What is a Notice of Intention to Appoint Administrators?

What is a Notice of Intention in administration?

A Notice of Intention to appoint an Administrators is used to inform certain parties that a company intends to enter administration. The document is submitted to court and immediately stops any ongoing or threatened creditor legal action against the company in question. 

Who can file a Notice of Intention in administration

The company, its directors, or a qualifying floating charge holder (typically the bank), can all file a notice of intention with the court. Once this has been done, an administrator of their choice will be appointed.

The floating charge holder is able to object if they disagree with the administrator chosen. Although it rarely happens, they have the power to appoint their own under these circumstances.

So long as the company has not entered administration during the previous 12-month period, or has an active winding up petition against them, a notice of intention is likely to be accepted by the court.

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What is the procedure for filing a notice of intention?

The company must notify qualifying floating charge holders as well as the supervisor of any active Company Voluntary Arrangement (CVA) already in place, at least five business days before the notice is filed at court.

This provides the opportunity for the qualifying floating charge holder to object to the choice of administrator if they deem it necessary, but as we mentioned earlier, this rarely occurs in practice.

The notice of intention requires the name and address of the administrators to be completed, in addition to other information about the company and its situation.

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What happens when a notice of intention has been filed?

When the notice of intention has been filed at court, an interim moratorium period is triggered. This allows the directors and administrator to make plans for dealing with the financial decline of the company, and ultimately avert liquidation.

During this moratorium period the company’s creditors are not able to begin or continue legal action against the company unless they obtain authority from the court, which in practice is unlikely to happen.

Real Business Rescue are insolvency specialists and can offer the professional support you need if your company is in serious decline. We’ll explain more about the notice of intention in relation to your own situation, and ensure you understand the implications of all the options open to you. To arrange a free same-day consultation please call one of the team or use our call-back feature on our website.