What is the difference between administration and receivership?

Receivership is an older insolvency procedure that has largely been replaced by administration, but it is still relevant for certain pre-2003 debentures. In receivership, a secured creditor appoints a receiver to recover debts owed to them, often by selling company assets. The receiver’s duty is primarily to the appointing creditor, not to all creditors collectively. Administration, by contrast, requires the administrator to act in the best interests of all creditors. This makes administration a more balanced and transparent process. Receivership often led to asset break-up and limited returns for unsecured creditors, whereas administration focuses on business rescue or maximising overall outcomes. For directors, the key difference is that administration provides broader protection and a chance of survival, while receivership is creditor-driven and narrower in scope. Although receivership is now rare, understanding its distinction from administration helps directors appreciate why modern insolvency law prioritises collective solutions over individual creditor action.