Administration involves the appointment of an administrator (a licensed insolvency practitioner) who takes control of the society, displacing the management committee. The purpose of administration is to sell the business as a going concern, or failing that, achieving a better result for creditors than if the society was wound up possibly through some form of voluntary arrangement, or at the very least, realising the assets of the society for distribution to secured creditors. A society can enter into administration either voluntarily or through a court order. The administrator will assess whether the society can continue to trade so that the business can be sold as a going concern. Administrators are responsible for liaising with all creditors, and making a written proposal for the future of the society within eight weeks of appointment. Beyond that it is up to the administrator to negotiate an agreement with the creditors and reach an outcome satisfactory to all parties.
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