Voluntary administration

An administrator must be a registered liquidator, who is a person approved in writing as a liquidator by the Registrar. 

Yes.

When the corporation is insolvent or is likely to become insolvent in the future.

Yes. A voluntary administrator cannot be appointed if:

• the corporation is already under special administration
• the Registrar has given the corporation a show cause notice (unless the Registrar has agreed in writing that a voluntary administrator can be appointed) 

To place a corporation under voluntary administration, the directors will need to consider the following process: 

1. Speak to a registered liquidator who has to provide written agreement to their being appointed as a voluntary administrator.
2. The directors must then arrange a meeting of the directors.  
3. At the meeting, the directors must pass a resolution that in their opinion, the corporation is insolvent or is likely to be insolvent in the future. The minutes of the meeting should record the appointment.
4. The directors then provide the registered liquidator notice that they have been appointed as a voluntary administrator. 

Immediately upon appointment, the voluntary administrator takes control of the corporation. The directors lose all control.

The directors have to assist the voluntary administrator in relation to investigations into the corporation’s property, books and records and other inquiries as to the conduct of the business.

Learn more about insolvency for directors.

During the administration the creditors of the corporation may vote in favour of a Deed of Corporation Arrangement (DOCA). A DOCA is a binding arrangement between a corporation and its creditors determining how the corporation’s affairs will be handled. The purpose is to keep the corporation operating, if possible, and to provide a better return to creditors than if the corporation was to wind up and be deregistered. 

If a DOCA is not agreed, then the corporation will go into liquidation.