Prepack Administration Landing
Why do a Prepack Admin?
A Prepack Admin provides a seamless transfer from one business entity to another. It is the easiest way of preserving the value in a business and maintaining continuity with customers and staff.
Administration is one of a number of formal Insolvency processes, the Prepack term refers to the fact that the sale of the business is ‘Pre-packaged’ prior to the formal process taking effect.
How do I do it?
You need to contact a Licensed Insolvency Practitioner and see if a Prepack Administration is appropriate because there is a chance it may not be the best solution.
How long does it take?
We have done Prepack Admins inside 4 days, but this is the exception rather than the norm. If you want to buy the business back the process tends to take 2-3 weeks from consulting us until it happens, but if selling your business to a 3rd party is what you want to happen then it can take longer as a buyer will need to be found. Whatever your intention the business can be given protection from creditors up to the point the Prepack Administration happens.
So I can buy the business back, how?
Yes, you can buy the business back. In fact in smaller companies this is often what happens – the director of the company going through the Prepack Administration buys the business back. The way it is bought back is by simply paying for the business and assets you want – you don’t have to buy them all, but it is often easier if you do.
I’ve heard a lot of criticism of Prepacks, why?
Many people believe Prepack Admins are used by directors wishing to do underhand confidential deals with the Administrator. Others dislike it because it allows a director to benefit from being able to seamlessly carry on a business whilst leaving all of the debts behind. However, if you are running a business that is struggling financially, it can be an invaluable way out of your predicament and put you quickly on the road to recovery, which can also relieve an incredible amount of stress and reduce the risk of personal liability arising from wrongful trading.
Why do a Prepack Admin rather than liquidate my company?
There are many reasons to favour a Prepack over a Liquidation, it all comes down to your specific circumstances and what you are trying to achieve. One key difference is the timescale of a Prepack because it is often shorter and doesn’t involve a cessation in trade.
Contact us to learn more about the reasons to do a Prepack Administration.