How Does The Administration Begin?
HOW DOES THE ADMINISTRATION BEGIN?
Appointment by the directors
Voluntary Administrators are normally appointed by the directors of the company. Appointment is initiated when the directors of the company resolve that the company is, or is likely to become, insolvent (section 436A of the Corporations Act, 2001).
The directors simply have to be satisfied that there is a likelihood that the company will be insolvent at some future time.
Appointment by a liquidator or provisional liquidator
An administrator can be appointed by a liquidator or a provisional liquidator (s436B). The liquidator or provisional liquidator may act as the administrator provided that the Court’s approval is obtained.
Appointment by Secured Creditors
A secured creditor who has a charge on “the whole, or substantially the whole, of a company’s property” may also appoint an administrator: s436C.
You can read more about the Voluntary Administration process here.