Which option best describes voluntary administration?

• A. An independent person is hired to operate the business in aim to get it out of debt
• B. The business is forced to shut down by creditors
• C. The business files for bankruptcy with court
• D. The business liquidates assets immediately

Answer: (A)

Voluntary administration is a rescue-focused insolvency process where an independent administrator is appointed to assess whether the business can be saved and to propose a plan to recover or restructure it. The administrator takes control of the company to oversee the business and explore options to continue trading, renegotiate debts, or arrange a deed with creditors, aiming to keep the business going rather than liquidating immediately. This stay on certain creditor actions during the process gives the company a real chance to turn things around.

The option describing an independent person hired to operate the business to get it out of debt best matches this idea, because it reflects the central point: an external, neutral party steps in to guide the business toward a possible recovery rather than forcing bankruptcy or immediate liquidation. The other outcomes—shutting down by creditors, filing for bankruptcy, or liquidating assets immediately—are associated with liquidation or bankruptcy processes, not voluntary administration.