Voluntary Administration & Liquidation
Insolvency & Bankruptcy
Key Takeaway
Voluntary administration provides a mechanism for financially distressed companies to restructure or achieve a better outcome for creditors than immediate liquidation.
Voluntary administration provides a mechanism for financially distressed companies to restructure or achieve a better outcome for creditors than immediate liquidation. We advise directors, creditors, and administrators on the voluntary administration process, deed of company arrangements, and liquidation procedures under the Corporations Act.
The voluntary administration process under Part 5.3A of the Corporations Act is designed to provide a "standstill" period during which the administrator investigates the company's affairs and presents options to creditors. The decision period allows for informed creditor choice between accepting a DOCA, proceeding to liquidation, or returning control to directors.
The Administration Process
Voluntary administration begins when directors resolve that the company is or may become insolvent and appoint an administrator. The administrator takes full control of the company, investigates its affairs, and convenes creditor meetings. The first meeting allows creditors to appoint a committee of inspection. The second meeting, held within 20-30 business days, presents the administrator's report and recommendations. Creditors vote on whether to accept a DOCA, end the administration (returning control to directors), or wind up the company. The administrator must convene these meetings within strict statutory timeframes and provide detailed reports to creditors.
Deeds of Company Arrangement
A DOCA is a binding arrangement between the company and its creditors that governs how the company's affairs will be dealt with. DOCAs typically provide for creditors to receive a dividend (often funded by future trading profits or contributions from directors or third parties) while the company continues to trade. A DOCA may also involve moratoriums on creditor enforcement, variation of contractual rights, or sale of business assets. The terms of each DOCA are negotiated between the administrator and significant creditors, then voted on by all creditors. Once executed, the DOCA binds all unsecured creditors, including those who voted against it.
Liquidation & Asset Realisation
When liquidation is the outcome, the liquidator's role is to realise the company's assets, investigate its affairs, and distribute proceeds to creditors in the statutory priority order. The costs of liquidation (including the liquidator's remuneration) are paid first, followed by employee entitlements, unsecured creditors, and finally (if anything remains) shareholders. The liquidator has extensive investigative powers and may pursue claims against directors for insolvent trading, recover unfair preferences and uncommercial transactions, and report suspected offences to ASIC. Creditors should lodge proofs of debt promptly and may request information from the liquidator about the progress of the administration.
Voluntary Administration & Liquidation FAQs (Queensland Law)
What is the voluntary administration (VA) process?
At our firm, voluntary administration under Part 5.3A of the Corporations Act begins when directors appoint an administrator. The administrator takes control, investigates affairs, and convenes creditor meetings. The second meeting (within 20-30 business days) decides on DOCA, liquidation, or return to directors.
What is a Deed of Company Arrangement (DOCA) in administration?
At our firm, a DOCA is a binding arrangement between the company and creditors governing how the companys affairs will be dealt with. It typically provides for creditors to receive a dividend (funded by trading profits or third-party contributions) while the company continues trading.
What are winding up orders in liquidation?
At our firm, a winding up order is a court order (court liquidation) or shareholders resolution (creditors voluntary liquidation) that puts a company into liquidation. The liquidator realises assets, investigates affairs, and distributes proceeds to creditors in statutory priority.
What are liquidator powers under s 477 of the Corporations Act?
Our team helps clients with matters under section 477 gives liquidators broad powers including: taking control of company property, carrying on business, selling assets, compromising debts, instituting legal proceedings, and examining persons about company affairs. Most powers require court or creditor approval.
What are voidable transactions and unfair preferences?
Under this provision, our team helps clients understand their rights. under s 588FA of the Corporations Act, an unfair preference is a transaction where a creditor receives more than they would in a liquidation, within 6 months (or 4 years for related parties) before the relation-back day. The liquidator can recover the amount.
Voluntary Administration & Liquidation Services
- Directors' advice on voluntary administration appointment decision
- Preparation for administration including books and records review
- Creditor liaison during administration period
- Deed of company arrangement (DOCA) negotiation and voting
- Creditors' voluntary liquidation process management
- Court-ordered winding-up response and advice
- Proof of debt preparation and lodgement
- Creditor voting at meetings: strategies and considerations
- Liquidator investigations and report to ASIC
- Uncommercial transaction and unfair preference claim defence
- Director identity and phoenix activity issues
- Post-liquidation recovery and estate finalisation
Last updated: July 2026
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