What is one of the main purposes of administration?

One of the main purposes of administration is to rescue the company as a going concern. Administration is a process that occurs when a company is unable to meet its financial obligations and is seeking a way to restructure its debts and operations. The primary goal of appointing an administrator is to stabilize the company, keep it operational, and ultimately return it to profitability, allowing it to continue trading rather than being liquidated.

Candidates often examine various strategies such as negotiating with creditors and re-evaluating the company's operations to enhance its viability. The idea is to find a solution that benefits not just the creditors but also the employees and stakeholders involved. This contrasts with other processes like liquidation, which focuses on dissolving the company and selling its assets, or distributing profits to shareholders, which would not be applicable in the context of a company facing financial distress.