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ACCA Applied Skills · Corporate and Business Law (Global) · Insolvency and administration

Orchid Retail Ltd owes Kestrel Bank 900,000 secured by a floating charge created in the form of a qualifying charge over all its assets. Orchid's directors fear Kestrel may soon enforce. Which statement is correct about who may appoint an administrator?

An administrator may be appointed by the court on an application, or out of court by a qualifying floating charge holder or by the company or its directors. So there are multiple routes, and appointment is not limited to the court, shareholders or the Registrar.

  1. AOnly the court may ever appoint an administrator
  2. BOnly the company's shareholders by ordinary resolution may appoint an administrator
  3. CThe holder of a qualifying floating charge, the company or its directors, or the court on application may appoint or make the appointment, depending on the route usedCorrect
  4. DOnly the Registrar of Companies may appoint an administrator

Explanation

Administrators can be appointed by the court on application, or out of court by the holder of a qualifying floating charge or by the company or its directors. So several parties can initiate the process depending on the route. The statements limiting appointment to the court, the shareholders or the Registrar are all too narrow or wrong.

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