Voluntary Administration and Deed of Company Arrangement
What is Voluntary Administration?
A Voluntary Administration is an option for businesses that are unable to pay their debts and want to resolve their future to continue operating. A voluntary administration occurs when the company directors seek professional assistance and appoint an Administrator (such as Insolvency Options).
The purpose of a voluntary administration is to save the business if possible. It is also to seek immediate debt relief for company directors by appointing an Administrator to take complete control over the business’ operations during the Voluntary Administration period. This happens whilst the future of the company is considered.
One of the main differences between a Small Business Restructuring Plan and a Voluntary Administration is that there are no strict eligibility requirements for a voluntary administration. Both options are for business owners that wish to continue their business operations into the future.
How the Process Works
Under a Voluntary Administration, the experts at Insolvency Options assess the company’s debts, assets, affairs, and financial situation.
This assessment is reported back to creditors (all parties that are owed money, including employees), with various available options. This report recommends solutions for the greater good of the creditors and all parties involved. Some of these recommendations may include ending the administration and returning control back to the business owners, seeking approval for a Deed of Company Arrangement to pay part or all of its debts, or winding up the company.
A Deed of Company Arrangement (DOCA) is a formal agreement between the company and its creditors. The aim of a Deed of Company Arrangement is to offer an amount to creditors in satisfaction of their debt. It is an alternative to liquidating the company. The creditors must agree to the Deed of Company Arrangement in order for the company to continue operating. If the Deed of Company Arrangement fails or creditors are unwilling to come to an agreement, the company will enter into the liquidation process.
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Frequently Asked Questions
Other Business Debt Solutions
When faced with business financial stress, we know things can be daunting. However, under the circumstances you may want to continue trading but don’t know how. Alternatively, you may want to wind up your business affairs or you may just need some advice.
Insolvency Options are the experts you can turn to when you need help.
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Our initial step in your consultation is to listen to best try and understand your situation. Your confidentiality is just as important to us as it is to you.
Our consultation also covers what your options are; the benefits, considerations, costs and expected outcomes of each option. Anything that you have disclosed to us during this consultation is kept completely confidential.