Part 4 – Appointment of administrator by the company or its directors

March 2013  

56.1.37 Power to appoint

The company or the directors of a company may appoint an administrator by resolution of the members or formal or informal decision of the directors  [Note 1]. Where the directors formally agree to appoint an administrator the decision can be by majority vote. Where the decision is taken informally it must be unanimous [Note 2].  

56.1.38 Restrictions on the power to appoint

An administrator may not be appointed by the company or its directors during the period of 12 months beginning with: 

• the date on which a prior appointment of an administrator by the company or its directors ceases to have effect, or
• the date when a moratorium under Schedule A1 ends with no voluntary arrangement in force, or
• the date on which a voluntary arrangement, made during a moratorium under Schedule A1, ends prematurely [Note 3].

56.1.39 Further restrictions on the power to appoint

An administrator of the company may not be appointed by the company or its directors if: 

• a petition for the winding up of the company has been presented and is pending, or
• an administration application has been made and is pending, or
• an administrative receiver is in office [Note 4].

56.1.40 Notice of intention to be given to other parties

The company or its directors must give notice of their intention to appoint an administrator. The notice must name the proposed administrator and be in the prescribed form (Form 2.8B). The company or its directors must give written notice (Form 2.8B) together with the statutory declaration (see paragraph 56.1.41) at least five business days before it is filed at court to:

• any person that is entitled to appoint an administrative receiver (see Part 2),
• the holder, or holders, of a qualifying floating charge (see paragraph 56.1.27),
• to any enforcement officer charged with execution against the company,
• to any person who has distrained against the company
• any supervisor of a voluntary arrangement, and
• the company (if the application is by the directors) [Note 5].

56.1.41 Notice of intention to be filed at court

The notice of intention to appoint an administrator must be filed at court at the same time that it is sent, if applicable, to those mentioned in paragraph 56.1.40. The notice must be accompanied by a statutory declaration (made within five business days of the filing) that: 

• the company is, or is likely to become, unable to pay its debts,
• the company is not in liquidation, and
• as far as the person making the declaration is aware there are no other restrictions on the appointment being made (see paragraphs 56.1.38 and 56.1.39).

The notice must be accompanied by the record of the directors' decision, or the resolution by the company, to appoint an administrator [Note 6].

56.1.42 Notice of appointment - timing of filing at court

Where there is no need to give notice to third parties the notice of appointment can be filed immediately by completing Form 2.10B [Note 7]. Where the notice of intention has been sent to third parties an administrator cannot be appointed until the time limits mentioned in paragraph 56.1.40 have expired and at least ten business days have elapsed since the notice of intention was filed at court [Note 8]. In this instance the notice of appointment must be in the prescribed form (Form 2.9B).

56.1.43 Other documents to be filed with the notice of appointment

The notice of appointment (either Form 2.9B or Form 2.10B) must be filed at court with a statutory declaration (made within five business days of the filing) that: 

• the person is entitled to make the appointment (see paragraph 56.1.37),
• that the appointment is made in accordance with Schedule B1 of the Insolvency Act 1986, and
• that the information provided in the statutory declaration accompanying the notice of intention (see paragraph 56.1.41), if any, remains accurate to the best of their knowledge [Note 9].

The notice of appointment must identify the administrator. The administrator must provide a written statement on Form 2.2B to be filed at court with the notice of appointment. The statement should include his/her consent to act, a statement that the purpose of the administration is likely to be achieved and any other information which may be required [Note 10].

56.1.44 Sealed copies of the notice of appointment

The court will seal and endorse the three copies of the notice of appointment provided with the date and time of the filing. Two sealed copies of the notice will be returned to the appointor who should send one of them to the administrator [Note 11].

56.1.45 Commencement of appointment

The appointment of the administrator takes effect from the date and time that the notice of appointment is filed at court (see paragraph 56.1.42) [Note 12].

56.1.46 The administrator must publicise his/her appointment 

The administrator, for the period of the administration, must include his/her name and state that the company's affairs and property are being managed by him/her on every business document issued and on all the company's websites. The business documents include invoices, orders, letters, etc. and include those issued by, or on the behalf of, the company or administrator [Note 13].

[Back to Part 3 Appointment of an administrator by the holder of a qualifying floating charge] [On to Part 5 Effects of administration]