Meaning and transaction use
GOV.UK explains that an administrator takes control of a company in administration and may sell its business as a going concern or sell assets. This is a UK process example; the authority and requirements for a particular sale need separate verification. [S1]
Proposed review method: build a transfer perimeter and a dated continuity plan. Identify assets, contracts, licences, people, data and working capital required to trade after completion. Assign a responsible owner and evidence status to each critical dependency, then reconcile the plan with available cash.
Worked example
Illustrative asset-acquisition budget only. Assume a USD 2 million purchase price, USD 150,000 transaction costs, USD 350,000 restart expenditure and USD 500,000 opening liquidity. Assume no other liabilities, taxes or funding requirements for this arithmetic illustration.
Scroll the table horizontally to view all columns.
| Cash requirement | Amount | Purpose |
|---|---|---|
| Purchase price | USD 2,000,000 | Assumed sale consideration |
| Transaction costs | USD 150,000 | Assumed professional and execution costs |
| Restart expenditure | USD 350,000 | Assumed operational restoration |
| Opening liquidity | USD 500,000 | Assumed initial trading cash |
| Total cash need | USD 3,000,000 | Sum of stated items |
The illustrative cash requirement is USD 3 million, exceeding the purchase price by USD 1 million. Validate excluded liabilities and statutory obligations separately. The example does not establish that an asset purchase transfers a business free of liabilities.
Proposed transaction review process
Verify the sale process
Confirm seller authority, required approvals, timetable and transaction form.
Define the transfer perimeter
Reconcile assets, contracts, employees, licences and exclusions with the proposed documents.
Test continuity
Identify critical supplies, systems, permissions and cash needed from completion onward.
Prepare funding and transition
Evidence completion funds, allocate transition responsibilities and track outstanding conditions.
Evidence checklist
Authority and process
Appointment or corporate-authority documents, sale procedure and approval requirements.
Asset and obligation map
Ownership evidence, security interests, contract status and proposed assumption or exclusion terms.
Trading evidence
Cash forecast, customer orders, supplier terms, payroll and operating dependencies.
Completion plan
Funding evidence, transfer documents, consents and dated transition actions.
Decision framework
| Situation | Proposed action |
|---|---|
| A critical operating contract requires consent | Determine whether consent can be obtained and assess the continuity consequence. |
| The available cash runway is shorter than the transaction timetable | Reconcile interim funding, process options and the actual completion deadline. |
| Asset ownership is uncertain | Resolve title and security issues before treating the asset as available for transfer. |
| Restart costs remain management estimates | Label the estimates, obtain supporting quotations and test higher-cost scenarios. |
Common errors to check
- Using the bid price as the complete funding requirement.
- Assuming an asset sale removes every liability or statutory obligation.
- Relying on customer or supplier continuity without evidence.
- Ignoring the authority and procedural requirements of the sale.
Review the transfer and funding perimeter
Prepare the sale information, asset schedule and dated cash requirements for a distressed-transaction discussion. Identify the dependencies requiring insolvency, legal or operational advice before committing funds.
Discuss the transactionPrimary references and editorial scope
- GOV.UK: Put your company into administration
Administrator control and potential business or asset-sale outcomes in the UK example. Reference checked 17 September 2026.
General transaction education using UK administration as an example. Laws, sale procedures and transferred obligations vary by jurisdiction and transaction. Figures and review steps are illustrative; no particular acquisition is assessed.
General business information. Obtain advice appropriate to the legal, tax, accounting and financing facts. No offer, lender commitment or transaction outcome is represented. All worked examples use expressly assumed figures. Editorial draft date: 17 September 2026.
