Going into administration usually means a company is insolvent (cannot pay its debts) and a licensed insolvency practitioner is appointed to take control of the business, with the aim of rescuing it or getting the best outcome for creditors.

Plain‑English meaning

When a company “goes into administration” (especially in the UK and similar systems), it means:

  • The company is in serious financial trouble and cannot meet its liabilities as they fall due.
  • Control passes from the directors to an independent professional called an administrator (an insolvency practitioner).
  • There is usually a legal moratorium , a breathing space that stops most creditor enforcement (like winding‑up petitions or bailiffs) while a plan is worked out.

In short, it is a formal insolvency procedure designed either to save the business or to close it down in an orderly way rather than let it collapse chaotically.

What happens in administration?

Typical steps once a company goes into administration include:

  • Appointment of an administrator by the directors, a major secured creditor (like a bank), or the court.
  • The administrator takes over decision‑making, reviews the company’s finances, and decides whether it can be rescued, restructured, sold, or needs to be wound up.
  • The company may continue trading while in administration if that helps preserve value or prepare a sale.

The administrator must act in the interests of creditors as a whole, not just the shareholders or original directors.

Possible outcomes

Going into administration does not always mean the end of the business, but it is serious.

Common outcomes are:

  • Rescue as a going concern (sometimes via restructuring or a company voluntary arrangement).
  • Sale of the business and assets to another company (sometimes in a “pre‑pack” deal arranged in advance).
  • Liquidation and wind‑up if rescue is not possible, with assets sold to pay creditors in a set legal order.

So when you see news that a company has “gone into administration,” it generally signals that it is insolvent, under the control of an administrator, and at a crossroads between rescue, sale, or closure.