Directors stay in office when a company goes into administration, but they lose control of it. Paragraph 64 of Schedule B1 to the Insolvency Act 1986 stops them using any management power that could interfere with the administrator unless the administrator consents. They keep a set of duties: handing over property and records, giving a statement of affairs within 11 days if asked, cooperating under section 235, and accepting that the administrator will report on their conduct.

Do the directors stay in office once an administrator is appointed?

Yes. Going into administration does not remove the directors. What changes is who runs the company. Under paragraph 59 of Schedule B1, the administrator may do anything necessary or expedient for the management of the company’s affairs, business and property. Paragraph 67 requires the administrator, on appointment, to take custody or control of all the property the administrator thinks the company is entitled to. Paragraph 69 says the administrator acts as the company’s agent. The company still makes contracts and still employs people, but it does so through the administrator.

The administrator also controls the board itself. Paragraph 61 allows the administrator to remove a director and to appoint a director, whether or not there is a vacancy. Whether or not the board changes, the directors remain the main source of information about how the company reached this point.

For the wider procedure (the moratorium, the proposals and how administration ends) see our guide to company administration. This page deals only with the directors’ position.

Which powers can the directors no longer use?

Paragraph 64 provides that neither a company in administration nor any of its officers may exercise a management power without the administrator’s consent. A management power is any power that could be exercised so as to interfere with the administrator’s powers. It makes no difference whether the power comes from an Act or from an instrument such as the articles, so the board’s usual authority under the articles is caught. Consent may be general or specific.

In practical terms, anything that touches the business, its money or its assets now needs the administrator’s agreement: signing or ending contracts, using the company bank account or cards, paying suppliers, hiring or dismissing staff and selling stock or equipment. Where a director is unsure, the safe course is to ask for written consent before acting. Counterparties get protection when they deal with the administrator: under paragraph 59(3), a person dealing with the administrator in good faith and for value need not ask whether the administrator is acting within their powers.

What information must directors give the administrator?

The statement of affairs

Paragraph 47 requires the administrator, as soon as reasonably practicable after appointment, to give notice to one or more relevant persons requiring a statement of the company’s affairs. Relevant persons include anyone who is or has been an officer, and certain people who took part in forming the company or were employed by it in the year before administration. The statement must be verified by a statement of truth and must give particulars of the company’s property, debts and liabilities, the names and addresses of its creditors, the security each creditor holds and the date each security was granted.

Under paragraph 48, the statement must be submitted before the end of the period of 11 days beginning with the day the person receives the notice. The administrator can revoke the requirement or extend the period, and if the administrator refuses an extension the director can apply to court. Failing to comply without reasonable excuse is an offence.

The general duty to cooperate

Section 235 of the Insolvency Act 1986 requires current and former officers, among others, to give the administrator the information about the company’s promotion, formation, business, dealings, affairs or property that the administrator reasonably requires, and to attend on the administrator when reasonably required. Failure without reasonable excuse is punishable by a fine and a daily default fine. Separately, section 234 allows the court to order anyone holding property, books, papers or records that the company appears entitled to, to hand them over.

The Insolvency Service’s director information hub summarises the practical duty: directors must provide the office holder with all relevant company information and paperwork, attend meetings if needed and answer questions about company activity, normally by completing a questionnaire or submitting a statement of affairs.

What happens if a director does not cooperate?

Section 236 lets the administrator ask the court to summon any officer, or anyone thought capable of giving information about the company, and to require an account of their dealings with the company or the production of records. If a person fails to appear without reasonable excuse, or there are grounds to believe they have absconded or are about to, the court can issue a warrant for their arrest and for the seizure of books, papers and records.

The Insolvency Service warns that ignoring a court order can lead to a fine, imprisonment for contempt of court or an arrest warrant, and that a failure to cooperate with the office holder is itself something that can lead to disqualification.

How is a director’s conduct reviewed?

Section 7A of the Company Directors Disqualification Act 1986 requires the administrator to prepare a conduct report on every person who was a director on the date the company entered administration or at any time in the three years before. The report must describe any conduct that may help the Secretary of State decide whether to seek disqualification, and it must be sent before the end of three months beginning with that date, unless the Secretary of State allows longer. New information found later must be passed on as soon as reasonably practicable. Shadow directors are included. See director conduct reports and director disqualification for what follows.

Can directors become personally liable through the administration?

Since the administrator stands in for the board, the administrator can also bring claims against the directors. Section 246ZB allows the administrator to ask the court to order a director or former director to contribute to the company’s assets for wrongful trading. The test is whether, before the company entered insolvent administration, the director knew or ought to have concluded that there was no reasonable prospect of avoiding insolvent administration or insolvent liquidation. The defence is that, from that point, the director took every step to minimise the potential loss to creditors that they ought to have taken. The standard is that of a reasonably diligent person with both the general knowledge, skill and experience expected of someone in that role and the director’s own knowledge, skill and experience.

Section 246ZA covers fraudulent trading during administration and applies to anyone knowingly a party to it, not only directors. The Insolvency Service also lists misfeasance and compensation orders among the ways directors of an insolvent company can become personally liable. The earlier decisions that create these risks are covered in wrongful trading and the creditor duty of directors.

What does this look like in practice?

Illustration only. A trading company with two directors enters administration on Monday 2 November 2026. The administrator’s notice requiring a statement of affairs reaches both directors on Wednesday 4 November. The 11 day period begins on the day of receipt, so the statement is due by Saturday 14 November unless the administrator agrees an extension.

On 6 November one director wants to collect a large customer debt and use it to pay staff wages. Both steps involve company money, so paragraph 64 applies and the director needs the administrator’s consent first. The other director, who resigned a month earlier, assumes none of this concerns her. It does: section 235 applies to anyone who has at any time been an officer, and she falls within the conduct report because she was a director in the three years before 2 November. The administrator’s conduct report on both directors is due by 1 February 2027.

If the business is sold, the staff position is covered separately in employees in administration.

What mistakes do directors make?

  • Carrying on signing contracts, making payments or using company cards after the appointment without the administrator’s consent.
  • Letting the 11 day statement of affairs deadline pass instead of asking for an extension under paragraph 48(2).
  • Holding on to laptops, passwords, books or records that belong to the company.
  • Assuming that resigning ends the duty to cooperate. Section 235 covers former officers too.
  • Treating the administrator as their adviser. The administrator acts for the company and its creditors and reports on the directors’ conduct, so directors should take their own advice.
  • Paying or favouring particular creditors in the run up to administration, which is exactly what the administrator will examine.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 19 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.