Voluntary administration is an option for a company that is insolvent or likely to become insolvent, and would like to restructure or settle its debts while continuing to trade. Voluntary administration also allows the director of a company to put forth a proposal to its creditors to negotiate the debt and potentially settle it for less than the original amount.
During a voluntary administration, a licensed insolvency practitioner acts as the appointed administrator and helps manage the company while a plan for its future is created. This period is usually around 30 days and the company’s creditors will have the option of accepting the director’s proposal to settle debts, voting the company into a deed of company arrangement or if the proposal isn’t accepted then the company would usually be voted into liquidation. The third option (which isn’t usually acted upon) is to vote the control of the company back to the company directors.
A successful voluntary administration will result in the company being able to avoid having its assets sold off or having the company liquidated altogether.
ISA can help you with information about all aspects of voluntary administration, 24 hours a day and 7 days a week, on 1800 003 883.