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ARTICLE · 17 MAY 2023

Understanding insolvency law in Australia

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Understanding the different types of insolvency is crucial for making decisions about managing a company's financial difficulties.

AustraliaInsolvency/Bankruptcy/Re-Structuring
Vincent Berry
Vincent Berry
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Before delving into the different types of corporate insolvency, it is important to understand the legal framework that governs insolvency in Australia. The main piece of legislation that deals with corporate insolvency is the Corporations Act 2001 (Cth) (the Act). The Act sets out the rules and procedures for dealing with companies that are in financial distress.

The Act provides for three main types of corporate insolvency:

  • voluntary administration
  • receivership
  • liquidation

Each type of insolvency has its own unique features and procedures. For business owners, understanding the differences between these types of insolvency is crucial for making informed decisions about managing a company's financial difficulties.

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