- The company is liquidated.
- The voluntary administration period ends and the company can resume trade.
- Creditors approve a Deed of Company Arrangement or DOCA.
But what steps taken to reach any of these conclusions, and who is involved? In this guide, we take you through the process in simple steps and answer many frequently asked questions about the topic.
Are you facing company voluntary administration? Don’t panic – get expert advice on your VA options. Call us today 1800 621 308.
Voluntary Administration Timeline in Australia – Key Steps
Step 1 – An Administrator is Appointed
An Administrator is appointed in one of three ways:
- A Secured Creditor who can take charge of the majority of the company’s property.
- A Liquidator or Provisional Liquidator.
- Directors by resolution of the Board (in writing).
Step 2 – First Meeting of Creditors Takes Place
This must happen within eight days of the Administrator’s appointment and must give Creditors at least five days’ notice. During this meeting, the Creditors have the right to replace the Administrator and/or create a Committee of Creditors.
Step 3 – Administrator Investigation
The Administrator conducts a full investigation into the company affairs and submits a report to Creditors detailing alternatives.
Step 4 – Second Meeting of Creditors Takes Place
This meeting must take place within 20 days of the official start of the Voluntary Administration. The Administrator can adjourn this meeting for up to 45 days, whilst the court can make further extensions. Once the meeting occurs, the Creditors discuss the contents of the Administrator’s Report, and the alternatives are put forward.
Step 5 – Creditor Meeting Outcomes
As already mentioned, there are three possible outcomes. One returns to business as usual, whilst another results in liquidation, both of which have clearly defined and obvious paths. There is, however, a third option:
The Company enters a Deed of Company Arrangement
The DOCA must be signed within 15 days of the Creditors Meeting, at which point the Administrators become Deed Administrators and are responsible for implementing the restructuring plan, monitoring the company’s DOCA compliance, managing asset sales or debt repayments, and providing regular reports to Creditors.
Failure to sign a DOCA within 15 days will result in the company defaulting to liquidation.
Speak to our business restructuring experts for advice that’s right for you.
What Happens Immediately After Filing for Voluntary Administration?
How Long Does the Voluntary Administration Process Take?
What Is the First Creditors' Meeting and When Does it Happen?
Can the Business Continue to Trade During Voluntary Administration?
What Happens to Employees During Voluntary Administration in Australia?
What is a Deed of Company Arrangement (DOCA)?
What Happens If a DOCA Is Approved But the Company Can't Meet Its Obligations?
What Are the Possible Outcomes of the Second Creditors' Meeting?
At the second meeting (typically held 20 business days after appointment), creditors vote for one of three outcomes:
- Return the company to directors’ control
- Enter into a Deed of Company Arrangement
- Place the company into liquidation.
Can Secured Creditors Enforce Their Security During Voluntary Administration?
Secured creditors typically have 13 business days to enforce their security, after which they are bound by a moratorium (unless they had initiated enforcement action before the administration process began).
