The statutory purpose of voluntary administration is to provide for the business, property and affairs of an insolvent company to be administered in a way that:
Only a Registered Liquidator may be appointed as a Voluntary Administrator.
A Voluntary Administrator may be appointed by:
Most voluntary administrations result from a meeting of the company’s directors at which resolutions are passed that the company is insolvent, or likely to become insolvent, and that the company appoint a Voluntary Administrator. Such meetings can usually be convened relatively quickly and cheaply.
The process of a typical voluntary administration is as follows:
– execute a Deed of Company Arrangement, if proposed; or,
– for the administration to end; or,
– for the company to be wound up (i.e. to go into liquidation);
The advantages of a voluntary administration include:
Should the company and its directors formulate a proposal for Deed of Company Arrangement, which is accepted at the second meeting of creditors, then all creditors with provable debts are bound by the Deed of Company Arrangement.