An administration is a Court appointment that places the company into administration. An administrator is appointed to deal with the Company, which may involve running it and selling it, selling it or closing it if there are no prospects of a sale. The sale could even be to somebody who is connected to the company. Protection from creditors, HMRC and landlords can be obtained earlier by filing the appropriate form in Court so it is particularly useful if the company is pressured.
Company Voluntary Arrangement 'CVA'
A CVA is an agreement with all your creditors, which (if they agree) puts their debt on hold. The company will continue to trade and will pay to the supervisor of the CVA an agreed amount at set intervals, which will be used to pay the on-hold creditors. It offers the company protection from these CVA creditors which may include H M Revenue and Customs – as they will not be able to take any action against the company for this debt.
Even if a company is going to be liquidated or is to be closed as part of an administration, there is nothing to stop people connected in that company setting up a new company and purchasing the assets of the old one. It is referred to in the industry as a pre-pack.