Administration Order
The court order under Schedule B1 to the Insolvency Act 1986 that places a company into administration and appoints an administrator, made only where the company is or is likely to become insolvent and administration is reasonably likely to achieve its statutory purpose.
Independent editorial summary — not the official statute text. Read the official version on legislation.gov.uk.
Schedule B1 keeps the definition of the order itself short: 'An administration order is an order appointing a person as the administrator of a company.' It is one of two routes into administration (the other being an out-of-court appointment by the company, its directors, or a qualifying floating charge holder), but where a court application is used, the court does not make the order automatically just because it is asked to.
The court may only make an administration order 'in relation to a company only if satisfied' on two distinct points: 'that the company is or is likely to become unable to pay its debts, and' 'that the administration order is reasonably likely to achieve the purpose of administration.' The second limb ties the order directly back to the statutory objectives in paragraph 3 of Schedule B1 — rescuing the company, achieving a better result for creditors than a winding up, or realising property for secured or preferential creditors — so the court is in effect checking that administration is actually likely to do some good before it makes the order.
Related terms
Official sources
This explanation is drawn from the official sources below; every substantive statement is verified against them. For advice on a specific matter, see our find help page.