Clifford Chance

Voluntary administration involves the appointment of an independent insolvency practitioner to administer the business with a view to maximising the chances of rehabilitating the company, or as much as possible of the business. If rehabilitating the company is not possible, then the administrator may, under s 435A , perform his or her functions with a view to achieving a better return for the company’s creditors and members than would result from an immediate liquidation of the company.

Although the stated purpose of the voluntary administration is rehabilitative, in practice it is frequently used as the first step towards the liquidation of a company.