F1Part II Administration Orders
Making etc. of administration order
C1C29 Application for order.
C31
An application to the court for an administration order shall be by petition presented either by the company or the directors, or by a creditor or creditors (including any contingent or prospective creditor or creditors), F2or by the clerk of a magistrates’ court in the exercise of the power conferred by section 87A of the Magistrates’ Courts Act 1980 (enforcement of fines imposed on companies) or by all or any of those parties, together or separately.
2
Where a petition is presented to the court—
a
notice of the petition shall be given forthwith to any person who has appointed, or is or may be entitled to appoint, an administrative receiver of the company, and to such other persons as may be prescribed, and
b
the petition shall not be withdrawn except with the leave of the court.
3
Where the court is satisfied that there is an administrative receiver of the company, the court shall dismiss the petition unless it is also satisfied either—
a
that the person by whom or on whose behalf the receiver was appointed has consented to the making of the order, or
b
that, if an administration order were made, any security by virtue of which the receiver was appointed would—
F3i
be void against the administrator to any extent by virtue of the provisions of Part XII of the Companies Act 1985 (registration of company charges),
F3i
be liable to be released or discharged under sections 238 to 240 in Part VI (transactions at an undervalue and preferences),
F3ii
be avoided under section 245 in that Part (avoidance of floating charges), or
F3iii
be challengeable under section 242 (gratuitous alienations) or 243 (unfair preferences) in that Part, or under any rule of law in Scotland.
C4C54
Subject to subsection (3), on hearing a petition the court may dismiss it, or adjourn the hearing conditionally or unconditionally, or make an interim order or any other order that it thinks fit.
C6C75
Without prejudice to the generality of subsection (4), an interim order under that subsection may restrict the exercise of any powers of the directors or of the company (whether by reference to the consent of the court or of a person qualified to act as an insolvency practitioner in relation to the company, or otherwise).
10 Effect of application.
C8C91
During the period beginning with the presentation of a petition for an administration order and ending with the making of such an order or the dismissal of the petition—
a
no resolution may be passed or order made for the winding up of the company;
F4aa
no landlord or other person to whom rent is payable may exercise any right of forfeiture by peaceable re-entry in relation to premises let to the company in respect of a failure by the company to comply with any term or condition of its tenancy of such premises, except with the leave of the court and subject to such terms as the court may impose
C14C92
Nothing in subsection (1) requires the leave of the court—
a
for the presentation of a petition for the winding up of the company,
b
for the appointment of an administrative receiver of the company, or
c
for the carrying out by such a receiver (whenever appointed) of any of his functions.
3
Where—
a
a petition for an administration order is presented at a time when there is an administrative receiver of the company, and
b
the person by or on whose behalf the receiver was appointed has not consented to the making of the order,
the period mentioned in subsection (1) is deemed not begin unless and until that person so consents.
C14C94
References in this section and the next to hire-purchase agreements include conditional sale agreements, chattel leasing agreements and retention of title agreements.
C95
In the application of this section and the next to Scotland, references to execution being commenced or continued include references to diligence being carried out or continued, and references to distress being levied shall be omitted.
C15C1611 Effect of order.
1
On the making of an administration order—
a
any petition for the winding up of the company shall be dismissed, and
b
any administrative receiver of the company shall vacate office.
C17C182
Where an administration order has been made, any receiver of part of the company’s property shall vacate office on being required to do so by the administrator.
C193
During the period for which an administration order is in force—
a
no resolution may be passed or order made for the winding up of the company;
b
no administrative receiver of the company may be appointed;
F5ba
no landlord or other person to whom rent is payable may exercise any right of forfeiture by peaceable re-entry in relation to premises let to the company in respect of a failure by the company to comply with any term or condition of its tenancy of such premises, except with the consent of the administrator or the leave of the court and subject (where the court gives leave) to such terms as the court may impose
C20C21c
no other steps may be taken to enforce any security over the company’s property, or to repossess goods in the company’s possession under any hire-purchase agreement, except with the consent of the administrator or the leave of the court and subject (where the court gives leave) to such terms as the court may impose; and
C22d
no other proceedings and no execution or other legal process may be commenced or continued, and no distress may be levied, against the company or its property except with the consent of the administrator or the leave of the court and subject (where the court gives leave) to such terms as aforesaid.
4
Where at any time an administrative receiver of the company has vacated office under subsection (1)(b), or a receiver of part of the company’s property has vacated office under subsection (2)—
a
his remuneration and any expenses properly incurred by him, and
b
any indemnity to which he is entitled out of the assets of the company.
shall be charged on and (subject to subsection (3) above) paid out of any property of the company which was in his custody or under his control at that time in priority to any security held by the person by or on whose behalf he was appointed.
5
Neither an administrative receiver who vacates office under subsection (1)(b) nor a receiver who vacates office under subsection (2) is required on or after so vacating office to take any steps for the purpose of complying with any duty imposed on him by section 40 or 59 of this Act (duty to pay preferential creditors).
C23C2412 Notification of order.
1
Every invoice, order for goods or business letter which, at a time when an administration order is in force in relation to a company, is issued by or on behalf of the company or the administrator, being a document on or in which the company’s name appears, shall also contain the administrator’s name and a statement that the affairs, business and property of the company are being managed by the administrator.
2
If default is made in complying with this section, the company and any of the following persons who without reasonable excuse authorises or permits the default, namely, the administrator and any officer of the company, is liable to a fine.
Pt. 2 (s. 8) substituted (15.9.2003) for Pt. 2 (ss. 8-27) by Enterprise Act 2002 (c. 40), ss. 248(1), 279 (with savings for special administration regimes in s. 249(1)-(3)(6) and further savings in S.I. 2003/2093, art. 3); S.I. 2003/2093, art. 2(1), Sch. 1 (subject to arts. 3-8 (as amended by S.I. 2003/2332, art. 2)).
Pt. 2 as saved by 2002 c. 40, s. 249 or S.I. 2003/2093, art. 3 modified by Water Industry Act 1991 (c. 56), Sch. 3 (as amended (26.5.2015) by Deregulation Act 2015 (c. 20), s. 115(3)(r), Sch. 23 para. 28(4)(e)); modified (1.4.1994) by Railways Act 1993 c. 43, ss. 59-62, 150(1)(c), Sch. 6 and S.I. 1994/571, art. 5 (with a transitional provision in art. 7); applied (with modifications) (1.12.1997) by Building Societies Act 1986 (c. 53), Sch. 15A (as inserted by 1997 c. 32, s. 39(2), Sch. 6 para. 1(2)(a) and S.I. 1997/2668, art. 2, Sch. Pt. I(i)); modified (1.2.2001) by Transport Act 2000 (c. 38), ss. 27-30, Sch. 1; modified (15.7.2003) by Greater London Authority Act 1999 (c. 29), ss. 220-223, 425(2), Sch. 14 (with Sch. 12 para. 9(1)) and S.I. 2003/1920, art. 2; excluded (26.12.2003) by S.I. 2003/3226, reg. 8(3)(4); applied (with modifications) and modified in part (28.11.2005) by S.I. 2005/3050, regs. 4, 14, 20, Sch. 3 paras. 1(a), 2 (with Sch. 4); applied and amended in part (30.11.2007) by S.I. 2007/3141, rules 3, 13(4), 18(1); amended (6.4.2008) by S.I. 2008/948, art. 3(1), Sch. 1 para. 101 (with arts. 6, 11 and 12); amended in part (1.10.2009) by S.I. 2009/1941, arts. 2(1), 8, Sch. 1 para. 73(1)(2)(a)(b)(3) (with Sch. 1 para. 84); amended (1.10.2009) by S.I. 2009/1972, reg. 7(a); modified in part (26.5.2015) by Deregulation Act 2015 (c. 20), s. 115(3)(n), Sch. 6 para. 25; amended (31.12.2020) by S.I. 2019/146, reg. 1(3), Sch. para. 45(2) (with regs. 4, 5); 2020 c. 1, Sch. 5 para. 1(1)