualified as a director is our company goes into administration?

NO – as long as you have acted suitably, rapidly and responsibly . If you haven’t, and you knew the company was in serious financial difficulty then YES you may be disqualified…Take back control and protect yourself by asking for expert free help today! – call 0800 9700539

By failing to act and making creditors debts worse or running the company’s cash down to £0 to pay yourself, when other creditors are not being paid; likewise if you are taking some of the firms assets which do not belong to you, legal action by the future liquidator may be faced. But to do that, you would have to be extremely silly!

If you are thinking that the business will soon run out of cash then you must take advice now. Take back control and call us on (0800) 970 0539

Edinburgh Based Hickory Goes Into Administration

6th December, 2024 in A guide for redundant employees in administration or insolvency situations Hospitality

Hickory, a Scottish catering and hospitality firm, has gone into administration, with a 100 Jobs at risk.Hickory, a restaurant founded in 2012 in Edinburgh, caters for special occasions including weddings and private and business gatherings. Additionally, it serves festivals like the Scottish Open, Borders Book Festival, and Royal Highland Show.The company entered administration on November 20th, according to documents filed with Companies House. Opus Restructuring & Insolvency has been appointed, and Mark Harper and Charles Turner are currently investigating the options available to Hickory and its creditors.Like many other hospitality businesses the company has had difficulty recovering from the lockdowns in the UK during the Covid pandemic. According to its most recent records submitted to Companies House, the company had an average of 142 employees in 2023.As a result, there was a period of weak trading and margins, and working capital was severely strained. This resulted from the cost of living crises, rising interest rates, and inflation.Last year's turnover was £5.6 million, however a number of cash flow issues led to the decision to hire administrators.In its most recent financial statements, Hickory reported that its debtors owed £2.5 million within a year, up from £1 million the year before. The amount of trade creditors increased from £560,000 to £1.1 million.Harper said: “We are working closely with the directors and a number of stakeholders to ensure continuity of the forthcoming events.” This includes weddings, charity balls and staff parties.The hospitality industry is reeling from the aftershocks of the pandemic and the war in Ukraine. The latest rises for employers national insurance has meant confidence in the industry is at a low ebb.

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Edinburgh Based Hickory Goes Into Administration

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What happens to me if the company goes into administration?

Table of Contents

Can I be a director of a company in the future if this company goes into administration?

If I have provided personal guarantees will these be called in if the company goes into administration?

Will I be disqualified as a director is our company goes into administration?

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