VOLUNTARY ADMINISTRATION

Helping Businesses Navigate Financial Difficulty with Confidence

When a business is experiencing financial distress, acting early can make a significant difference. Voluntary Administration is a formal insolvency process designed to give financially troubled companies an opportunity to assess their future, protect business value, and explore the best possible outcome for creditors, employees, and stakeholders.

At Bari.co.nz, we provide professional guidance to help directors understand the Voluntary Administration process, their legal obligations, and the options available. We work closely with businesses to explain the process in clear, practical terms and help them make informed decisions during challenging times.

What is Voluntary Administration?

Voluntary Administration (VA) is a legal process under New Zealand insolvency law that allows an independent administrator to take temporary control of a financially distressed company. The administrator investigates the company's financial position and recommends the most appropriate course of action for creditors.

The primary objective is to maximise the chances of the company continuing to operate or, if that is not possible, to achieve a better outcome for creditors than would likely result from immediate liquidation.

Voluntary Administration may be appropriate when a business:

Is experiencing serious cash flow problems.
Is unable to pay debts when they fall due.
Is facing legal action from creditors.
Needs protection while financial options are explored.
Wants to restructure the business.
Requires time to negotiate with creditors.
Wishes to preserve business value where possible.

Why Choose Voluntary Administration?

Benefits of Voluntary Administration

Independent Financial Assessment

An independent administrator reviews the company's financial affairs and provides recommendations based on the best interests of creditors.

Protection from Creditor Action

Once an administrator is appointed, many creditor enforcement actions are temporarily paused, giving the company valuable time to assess its financial position.

Opportunity to Restructure

Businesses that remain viable may have the opportunity to restructure operations, reduce debt, or improve financial performance.

Better Outcomes for Creditors

Voluntary Administration aims to achieve a better return for creditors than an immediate liquidation whenever possible.

Business Continuity

Where practical, business operations may continue while restructuring options are considered.

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When Should You Consider Voluntary Administration?

Company directors should:

Cooperate fully with the administrator.
Provide complete and accurate financial records.
Assist with investigations.
Continue complying with legal obligations.
Act honestly and in good faith.
Avoid disposing of company assets without proper authority.

Professional advice can help directors understand their responsibilities throughout the process.

Voluntary Administration may be appropriate when a business:

Is experiencing serious cash flow problems.
Is unable to pay debts when they fall due.
Is facing legal action from creditors.
Needs protection while financial options are explored.
Wants to restructure the business.
Requires time to negotiate with creditors.
Wishes to preserve business value where possible.

Early advice often provides more options and may improve the likelihood of a successful restructuring.

Director Responsibilities During Voluntary Administration

Why Choose Voluntary Administration

Bari.co.nz

Professional Accounting, Tax & Business Advisory Services

Helping individuals, entrepreneurs, and businesses across New Zealand achieve financial confidence through reliable accounting, taxation, bookkeeping, payroll, and business advisory services.

Book your free, no-obligation consultation today and discover how Bari.co.nz can help you achieve your financial goals.