External Administration

An umbrella term

External administration is a general label covering the formal insolvency procedures in which an independent practitioner is appointed to take control of a company's affairs. It includes liquidation, voluntary administration, a deed of company arrangement and receivership. The common thread is that someone external to the company, rather than its directors, is steering its affairs in the interests of creditors or a secured party.

Why the distinction matters

Knowing that a debtor is in some form of external administration tells a creditor that normal recovery channels may be replaced by a formal process and that claims should usually be directed to the appointed practitioner. This is general information only and not legal or financial advice. If your debtor has entered external administration, you can refer a debt to find out how to proceed.