Voluntary Administration gives your company a circuit breaker. A way to pause trading pressures and legal proceedings, protect assets, and explore the best outcome for everyone involved to get you back on your feet.

The voluntary administration process is designed to assist insolvent companies satisfy their debts, by ensuring that they can either:

- Come to a formal arrangement with their creditors to pay those debts through a Deed of Company Arrangement (DOCA)

- Be placed into liquidation, quickly and inexpensively. The voluntary administration process maximises the chances of a company continuing to exist by giving it the opportunity to propose a DOCA to its creditors

A voluntary administration offers a collaborative approach to satisfying the company’s debts. It restrains creditors from enforcing their claims and can assist a company to trade out of short-term difficulties caused by cash-flow restrictions or one-off financial problems. When appropriate, it can also provide a way to restructure a business or the company itself to revive it to a healthier financial position.

A voluntary administrator is appointed to control a company’s affairs. The administrator convenes two meetings of creditors. The first meeting is held within eight business days of the appointment. The second meeting is usually held within 20 to 30 business days after the appointment. At the second meeting, creditors will choose the option they believe will best serve their interests. The two most common outcomes of a voluntary administration are a DOCA’s execution or the company’s liquidation.

The voluntary administrator will:

- Take control of the company’s assets

- Investigate the company’s affairs

- Report any offences to the Australian Securities and Investments Commission (ASIC)

- Assist the directors to formulate a DOCA proposal

- Report to creditors on the course of action that gives for the best outcome for creditors

- Call the required meetings of creditors to decide the company's future.

A Deed of Company Arrangement (DOCA) is a formal agreement between a company and its creditors and any other relevant third parties to satisfy company debts. A DOCA sets out terms and conditions, warranties and indemnities, the extent and nature of obligations, and the relationships between those who are a party to it. A DOCA binds all creditors, both unsecured and secured, to the extent of any shortfalls on their securities and releases the company from its debts, at least to the extent provided for within the DOCA’s terms and conditions.

The voluntary administration ends when:

- A DOCA is fully executed

- The creditors resolve to wind up a company

- The creditors resolve that the voluntary administration should end

- The court orders that the administration is to end

- The approved DOCA is not signed within 15 business days of the second meeting

- The period for calling the second meeting ends without the meeting being called

- The court appoints a liquidator to the company