Office of Public Sector Information
Sections 238 and 243
Parts 2, 3, 4, 5, 6, 7, 8 and 11 of the Fair Trading Act 1973 (c. 41).
Trade Descriptions Act 1968 (c. 29).
Prices Act 1974 (c. 24).
Consumer Credit Act 1974 (c. 39).
Estate Agents Act 1979 (c. 38).
Competition Act 1980 (c. 21).
Consumer Protection Act 1987 (c. 43).
Property Misdescriptions Act 1991 (c. 29).
Timeshare Act 1992 (c. 35).
Competition Act 1998 (c. 41).
Chapter 3 of Part 10 and Chapter 2 of Part 18 of the Financial Services and Markets Act 2000 (c. 8).
An order made under section 95 of that Act.
Section 241
Gun Barrel Proof Act 1868 (cap 113).
Gun Barrel Proof Act 1950 (cap 3).
Trade Descriptions Act 1968.
Unsolicited Goods and Services Act 1971 (c. 30).
Fair Trading Act 1973.
Hallmarking Act 1973 (c. 43).
Prices Act 1974.
Consumer Credit Act 1974.
Gun Barrel Proof Act 1978 (c. 9).
Estate Agents Act 1979.
Competition Act 1980.
National Audit Act 1983 (c. 44).
Telecommunications Act 1984 (c. 12).
Companies Act 1985 (c. 6).
Weights and Measures Act 1985 (c. 72).
Airports Act 1986 (c. 31).
Gas Act 1986 (c. 44).
Financial Services Act 1986 (c. 60).
Consumer Protection Act 1987 (c. 43).
Copyright, Designs and Patents Act 1988 (c. 48).
Water Act 1989 (c. 15).
Electricity Act 1989 (c. 29).
Courts and Legal Services Act 1990 (c. 41).
Broadcasting Act 1990 (c. 42).
Property Misdescriptions Act 1991 (c. 29).
Water Industry Act 1991 (c. 56).
Water Resources Act 1991 (c. 57).
Statutory Water Companies Act 1991 (c. 58).
Land Drainage Act 1991 (c. 59).
Timeshare Act 1992 (c. 35).
Railways Act 1993 (c. 43).
Coal Industry Act 1994 (c. 21).
Trade Marks Act 1994 (c. 26).
Gas Act 1995 (c. 45).
Broadcasting Act 1996 (c. 55).
Competition Act 1998 (c. 41).
Financial Services and Markets Act 2000 (c. 8).
Government Resources and Accounts Act 2000 (c. 20).
Postal Services Act 2000 (c. 26).
Utilities Act 2000 (c. 27).
Part 1 of the Transport Act 2000 (c. 38).
Section 248
| Nature of administration | Paragraphs 1 to 9 |
| Appointment of administrator by court | Paragraphs 10 to 13 |
| Appointment of administrator by holder of floating charge | Paragraphs 14 to 21 |
| Appointment of administrator by company or directors | Paragraphs 22 to 34 |
| Administration application: special cases | Paragraphs 35 to 39 |
| Effect of administration | Paragraphs 40 to 45 |
| Process of administration | Paragraphs 46 to 58 |
| Functions of administrator | Paragraphs 59 to 75 |
| Ending administration | Paragraphs 76 to 86 |
| Replacing administrator | Paragraphs 87 to 99 |
| General | Paragraphs 100 to 116 |
1 (1) For the purposes of this Act “administrator” of a company means a person appointed under this Schedule to manage the company’s affairs, business and property.
(2) For the purposes of this Act—
(a) a company is “in administration” while the appointment of an administrator of the company has effect,
(b) a company “enters administration” when the appointment of an administrator takes effect,
(c) a company ceases to be in administration when the appointment of an administrator of the company ceases to have effect in accordance with this Schedule, and
(d) a company does not cease to be in administration merely because an administrator vacates office (by reason of resignation, death or otherwise) or is removed from office.
2 A person may be appointed as administrator of a company—
(a) by administration order of the court under paragraph 10,
(b) by the holder of a floating charge under paragraph 14, or
(c) by the company or its directors under paragraph 22.
3 (1) The administrator of a company must perform his functions with the objective of—
(a) rescuing the company as a going concern, or
(b) achieving a better result for the company’s creditors as a whole than would be likely if the company were wound up (without first being in administration), or
(c) realising property in order to make a distribution to one or more secured or preferential creditors.
(2) Subject to sub-paragraph (4), the administrator of a company must perform his functions in the interests of the company’s creditors as a whole.
(3) The administrator must perform his functions with the objective specified in sub-paragraph (1)(a) unless he thinks either—
(a) that it is not reasonably practicable to achieve that objective, or
(b) that the objective specified in sub-paragraph (1)(b) would achieve a better result for the company’s creditors as a whole.
(4) The administrator may perform his functions with the objective specified in sub-paragraph (1)(c) only if—
(a) he thinks that it is not reasonably practicable to achieve either of the objectives specified in sub-paragraph (1)(a) and (b), and
(b) he does not unnecessarily harm the interests of the creditors of the company as a whole.
4 The administrator of a company must perform his functions as quickly and efficiently as is reasonably practicable.
5 An administrator is an officer of the court (whether or not he is appointed by the court).
6 A person may be appointed as administrator of a company only if he is qualified to act as an insolvency practitioner in relation to the company.
7 A person may not be appointed as administrator of a company which is in administration (subject to the provisions of paragraphs 90 to 97 and 100 to 103 about replacement and additional administrators).
8 (1) A person may not be appointed as administrator of a company which is in liquidation by virtue of—
(a) a resolution for voluntary winding up, or
(b) a winding-up order.
(2) Sub-paragraph (1)(a) is subject to paragraph 38.
(3) Sub-paragraph (1)(b) is subject to paragraphs 37 and 38.
9 (1) A person may not be appointed as administrator of a company which—
(a) has a liability in respect of a deposit which it accepted in accordance with the Banking Act 1979 (c. 37) or 1987 (c. 22), but
(b) is not an authorised deposit taker.
(2) A person may not be appointed as administrator of a company which effects or carries out contracts of insurance.
(3) But sub-paragraph (2) does not apply to a company which—
(a) is exempt from the general prohibition in relation to effecting or carrying out contracts of insurance, or
(b) is an authorised deposit taker effecting or carrying out contracts of insurance in the course of a banking business.
(4) In this paragraph—
“authorised deposit taker” means a person with permission under Part IV of the Financial Services and Markets Act 2000 (c. 8) to accept deposits, and
“the general prohibition” has the meaning given by section 19 of that Act.
(5) This paragraph shall be construed in accordance with—
(a) section 22 of the Financial Services and Markets Act 2000 (classes of regulated activity and categories of investment),
(b) any relevant order under that section, and
(c) Schedule 2 to that Act (regulated activities).
10 An administration order is an order appointing a person as the administrator of a company.
11 The court may make an administration order in relation to a company only if satisfied—
(a) that the company is or is likely to become unable to pay its debts, and
(b) that the administration order is reasonably likely to achieve the purpose of administration.
12 (1) An application to the court for an administration order in respect of a company (an “administration application”) may be made only by—
(a) the company,
(b) the directors of the company,
(c) one or more creditors of the company,
(d) the justices' chief executive for a magistrates' court in the exercise of the power conferred by section 87A of the Magistrates' Courts Act 1980 (c. 43) (fine imposed on company), or
(e) a combination of persons listed in paragraphs (a) to (d).
(2) As soon as is reasonably practicable after the making of an administration application the applicant shall notify—
(a) any person who has appointed an administrative receiver of the company,
(b) any person who is or may be entitled to appoint an administrative receiver of the company,
(c) any person who is or may be entitled to appoint an administrator of the company under paragraph 14, and
(d) such other persons as may be prescribed.
(3) An administration application may not be withdrawn without the permission of the court.
(4) In sub-paragraph (1) “creditor” includes a contingent creditor and a prospective creditor.
13 (1) On hearing an administration application the court may—
(a) make the administration order sought;
(b) dismiss the application;
(c) adjourn the hearing conditionally or unconditionally;
(d) make an interim order;
(e) treat the application as a winding-up petition and make any order which the court could make under section 125;
(f) make any other order which the court thinks appropriate.
(2) An appointment of an administrator by administration order takes effect—
(a) at a time appointed by the order, or
(b) where no time is appointed by the order, when the order is made.
(3) An interim order under sub-paragraph (1)(d) may, in particular—
(a) restrict the exercise of a power of the directors or the company;
(b) make provision conferring a discretion on the court or on a person qualified to act as an insolvency practitioner in relation to the company.
(4) This paragraph is subject to paragraph 39.
14 (1) The holder of a qualifying floating charge in respect of a company’s property may appoint an administrator of the company.
(2) For the purposes of sub-paragraph (1) a floating charge qualifies if created by an instrument which—
(a) states that this paragraph applies to the floating charge,
(b) purports to empower the holder of the floating charge to appoint an administrator of the company,
(c) purports to empower the holder of the floating charge to make an appointment which would be the appointment of an administrative receiver within the meaning given by section 29(2), or
(d) purports to empower the holder of a floating charge in Scotland to appoint a receiver who on appointment would be an administrative receiver.
(3) For the purposes of sub-paragraph (1) a person is the holder of a qualifying floating charge in respect of a company’s property if he holds one or more debentures of the company secured—
(a) by a qualifying floating charge which relates to the whole or substantially the whole of the company’s property,
(b) by a number of qualifying floating charges which together relate to the whole or substantially the whole of the company’s property, or
(c) by charges and other forms of security which together relate to the whole or substantially the whole of the company’s property and at least one of which is a qualifying floating charge.
15 (1) A person may not appoint an administrator under paragraph 14 unless—
(a) he has given at least two business days' written notice to the holder of any prior floating charge which satisfies paragraph 14(2), or
(b) the holder of any prior floating charge which satisfies paragraph 14(2) has consented in writing to the making of the appointment.
(2) One floating charge is prior to another for the purposes of this paragraph if—
(a) it was created first, or
(b) it is to be treated as having priority in accordance with an agreement to which the holder of each floating charge was party.
(3) Sub-paragraph (2) shall have effect in relation to Scotland as if the following were substituted for paragraph (a)—
“(a) it has priority of ranking in accordance with section 464(4)(b) of the Companies Act 1985 (c. 6),”.
16 An administrator may not be appointed under paragraph 14 while a floating charge on which the appointment relies is not enforceable.
17 An administrator of a company may not be appointed under paragraph 14 if—
(a) a provisional liquidator of the company has been appointed under section 135, or
(b) an administrative receiver of the company is in office.
18 (1) A person who appoints an administrator of a company under paragraph 14 shall file with the court—
(a) a notice of appointment, and
(b) such other documents as may be prescribed.
(2) The notice of appointment must include a statutory declaration by or on behalf of the person who makes the appointment—
(a) that the person is the holder of a qualifying floating charge in respect of the company’s property,
(b) that each floating charge relied on in making the appointment is (or was) enforceable on the date of the appointment, and
(c) that the appointment is in accordance with this Schedule.
(3) The notice of appointment must identify the administrator and must be accompanied by a statement by the administrator—
(a) that he consents to the appointment,
(b) that in his opinion the purpose of administration is reasonably likely to be achieved, and
(c) giving such other information and opinions as may be prescribed.
(4) For the purpose of a statement under sub-paragraph (3) an administrator may rely on information supplied by directors of the company (unless he has reason to doubt its accuracy).
(5) The notice of appointment and any document accompanying it must be in the prescribed form.
(6) A statutory declaration under sub-paragraph (2) must be made during the prescribed period.
(7) A person commits an offence if in a statutory declaration under sub-paragraph (2) he makes a statement—
(a) which is false, and
(b) which he does not reasonably believe to be true.
19 The appointment of an administrator under paragraph 14 takes effect when the requirements of paragraph 18 are satisfied.
20 A person who appoints an administrator under paragraph 14—
(a) shall notify the administrator and such other persons as may be prescribed as soon as is reasonably practicable after the requirements of paragraph 18 are satisfied, and
(b) commits an offence if he fails without reasonable excuse to comply with paragraph (a).
21 (1) This paragraph applies where—
(a) a person purports to appoint an administrator under paragraph 14, and
(b) the appointment is discovered to be invalid.
(2) The court may order the person who purported to make the appointment to indemnify the person appointed against liability which arises solely by reason of the appointment’s invalidity.
22 (1) A company may appoint an administrator.
(2) The directors of a company may appoint an administrator.
23 (1) This paragraph applies where an administrator of a company is appointed—
(a) under paragraph 22, or
(b) on an administration application made by the company or its directors.
(2) An administrator of the company may not be appointed under paragraph 22 during the period of 12 months beginning with the date on which the appointment referred to in sub-paragraph (1) ceases to have effect.
24 (1) If a moratorium for a company under Schedule A1 ends on a date when no voluntary arrangement is in force in respect of the company, this paragraph applies for the period of 12 months beginning with that date.
(2) This paragraph also applies for the period of 12 months beginning with the date on which a voluntary arrangement in respect of a company ends if—
(a) the arrangement was made during a moratorium for the company under Schedule A1, and
(b) the arrangement ends prematurely (within the meaning of section 7B).
(3) While this paragraph applies, an administrator of the company may not be appointed under paragraph 22.
25 An administrator of a company may not be appointed under paragraph 22 if—
(a) a petition for the winding up of the company has been presented and is not yet disposed of,
(b) an administration application has been made and is not yet disposed of, or
(c) an administrative receiver of the company is in office.
26 (1) A person who proposes to make an appointment under paragraph 22 shall give at least five business days' written notice to—
(a) any person who is or may be entitled to appoint an administrative receiver of the company, and
(b) any person who is or may be entitled to appoint an administrator of the company under paragraph 14.
(2) A person who proposes to make an appointment under paragraph 22 shall also give such notice as may be prescribed to such other persons as may be prescribed.
(3) A notice under this paragraph must—
(a) identify the proposed administrator, and
(b) be in the prescribed form.
27 (1) A person who gives notice of intention to appoint under paragraph 26 shall file with the court as soon as is reasonably practicable a copy of—
(a) the notice, and
(b) any document accompanying it.
(2) The copy filed under sub-paragraph (1) must be accompanied by a statutory declaration made by or on behalf of the person who proposes to make the appointment—
(a) that the company is or is likely to become unable to pay its debts,
(b) that the company is not in liquidation, and
(c) that, so far as the person making the statement is able to ascertain, the appointment is not prevented by paragraphs 23 to 25, and
(d) to such additional effect, and giving such information, as may be prescribed.
(3) A statutory declaration under sub-paragraph (2) must—
(a) be in the prescribed form, and
(b) be made during the prescribed period.
(4) A person commits an offence if in a statutory declaration under sub-paragraph (2) he makes a statement—
(a) which is false, and
(b) which he does not reasonably believe to be true.
28 (1) An appointment may not be made under paragraph 22 unless the person who makes the appointment has complied with any requirement of paragraphs 26 and 27 and—
(a) the period of notice specified in paragraph 26(1) has expired, or
(b) each person to whom notice has been given under paragraph 26(1) has consented in writing to the making of the appointment.
(2) An appointment may not be made under paragraph 22 after the period of ten business days beginning with the date on which the notice of intention to appoint is filed under paragraph 27(1).
29 (1) A person who appoints an administrator of a company under paragraph 22 shall file with the court—
(a) a notice of appointment, and
(b) such other documents as may be prescribed.
(2) The notice of appointment must include a statutory declaration by or on behalf of the person who makes the appointment—
(a) that the person is entitled to make an appointment under paragraph 22,
(b) that the appointment is in accordance with this Schedule, and
(c) that, so far as the person making the statement is able to ascertain, the statements made and information given in the statutory declaration filed with the notice of intention to appoint remain accurate.
(3) The notice of appointment must identify the administrator and must be accompanied by a statement by the administrator—
(a) that he consents to the appointment,
(b) that in his opinion the purpose of administration is reasonably likely to be achieved, and
(c) giving such other information and opinions as may be prescribed.
(4) For the purpose of a statement under sub-paragraph (3) an administrator may rely on information supplied by directors of the company (unless he has reason to doubt its accuracy).
(5) The notice of appointment and any document accompanying it must be in the prescribed form.
(6) A statutory declaration under sub-paragraph (2) must be made during the prescribed period.
(7) A person commits an offence if in a statutory declaration under sub-paragraph (2) he makes a statement—
(a) which is false, and
(b) which he does not reasonably believe to be true.
30 In a case in which no person is entitled to notice of intention to appoint under paragraph 26(1) (and paragraph 28 therefore does not apply)—
(a) the statutory declaration accompanying the notice of appointment must include the statements and information required under paragraph 27(2), and
(b) paragraph 29(2)(c) shall not apply.
31 The appointment of an administrator under paragraph 22 takes effect when the requirements of paragraph 29 are satisfied.
32 A person who appoints an administrator under paragraph 22—
(a) shall notify the administrator and such other persons as may be prescribed as soon as is reasonably practicable after the requirements of paragraph 29 are satisfied, and
(b) commits an offence if he fails without reasonable excuse to comply with paragraph (a).
33 If before the requirements of paragraph 29 are satisfied the company enters administration by virtue of an administration order or an appointment under paragraph 14—
(a) the appointment under paragraph 22 shall not take effect, and
(b) paragraph 32 shall not apply.
34 (1) This paragraph applies where—
(a) a person purports to appoint an administrator under paragraph 22, and
(b) the appointment is discovered to be invalid.
(2) The court may order the person who purported to make the appointment to indemnify the person appointed against liability which arises solely by reason of the appointment’s invalidity.
35 (1) This paragraph applies where an administration application in respect of a company—
(a) is made by the holder of a qualifying floating charge in respect of the company’s property, and
(b) includes a statement that the application is made in reliance on this paragraph.
Enterprise Act 2002