A sponsor licence in administration: what the administrator must control before a sale.

Paragraph C3.1 requires a business entering administration, including special administration, or administrative receivership to tell its administrator or administrative receiver that it is a licensed sponsor as soon as possible. It must also notify the Home Office within 20 working days of entering the relevant procedure.

Paragraph C3.2 goes further: the insolvency practitioner appointed as administrator or administrative receiver must be appointed as the sponsor's Authorising Officer. The relevant route for making that change depends on whether an existing Level 1 User remains available and whether access to the Sponsorship Management System can still be exercised.

A conventional appointment letter, a Companies House filing or general awareness within the restructuring team does not automatically complete the Home Office step. Responsibility must be allocated to someone who understands the difference between the insolvency appointment and the actual sponsor management change.

The first practical document should be a controlled schedule identifying each sponsored worker, the employing entity, the applicable permission, the job, salary, normal workplace, expiry and any application or reporting event already under way. The question is not merely how many sponsored employees are on payroll, but who remains responsible for each sponsorship relationship.

A change to an individual worker's circumstances is ordinarily reportable within 10 working days unless a different rule applies. Organisational changes are normally reportable within 20 working days. Those periods address different events and should not be combined into a single post completion deadline.

Salary disruption, unpaid leave, redundancy, an altered workplace and a change to the identity of the employer can each raise distinct issues. A continuity plan must therefore distinguish the worker's employment position, the sponsor's reporting responsibility and the worker's current immigration permission.

1. 01
   The worker

   Permission, expiry, sponsored role, recent absences and actual working arrangements.

2. 02
   The licensed entity

   Authorising Officer, Level 1 User, SMS access, reporting history and whether trading continues.

3. 03
   The proposed acquirer

   Legal entity, existing licence position, transaction structure and the intended employer after completion.

The restructuring team should secure SMS access, identify the existing key personnel, establish the administrator's appointment mechanism and preserve the documents needed to understand current compliance. The sale timetable should then be tested against the intended buyer's sponsor position and the actual reporting events.

Where a defect already exists, the relevant question is whether it concerns access, organisational reporting, the licensed entity, worker circumstances, right to work evidence or a combination of those issues. Each requires its own remediation decision and, where appropriate, prompt legal advice.

A sponsored employee should not be told that a sale automatically protects their immigration status. Nor should the acquirer be told that a contractual promise to obtain a licence makes sponsorship lawful in the interim. The position depends on the operative rules, transaction and Home Office response.