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Voluntary Administration Newcastle

If your company is facing unmanageable debts, initiate Voluntary Administration to get it back on track

Voluntary Administration Can Help Turn Your Business Around

Voluntary Administration or VA is an insolvency procedure which includes the appointment of an external Voluntary Administrator. Usually, it’s initiated by your company’s directors, or by a secured creditor. VA is used regularly by companies in distress, mainly because directors are required to take steps to avoid trading while insolvent as it can attract severe consequences. It is a criminal offence to knowingly incur debts while insolvent. As a company director, you could also be held personally liable for your business’ debts.

To avoid insolvent trading and the personal liability risks involved, its best you act fast and make a genuine attempt to turn your business around before it’s too late. Implementing a business turnaround or restructure could be an option before you initiate a Voluntary Administration. However, if you wait too long, Company Liquidation may end up being a last resort.

The Advantages of Voluntary Administration

Voluntary Administration offers a number of advantages if your company is in trouble. It can facilitate a turnaround, help you explore your options and protect you from the legal risks of trading insolvent.

Inexpensive Process

Voluntary Administration can be relatively inexpensive to initiate. You need to appoint an external Administrator and hold creditor meetings and the costs of this might be relatively insignificant compared to other methods.

Helps You Avoid Insolvent Trading

One of the major advantages of VA is that it allows you to avoid insolvent trading. You have a duty to prevent your company from trading while insolvent. By pausing your company’s operations and temporarily relieving you of your duties, the VA process protects you from further risks while your company gets help and explores its options.

Assists Your Company Return to Profitability

Whether it’s through a Deed of Company Arrangement (DOCA) or by returning to trading with insights from the Voluntary Administrator, going into VA can end up helping your company return to profitability. The DOCA could outline a way for your company to return to operation with a reduced debt burden in agreement with your creditors. Instead of winding up your company and going into Company Liquidation, your company is given a second chance to continue trading and operating.

Gives a Moratorium on Your Company's Debts

Once your company enters VA, there’s a moratorium placed on claims of company debts from your creditors. This can give you much-needed breathing space if your company is in financial strife with mounting debts. It allows time to develop a viable plan for the future of your company while being relieved from the pressure of constant demands to repay your creditors.

Improves Your Financial Position

In the VA process, the Voluntary Administrator reviews your company’s finances and makes recommendations moving forward. With the help of qualified experts such as the external Administrator, you might end up being in a better position to proceed trading or operating under a DOCA. Rather than reacting to market conditions and constantly dealing with your creditor’s demands, you can instead concentrate on evaluating the next best step to take.

Assists Your Creditors with an Independant Review

The VA process gives your creditors a chance to find out what’s happening in your company and get an independent review on your company’s finances. The Voluntary Administrator can offer a much needed independent opinion to help your company take the next step, whether it’s Liquidation, a DOCA or returning to trade as usual.

Provides an Opportunity for Compromise and Negotiation

Voluntary Administration can also be understood as a chance to compromise and negotiate with your creditors. Rather than constantly responding to their demands for payment, you have a chance to work with them to find a mutually rewarding outcome under a DOCA. Your company can end up retaining control and returning to profitability with a clear plan for debt relief moving forward under a DOCA.

Why Choose Revive Financial?

At Revive Financial, we understand the importance of working together to find the right solution for your company’s financial problems. Our expert team of Chartered Accountants, Registered Liquidators, Bankruptcy Trustees, Turnaround Specialists and Financial Advisors have over 43 years of combined experience helping Australian businesses through the Voluntary Administration proves in Newcastle.

We have been supporting local businesses regain their financial stability, from companies in clothing services to commercial sales industries who rely on our professional service and advice to guide them through the Voluntary Administration process and get their business back to trading profitably.

Is Voluntary Administration the Right Solution for Your Business?

If your company is struggling financially, there are a number of paths you can take to turn things around. Our experts at Revive Financial will help you decide if Voluntary Administration is the best option for your company.

Call us today on 1800 861 247.

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