Voluntary administration is a formal insolvency process designed to provide an independent assessment of a company's financial position and determine the best available course for its future.
Voluntary administration is a formal insolvency process designed to provide an independent assessment of a company's financial position and determine the best available course for its future.
For directors facing serious financial pressure, voluntary administration can provide a structured process in which the company's position is assessed and creditors are given an opportunity to consider its future.
Early action can improve the range of options available and reduce uncertainty for directors, creditors and stakeholders.
Book a ConsultationDirectors may consider voluntary administration when they believe the company is insolvent or is likely to become insolvent. Recognising these signs early is important.
Once appointed, the voluntary administrator takes control of the company and investigates its business, property, affairs and financial circumstances.
The administrator considers the options available and ultimately reports to creditors.
Depending upon the circumstances, potential outcomes can include returning control of the company to its directors, entering into a Deed of Company Arrangement, or placing the company into liquidation.
Potentially.
One of the important features of voluntary administration is that the administrator can assess whether continuing to trade the business during the administration is appropriate.
Every situation is different, and continued trading will depend upon the financial and commercial circumstances of the company.
A Deed of Company Arrangement, commonly referred to as a DOCA, is an arrangement between a company and its creditors dealing with how the company's affairs and debts will be addressed.
A DOCA may provide an alternative to liquidation where creditors consider the proposal offers a preferable outcome.
Directors often have more options when financial problems are identified early.
Seeking professional insolvency and restructuring advice does not automatically mean placing a company into liquidation or administration. It provides an opportunity to understand the company's position and consider the available options.
JLA Insolvency & Advisory assists directors and businesses with voluntary administration, restructuring and corporate insolvency matters in Sydney and throughout Australia.
Contact JLAIf this situation affects you, your business or a company you deal with, confidential advice can help clarify the next step.