Administration should not last longer than 12 months. In fact, the administration process will automatically come to an end after 12 months unless an extension is granted by the court or creditors or a different exit route is taken. The administrator should request an extension if they cannot complete their tasks in the 12-month administration period.
If an extension is sought from the creditors this can be for a maximum period of 6 months. All secured creditors must consent to the extension. Where there are unsecured creditors, consent must be sought from those whose debts add up to more than 50% of the unsecured liabilities (excluding creditors who don’t respond).
If the administrator believes that the administration's objective has been achieved or sufficiently achieved, they can take steps to end the administration. This involves:
for court appointments - applying to the court to end the administration at a specific time
for out-of-court appointments - filing a notice of outcome and a final progress report with the court and the registrar of companies. This should be sent to all known creditors within 5 business days
Other exit routes
What exit routes may be appropriate after administration will depend on the specifics of the situation. However, common exit routes include:
a Creditors' Voluntary Liquidation (CVL) - tends to be appropriate where assets are available to distribute between creditors
a CVA - is an agreement between the company and its creditors to put in place a timetable for repayment of debts
a restructuring plan (also known as a ‘Part 26A restructuring plan’) - is a restructuring procedure for companies in financial difficulty
For more information read the Government’s guidance and Ask a lawyer if you have any questions about the administration process.