Administration is usually aimed at protecting a company while options are explored. This may include rescuing the business, achieving a better outcome for creditors, or selling parts of the business or assets.

During administration, creditors are generally restricted from taking action against the company without permission.

Liquidation is different. It is usually the process of bringing a company to an end. The company’s assets are collected in and sold, creditors are paid as far as possible, and the company is eventually closed.

Administration is often focused on rescue or preserving value. Liquidation is generally focused on an orderly closure and distribution of assets.