Voluntary Administration

Voluntary administration is designed to resolve a company’s future. The independent registered voluntary administrator, from LangdonGrant, takes full control of the company. This allows the director or third-party to find a way, if possible, to save the company or its business.

  • Where not possible for the director or third-party to establish a plan to save the company or its business, the voluntary administrator aims to administer the company’s affairs to obtain a better return (payment) to creditors than if the company had been immediately wound up. One mechanism for achieving this is a deed of company arrangement (“DOCA”).


    A DOCA is a binding arrangement between a company and its creditors governing how the company’s affairs will be dealt with. It is agreed to after the company enters voluntary
    administration. The team at LangdonGrant will assist with the formation of a suitable DOCA. It is then proposed by the directors or third-party to the creditors for their consideration.

The administration process

  • 1

    Appointment

    Directors place company into Voluntary Administration by resolution of the board.

  • 2

    First CreditorsMeeting

    This meeting is to be held within 8 business days.


    Here, creditors will decide whether:

    • To form a committee of inspection and, if formed, who will be on the
      committee
    • They want the existing administrator to be removed and replaced by an
      administrator of their choice
  • 3

    Voluntary Administrators Report

    The Voluntary Administrator is to provide creditors a detailed report on:

    • Summary of the DOCA
    • Analysis of the return vs return in liquidation
    • The Voluntary Administrators investigations
  • 4

    Second Creditors Meeting

    This meeting is to be held within 25 business days of being appointed (or 30 business days if the appointment is around Christmas or Easter).


    At this meeting, creditors are provided the opportunity to decide the company’s
    future.

  • 5

    Execute DOCA

    Once creditors accept the proposed DOCA, the formal DOCA is prepared and executed.


    The Voluntary Administrator will manage the DOCA process and return to
    creditors.

  • 6

    Final Stage

    Once the DOCA is finalised, control of the company reverts to the board of directors, and they move forward without former liabilities.

  • Note: in the event where the DOCA is not accepted, the company will either exit Voluntary Administration and revert to the
    board of directors if all debts are paid, or enter Liquidation if debts remain.