What is the difference between a Liquidation and Administration?

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What is the difference between a Liquidation and Administration?

To some extent, the procedures are almost interchangeable, but the main differences are as follows. The Liquidator will be appointed when the company has ceased to trade. Their job is to sell the remaining assets, pay what they can to the creditors and arrange for the company to be dissolved.

An Administrator will generally be more inclined to continue to trade the business whilst in Administration, if they think they can achieve a sale of the business as a going concern, thereby enhancing the value of the assets. Once the Administrator has sold the business, generally speaking, the creditors will get paid either by the Administrator if they make an application to the court, or by the Administrator subsequently being appointed as Liquidator to enable the funds to be distributed to the creditors.

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