Compare your options
A side-by-side comparison of the three formal corporate insolvency frameworks under Australian Commonwealth law, examining governance, operational impact, costs, and director liability.
| Feature | Small Business Restructuring | Voluntary Administration | Liquidation |
|---|---|---|---|
| Who stays in control | Directors remain in control of day-to-day operations and trading throughout. | Control of operations passes entirely to the independent voluntary administrator. | Control passes to the liquidator; powers of company directors cease immediately. |
| Trading continues | The company continues to trade normally under existing management. | The administrator decides whether trading continues or operations pause. | Trading ceases immediately, except for limited work to realise company assets. |
| Typical duration | 20 business days to propose a plan, followed by 15 business days for creditor voting. | Approximately 20 to 30 business days before the second statutory meeting of creditors. | Typically 6 to 18 months, or longer if complex asset investigations arise. |
| Typical cost | Fixed upfront practitioner fee agreed in writing before appointment. | Variable hourly rates for the administrator and legal advisers, often exceeding $50,000. | Paid from company asset realisations or funded upfront by the appointing director. |
| Effect on the director | Protects against insolvent trading claims and remits personal 21-day DPN liabilities. | Moratorium on personal guarantees during administration; potential recovery actions later. | Liquidator investigates past conduct; potential claims for insolvent trading or director loans. |
| Creditor involvement | Creditors vote on the restructuring plan by electronic ballot without physical meetings. | Creditors attend two formal statutory meetings to decide the company’s future. | Liquidator reports to creditors periodically; creditors may form a committee of inspection. |
| Public record | Published notice on the ASIC published notices website; trading continues under standard name. | Public ASIC notice and mandatory notification to suppliers, banks, and customers. | Public ASIC gazette notice; company status changes permanently to in liquidation. |
| Best suited to | Viable businesses with under $1M in unsecured debt seeking to compromise liabilities. | Larger companies exceeding $1M in debt needing complex turnaround or business sale. | Insolvent companies with no viable future that must be wound up cleanly. |
Who stays in control
- Small Business Restructuring
- Directors remain in control of day-to-day operations and trading throughout.
- Voluntary Administration
- Control of operations passes entirely to the independent voluntary administrator.
- Liquidation
- Control passes to the liquidator; powers of company directors cease immediately.
Trading continues
- Small Business Restructuring
- The company continues to trade normally under existing management.
- Voluntary Administration
- The administrator decides whether trading continues or operations pause.
- Liquidation
- Trading ceases immediately, except for limited work to realise company assets.
Typical duration
- Small Business Restructuring
- 20 business days to propose a plan, followed by 15 business days for creditor voting.
- Voluntary Administration
- Approximately 20 to 30 business days before the second statutory meeting of creditors.
- Liquidation
- Typically 6 to 18 months, or longer if complex asset investigations arise.
Typical cost
- Small Business Restructuring
- Fixed upfront practitioner fee agreed in writing before appointment.
- Voluntary Administration
- Variable hourly rates for the administrator and legal advisers, often exceeding $50,000.
- Liquidation
- Paid from company asset realisations or funded upfront by the appointing director.
Effect on the director
- Small Business Restructuring
- Protects against insolvent trading claims and remits personal 21-day DPN liabilities.
- Voluntary Administration
- Moratorium on personal guarantees during administration; potential recovery actions later.
- Liquidation
- Liquidator investigates past conduct; potential claims for insolvent trading or director loans.
Creditor involvement
- Small Business Restructuring
- Creditors vote on the restructuring plan by electronic ballot without physical meetings.
- Voluntary Administration
- Creditors attend two formal statutory meetings to decide the company’s future.
- Liquidation
- Liquidator reports to creditors periodically; creditors may form a committee of inspection.
Public record
- Small Business Restructuring
- Published notice on the ASIC published notices website; trading continues under standard name.
- Voluntary Administration
- Public ASIC notice and mandatory notification to suppliers, banks, and customers.
- Liquidation
- Public ASIC gazette notice; company status changes permanently to in liquidation.
Best suited to
- Small Business Restructuring
- Viable businesses with under $1M in unsecured debt seeking to compromise liabilities.
- Voluntary Administration
- Larger companies exceeding $1M in debt needing complex turnaround or business sale.
- Liquidation
- Insolvent companies with no viable future that must be wound up cleanly.
When restructuring is not appropriate
Small Business Restructuring requires that the company is insolvent or likely to become insolvent, yet retains a viable underlying commercial model. If the business has ceased trading, lacks shareholder support, owes more than $1,000,000 in unsecured liabilities, or cannot bring employee entitlements up to date, voluntary administration or liquidation may be the only statutory alternatives.
What happens if creditors vote no
If a majority in value of creditors rejects the proposed restructuring plan at the end of the 15 business day voting period, the restructuring process terminates automatically. Directors immediately regain full responsibility for the business and must decide whether to continue trading under safe harbour, propose voluntary administration, or wind up the company.
Where to get an independent view
Directors should consult a registered restructuring practitioner or independent insolvency accountant before taking any formal statutory step. An initial assessment can model creditor voting outcomes, verify liability caps, and determine whether Part 5.3B offers the highest chance of commercial survival.
Assess your company against the statutory criteria for Small Business Restructuring.