A PATH FORWARD
A plain-English guide to what voluntary administration actually means for your company.
Written by Jason, founder of Liquidation Help Australia — we've been exactly where you are.
Voluntary Administration in Australia: What It Actually Means for Your Company
Voluntary Administration: The Short Answer
Voluntary administration is a formal process where an independent, registered administrator temporarily takes control of a company from its directors. It's designed to do one of two things: find a way to save the company (or part of it), or if that's not possible, wind it up in a way that gets creditors a better outcome than an immediate liquidation would. It can be started by the company's own directors (the most common path), by a secured creditor holding security over most of the company's assets, or by a liquidator already involved with the company.
What Actually Happens, Step by Step
Once an administrator is appointed, a strict, fast-moving legal process unfolds — here's what actually happens, from the administrator taking control through to the creditors' meetings that decide the company's future.
Once appointed, the administrator takes over all the powers a company's directors normally hold. Directors don't lose their positions, but they lose day-to-day control — the administrator runs the business during this period, including deciding whether to keep trading.
The Administrator Takes Control
While the company is in administration, unsecured creditors generally can't start or continue legal action against the company without the administrator's or a court's permission. Secured creditors are also generally held off, and property owners can't reclaim their property. This is what creates the actual breathing room to work out a plan — it's the main practical difference from just being pursued for debts with no process in place.
Creditors Get a Breathing-Space Freeze
The first creditors' meeting has to happen within 8 business days of the administrator's appointment — that's just an introduction. The one that matters is the second meeting, where creditors vote on the company's future: it must be held within 25 business days (extended to 30 around Christmas or Easter), and creditors need at least 5 business days' notice. These aren't soft guidelines — they're statutory deadlines the administrator has to meet.
The Two Creditors' Meetings (and the Real Deadlines)
There are three ways this can go. The company can return to the directors' control, if creditors vote against any further action. Creditors can accept a Deed of Company Arrangement (DOCA) — a binding agreement on how the company will pay its debts and keep operating, which must be signed within 15 business days of the meeting that approves it. Or the company can move into liquidation, with the administrator typically becoming the liquidator. Which outcome creditors choose usually comes down to which one is likely to recover them the most money.
Three Possible Outcomes
Voluntary Administration vs Liquidation vs Small Business Restructuring — Which Applies to You?
These three get confused constantly, and picking the wrong one — or not knowing they exist — costs directors options. In broad strokes: voluntary administration is used when there's a realistic chance of saving the business, or at least getting creditors a better outcome than shutting it down immediately — an independent administrator runs the company temporarily, ending in one of the three outcomes above. Liquidation is used when the business has no viable future: the company stops operating, a liquidator sells its assets and pays creditors by legal priority, and the company is eventually deregistered, with no path back to director control. Small Business Restructuring (SBR) is a newer, faster process built specifically for small companies — eligibility depends on total liabilities and other conditions — where directors stay in control of daily operations throughout, working with a practitioner to put a debt restructuring plan to creditors. It's generally faster and less disruptive than voluntary administration, but only available if the company meets the eligibility criteria. If you're not sure which of these actually fits your situation, that's normal — it depends on specifics like your company's total liabilities, how many creditors you have, and whether there's a realistic buyer or turnaround plan. That's exactly the kind of thing worth a proper conversation about rather than guessing from a website.
Frequently asked questions.
No — they're different processes. Administration is specifically about working out what happens next, and liquidation is only one of three possible outcomes, not the default one.
Does voluntary administration mean my company is being liquidated?
You keep your title, but the administrator takes over running the business during the process. If the company returns to your control — one of the three possible outcomes — you're back running it as before.
Do I lose my job or role as director if the company goes into administration?
Generally no — unsecured creditors need the administrator's or a court's permission to start or continue legal action once administration begins. That's the main protection it creates.
Can creditors still chase the company for money during administration?
The timeline is set by law — typically around 25 to 30 business days from appointment to the second creditors' meeting, where the company's future is decided. A Deed of Company Arrangement, if agreed, is then signed within 15 business days of that meeting.
How long does voluntary administration take?
What's the difference between voluntary administration and Small Business Restructuring?
The biggest practical difference is control — in SBR you stay in charge of daily operations the whole time; in voluntary administration, an independent administrator takes over. SBR also has strict eligibility rules that voluntary administration doesn't have.
Most commonly, the company's own directors, via a board resolution. It can also be initiated by a secured creditor with security over most of the company's assets, or by an existing liquidator.
Who can appoint a voluntary administrator?
What's the difference between voluntary administration and receivership?
They're both formal insolvency processes, but different people control them for different reasons. In voluntary administration, an independent administrator is appointed (usually by the company itself) to consider every option for the whole company. In receivership, a secured creditor — like a bank holding a charge over specific assets — appoints a receiver to recover those particular assets and get that one creditor paid; it isn't about finding the best outcome for the company overall. The two can even run at the same time.
Talk to someone who understands what you're facing.
I'm not a liquidator or a registered administrator myself — Liquidation Help Australia is an independent referral and information service. What I can do is help you understand what's actually going on and connect you with a properly qualified, registered professional who handles voluntary administrations, so you're getting real advice instead of guessing from a website.
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