Voluntary Administration
28 October 2022
Objective of voluntary administration
The primary objective of a VA is to maximise the chances of a company (or as much as possible of its business), being able to continue to trade. If that is not possible, the secondary objective of a VA is to achieve a better return for the company's creditors than would likely be achieved if the company had been immediately wound up.1
Voluntary administration procedures
The VA procedure:
- facilitates the appointment of an independent administrator (who has consented to act as such and is a registered liquidator) to take control of the company and its business2
- provides for the administrator to run that business;3 and
- requires the administrator to assess the three options available for the future conduct of the company's business; namely:
-
deed of company arrangement (DoCA);
-
liquidation;
-
return of control of the company to its directors; and
and to recommend to the company's creditors which of these options is best suited to their interests.4
The typical timeline for the conduct of a voluntary administration is as follows:
