When your company is faced with financial distress and insolvency issues, voluntary administration may be one of the solutions to consider. Voluntary administration is designed to keep your company afloat and improve the company’s financial position with the assistance of a qualified administrator. Here is a easy summary of the steps in voluntary administration:
Step 1: Initiation from directors
The decision to appoint an administrator will be done in writing and through a board resolution. A company may also be placed under administration by a liquidator or secured creditor. When the administrator is appointed the voluntary administration will begin.
Step 2: First meeting with creditors
The first meeting held with creditors is required to be held within eight business days after the voluntary administration begins. In this meeting creditors can vote whether to replace the administrator that the company has chosen, which will require written consent from an alternative administrator post meeting.
Step 3: Investigation and business report sent to creditors
After the meeting, the administrator will take over the company’s assets and affairs, the right to run the business and investigate the status of the company and send a report to the creditors.
Step 4: Second meeting with creditors
The second meeting is required 20 to 25 days after the administrator was first appointed. The purpose of the meeting is for the administrator to present their report and the creditors to vote on the following options:
- Return the company back to the directors, or
- Enter a deed of company arrangement, or
- Place company in liquidation
If you would like to learn more about voluntary administration or considering appointing an administrator you should contact us on 1800 210 073. Our insolvency hotline is open 24 hours 7 days a week.