Administration order — how the court grants one
The court route into administration. Used when a winding-up petition blocks the out-of-court route, when a creditor forces the process, or when the court's imprimatur is needed for a contested appointment.
The statutory test in full (para 11)
Limb 1 — insolvency: the company is, or is likely to become, unable to pay its debts. "Unable to pay debts" is defined in s.123 IA 1986: unpaid statutory demand of £750+, unsatisfied judgment, or the cash-flow / balance-sheet tests.
Limb 2 — likely to achieve a purpose: the court must be satisfied on the evidence that administration will "reasonably likely" achieve one of the statutory purposes. The Court of Appeal in Re Harris Simons Construction [1989] 1 WLR 368 set the bar at "real prospect", not "more likely than not".
Court vs out-of-court — when to use which
| Situation | Route |
|---|---|
| Winding-up petition pending | Court order (auto-suspends the petition) |
| Creditor forcing the process | Court order |
| QFCH supportive, no petition | Out-of-court (para 14) — same day |
| Directors initiating, no QFCH | Out-of-court (para 22) |
| Cross-border / disputed appointment | Court order |
See Out-of-court appointment and Winding-up petition response guide.
Frequently asked questions
What is an administration order?
A court order under Sch B1 para 10 IA 1986 appointing an insolvency practitioner as administrator of a company. It is the court route into administration, contrasted with the out-of-court routes in paras 14 and 22.
Who can apply?
Under Sch B1 para 12: the company itself, its directors, one or more creditors (including a contingent or prospective creditor), the designated officer for a magistrates' court in respect of unpaid fines, and — during a moratorium — the supervisor.
What test does the court apply?
Sch B1 para 11: (a) the company is or is likely to become unable to pay its debts, AND (b) the administration order is reasonably likely to achieve one of the three statutory purposes in para 3. Both limbs must be satisfied.
Do secured creditors have veto rights?
No absolute veto, but a qualifying floating charge holder (QFCH) has strong influence. They must receive at least 5 business days' notice of the application (para 12(2)), and they can appoint their own administrator out of court to pre-empt the court appointment.
When is the court route used instead of out-of-court?
When the company faces a pending winding-up petition (which blocks out-of-court appointment by the company/directors under para 25); when a creditor rather than the company applies; or when the company has already granted a QFCH who won't consent to out-of-court appointment.
What is the effect of a pending winding-up petition?
It automatically suspends until the administration application is heard (para 40). If administration is ordered, the petition is dismissed under para 40(1)(a). This makes the court route the standard defensive response to an aggressive creditor.
What documents are needed?
Form 2.1B application, a witness statement in support (with the s.12A statement of the proposed administrator), the proposed administrator's written consent (Form 2.2B), and evidence of the company's financial position (management accounts, cash-flow forecast).
How quickly can an order be granted?
Same-day hearings are possible in urgent cases, especially where a QFCH consents. Contested applications typically take 2–4 weeks. Courts prioritise administration applications given their rescue purpose.
Are administration orders public?
Yes. The sealed order is filed at Companies House and published in The Gazette within 7 business days of being made. See our <a href='/administrations'>live UK administrations feed</a> for real-time coverage.
Where is the procedure set out?
Sch B1 paras 10–13 IA 1986 for the substantive law; Part 3 of the Insolvency (England and Wales) Rules 2016 for the procedural detail; and the Insolvency Proceedings Practice Direction (PDIP) for court-specific requirements.