If a company is in financial difficulty, it can be placed into voluntary administration. Voluntary administration is designed to resolve a company’s future direction quickly. The voluntary administrator takes control of the company to work out a way to save either the company or its business, if possible.
If it isn’t possible to save the company or its business, the aim is to administer the affairs of the company in a way that results in a better return to creditors than they would have received if the company had instead been placed straight into liquidation. A mechanism for achieving these aims is a deed of company arrangement.
A voluntary administrator is usually appointed by a company’s directors, after they decide that the company is insolvent or likely to become insolvent. Less commonly, a voluntary administrator may be appointed by a liquidator, provisional liquidator, or a secured creditor.
The voluntary administration procedure often offers advantages over informal arrangements. The procedure is easily and simply commenced, and the market has a good understanding of the process and outcomes, rights and obligations.
This is a quick snapshot on voluntary administration. You should ask us, in your circumstances, how will voluntary administration benefit stakeholders such as owners, directors, employees, suppliers and other creditors? What are the advantages and disadvantages? What about director liability?
If one of your customers enters into voluntary administration, you should assess your position immediately, preferably in conjunction with us, and also, we should consider with you, whether you need assistance or representation for the first creditors’ meeting of your customer. A few options are available to creditors to improve their financial outcome, depending on their commercial circumstances e.g. secured, unsecured, use of retention of title or romalpa in terms of conditions of trade.
This information is not a substitute for advice concerning your circumstances. Liability limited by a Scheme approved under the Professional Standards Legislation.
ATO Debt l ATO Director Penalty Notice l Director Penalty Notice l Bankruptcy l Business Bankruptcy
Business Failure l Company Administration l Company Bankrupt l Company Debt l Company Liquidation
Deed of Company Arrangement l Insolvency l Insolvency Advice l Insolvency Specialist l Insolvent
Insolvent Trading l Liquidation l Liquidators l Small business bankruptcy l Statutory demand l Tax audit
Tax debt l Tax debt help l
Unpaid tax l Voluntary Administration