What Is Administration

Administration is a legal term that defines a procedure under the insolvency laws of a state. It allows companies that have been declared insolvent to keep on running their business with a goal to get back into a state of solvency usually within a specified period of time. It thereby functions as a rescue mechanism, acting as an alternative to liquidation. The process of administration usually tags a company as going into administration. Different countries have different laws and Acts guiding administration in their jurisdiction. A business in administration is usually handled by insolvency practitioners who have been trained in the processes of insolvency. The insolvency practitioner is referred to as an administrator in this case.