Liquidation or Administration

So what is the difference between Liquidation and Administration? On the surface both are winding up procedures for a company however they are very different and Administration can save your business. As Liquidators and licensed Insolvency Practitioners we come across this question a lot, should we be looking at Liquidation or Administration. Both Liquidation and Administration are insolvency procedures, Liquidation usually means the end of a company trading, however administration looks at ways of repaying debts without the company going into liquidation however liquidation can be a consequence of administration if there are a lot of debts. Good Business insolvency advice can give you a good idea on what you need and how you can move forward.


Liquidation is usually when the company ceases trading and in most cases assets are released to pay debts, this can be Compulsory Liquidation, Creditors’Voluntary Liquidation or Members Voluntary Liquidation, the latter being used to close down a solvent company that no longer is needed. If a company goes into Liquidation they will cease trading during the process until the company is wound up.  


Administration can be used to save a business or company, if a company goes into administration they can continue to trade and sell the business as a concern, the sale of the company and possibly some assets can be used to pay off creditors and some shareholders. Administration can also be used to sell some assets but with the right advice and help can sometimes save the company under the same management. Sometimes a company needs good business advice from business recovery specialists but it is important to get this advice early as if you leave it too late there may be no other option but to wind up your company, Lines Henry can help you decide what you need and what options are available to you.

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