Entering administration is a formal insolvency process in which the management of a financially distressed entity is temporarily taken over by a licensed insolvency practitioner (the administrator). The process aims to rescue the business as a going concern or, if rescue is not feasible, to achieve the best possible outcome for creditors, which may involve selling the business or its assets. A key feature is the moratorium—a legal breathing space that prevents creditors from taking legal action against the company while options are considered. Key points

• Trigger and purpose: A company goes into administration when it cannot pay its debts and needs a structured procedure to protect value and try to restructure or sell the business. The administrator's objective is to rescue the company or achieve a better result for creditors than immediate liquidation. [general definitions and summaries of administration as a UK insolvency process are widely described in statutory guidance and practitioner explanations]
• Control and moratorium: Once administration starts, an administrator is appointed to run the business, and a statutory moratorium prohibits most creditor actions against the company for a set period, giving space to formulate a rescue plan or sale. [insolvency process overviews]
• Possible outcomes:
  • Rescue or partial rescue: The business or parts of it may continue under the administrator’s supervision or through a sale to another party.
  • Liquidation: If rescue is not viable, the administrator may liquidate assets to pay creditors in a statutory order of priority.
  • Pre-pack arrangements: In some cases, assets may be sold quickly to a buyer (often connected or unaffiliated) under the oversight of the administrator, preserving value and jobs in many instances. [typical outcomes described in guidance and practitioner articles]
• Who is affected: Directors, employees, creditors, and other stakeholders are impacted by administration. Directors generally exchange day-to-day control for the administrator’s management; employees may be affected by potential changes in terms or continuation of employment during the process. [staff and governance discussions in insolvency literature]
• Differences from other processes: Administration is designed to avoid immediate liquidation, protect the company from creditor actions, and maximize returns to creditors, whereas liquidation closes the company and distributes assets. The exact mechanics can vary by jurisdiction and by the specific facts of the case. [comparison summaries found in insolvency resources]

If you’re considering whether administration is appropriate, or you want to understand how it would affect a specific company (including timing, protections, and potential outcomes), I can tailor the explanation to your situation and, if helpful, outline the typical steps involved and any differences that might apply in your country or region.