A Deed of Company Arrangement (DOCA) is a binding arrangement between a company and it’s creditors. This arrangement governs how the company’s affairs will be dealt with – this is a result of the company entering into a Voluntary Administration with the approval of the creditors. A DOCA generally offers a one off payment, or instalments to the creditors of the company for full and final settlement of the company’s debts.

A Creditors’ Voluntary winding up is when the company is insolvent. In this instance this occurs when the members (shareholders) resolve by a special resolution to wind the company up. The members (shareholders) appoint the liquidator who would then take control of the company and investigate the affairs of the company.

A Member’s Voluntary Winding Up is when the shareholders of a solvent company elect a voluntary winding up resolution. In this process the shareholders appoint a liquidator to realise the assets of the business, in order to then distribute the proceeds to company members (shareholders) usually for tax benefits.

An Official Liquidation is when a creditor/creditors of the company make an application with the courts to wind up the company due to their debts not being paid. This allows for a realisation of the company assets, investigations into the company’s failure and distribution of their assets among the creditors.

A Provisional Liquidation is when the court appoints a liquidator to the company for the period between the filing of the application to wind up the company and the court hearing the application.

A Receivership is a form of external administration which may apply to corporations, partnerships and individuals. Corporate receiverships are the most common and they are typically initiated when a secured creditor e.g. a bank appoints a receiver. This is usually due to default under a loan contract, and a receiver is appointed in order to recoup its loan through sale of assets subject to its security.

A restructure and turnaround is usually made when there are significant problems jeopardising the company. The purpose of restructuring and turnaround is to eliminate financial harm and improve the business. This can include but is not limited to change payments, operations or structure of the company.

Personal Insolvency Agreements or Part X, is a formal way to deal with an individual’s unmanageable debt. This agreement generally involves coming to an arrangement with your creditors to settle the debts without having to become bankrupt. A legally binding agreement is entered into between the individual and the creditors, where the creditors are paid in full or in part – for this to be successful the creditors need to vote and accept the offer by 75% of the value voting in favour with a majority in number.

Bankruptcy is a legal proceeding involving a person or business who is unable to repay their outstanding debts. The process can be initiated by either the debtor (which is more common) or a creditor who files a petition with the court. Once the petition is filed, the debtor’s assets are assessed, and valued – these assets are then used to repay the outstanding debts. Once the process has been completed the debtor is relieved of all debt obligations that existed prior to becoming bankrupt, other than excluded debts.

An Informal Administration is generally used when the company, or individual has very few creditors. This can avoid the insolvency stigma and investigations into the affairs of the company or individual. This arrangement only binds the known creditors of the company or individual in the agreements.

A Forensic Investigation involves accountants investigating the affairs of a company and/or individual. They may investigate crimes such as fraud and give expert testimony in Court trials or disputes between parties for civil and commercial disputes.