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    External Admin Summary

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    jroflcopter
    Forms of external administration include voluntary administration, receivership, and liquidation. Voluntary administration involves an insolvent company appointing an administrator to take charge. Receivership occurs when a secured creditor appoints a receiver because the company has defaulted on a loan. Liquidation is where a liquidator distributes company assets to creditors and shareholders and ends the business. Each form impacts directors, members, and creditors differently and has varying processes for commencement and conclusion.

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    External Admin Summary

    Uploaded by

    jroflcopter
    7 views2 pages
    Forms of external administration include voluntary administration, receivership, and liquidation. Voluntary administration involves an insolvent company appointing an administrator to take charge. Receivership occurs when a secured creditor appoints a receiver because the company has defaulted on a loan. Liquidation is where a liquidator distributes company assets to creditors and shareholders and ends the business. Each form impacts directors, members, and creditors differently and has varying processes for commencement and conclusion.

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    External Administration

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    External Admin summary

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    Forms of external administration include voluntary administration, receivership, and liquidation. Voluntary administration involves an insolvent company appointing an administrator to take charge. Receivership occurs when a secured creditor appoints a receiver because the company has defaulted on a loan. Liquidation is where a liquidator distributes company assets to creditors and shareholders and ends the business. Each form impacts directors, members, and creditors differently and has varying processes for commencement and conclusion.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    Download as docx, pdf, or txt
    7 views2 pages

    External Admin Summary

    Uploaded by

    jroflcopter
    Forms of external administration include voluntary administration, receivership, and liquidation. Voluntary administration involves an insolvent company appointing an administrator to take charge. Receivership occurs when a secured creditor appoints a receiver because the company has defaulted on a loan. Liquidation is where a liquidator distributes company assets to creditors and shareholders and ends the business. Each form impacts directors, members, and creditors differently and has varying processes for commencement and conclusion.

    Copyright:

    © All Rights Reserved
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    Flag for inappropriate content
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    of 2

    Forms of external administration

    Voluntary
    Administration

    Receivership

    Liquidation

    What is it?
    Process where an insolvent Receiver
    Company assets distributed
    company appoints an
    appointed by
    to creditors & shareholders &
    external administrator to
    secured creditor
    business ends
    take charge
    because co has
    defaulted in loan
    SD can be challenged
    repayment
    How is it commenced?
    Board Resolution
    SECURED
    Voluntary (creditors,
    Major Security Creditor
    creditors
    members)
    Liquidator
    Court (rare)
    ANYONE it owes money to
    Ss436A-C
    S420 power to
    Statutory demand 21 days
    receivers

    Insolvency Presumption
    How does it end?
    Co isnt insolvent
    Receiver paid
    Deregistration
    DOCA1 (save!)
    Or go back to VA &
    debt
    Enter liquidation
    Enter
    receivership
    (s439C)
    liquidation
    Impacts on directors/members/creditors
    Directors
    Business
    Trading ends, legal entity
    Deliver co books
    continues trading
    gone when deregistered.
    (s438B) & submit RATA
    Directors
    Directors
    within 5 days 438B(2)
    Powers suspended
    Lose
    Powers suspended
    Report as to affairs
    management
    Members
    Members
    powers
    Voids share transfer
    Creditors
    (s437F)
    Secured can enforce
    Unsecured cant
    Creditors
    Employees dismissed

    Creditors cant sue

    MAJOR security
    creditor can enforce
    security (13 days)
    Other
    Quick & cheap

    Receiver
    Order pf priority (s556)

    Admin accountable
    1. Secured creditors
    accountable
    2. Expenses of winding
    Easy to start
    for debts
    up/VA
    Minimal court involved
    incurred
    3. Unpaid wages super
    during
    other employee
    DOCA (no compulsory
    receivership
    entitlements
    court scrutiny)
    1 Test = do creditors receiver higher dividend than in liquidation? Pt 5.3A

    Abuse of VA against
    creditors (but DOCA can
    be terminated)
    Liquidators recovery
    provisions for voidable
    transactions2 doesnt
    apply

    Weak co likely
    to liquidate

    4. Unsecured creditors
    5. Shareholders
    Power to examine (s596A)
    Powers of recovery (in
    footnote)
    Unfair director related
    transaction s588FE(6A)

    2 Unfair preferences s588FA , loans s588FD, uncommercial transactions s588FBA

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