A Receiver Has Been Appointed to Your Company: What Happens Now
Property Lending
Secured creditor enforcement · What you still control · Australia
Written for the director whose company it is, not for the creditor who appointed the receiver, not for the employees and not for someone buying the assets. This is what the appointment actually reaches, what to do in the first 24 hours, first week and first 10 business days, what other creditors can still do, and whether a payout or refinance can end the appointment before the secured assets are sold.
Quick Answer
When a receiver is appointed to an Australian company, the receiver takes control of the property covered by the relevant security or court order, while the directors remain in office with continuing duties. In the first 24 hours, establish exactly what property is caught, preserve the books and assets, and confirm who now controls bank accounts, receivables and payroll. In the first week, obtain a written payout figure if refinancing is being considered and start the ROCAP, which is generally due within 10 business days. Receivership is not a general moratorium: ASIC says legal action can still be started or continued against the company and an unsecured creditor can still seek to have it wound up.
Also called: receiver and manager appointed, company in receivership, secured creditor enforcement, controller appointed.
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| What has happened | The first thing that matters | Go to |
|---|---|---|
| The appointment has just been made and you have the letter | Establish what the security covers and exactly when it was enforced | Who appointed the receiver |
| You think the lender may not have followed its own security document | The grounds are narrow and the clock is short | Challenging the appointment |
| You are working out what you are still allowed to do | The appointment reaches the secured assets, not the whole company | What you still control |
| It happened in the last week or two | You have obligations to the receiver that are already running | What to do in the first fortnight |
| Your lender has issued a default notice or a demand, and no appointment has been made yet | The payout route is cheaper and easier now than it will be later | Before the appointment is made |
| You want to know whether the debt can simply be paid out | Redemption is a real route, and it has a closing window | Paying out the secured debt |
| Another creditor, the ATO or a supplier is also taking action | Receivership does not create a general moratorium against other creditors | Other creditors, statutory demands and winding up |
| You want to know who pays the receiver's fees or what happens to any sale surplus | Receiver costs come out of the secured realisations before the secured creditor is paid from those proceeds | Receiver fees and any surplus |
| You are worried customers or suppliers will see the appointment | The appointment is notified to ASIC and the company must change the way its name appears on public documents | ASIC record and company documents |
| You are worried about your house, your guarantee or a tax debt | Most of this arrives later, in a predictable order | Where you stand personally |
| You are looking at buying assets out of an insolvency sale | Different question, different page | Buying from a receiver or liquidator |
Who can appoint a receiver in Australia, and what does the appointment cover?
A receiver is appointed by a secured creditor or by a court, and the appointment reaches only the assets covered by that security. Everything else that happens over the next few months follows from those two facts, so the first thing to establish is which power is being exercised and over what property. The appointment document itself will say, and your solicitor should read it before you act on anyone's summary of it.
This matters because the words people use loosely describe different appointments with different consequences. A receiver takes control of the secured assets. A receiver and manager can also run the business that sits on those assets. A controller is the broader statutory category that covers both, plus a secured party that has simply entered into possession. A voluntary administrator and a liquidator are different appointments again, made under different parts of the Corporations Act 2001, and they can sit alongside a receivership rather than replacing it.
It also matters because this is not, in the ordinary case, something you can do yourself. The Australian Securities and Investments Commission states in its guidance for directors that this option is not normally available to a director, because a receiver, or receiver and manager, can only be appointed by a secured creditor or court. The one exception it names is narrow and worth knowing if it is yours: a director who is themselves a secured creditor can appoint a receiver, and the regulator tells them to seek advice before doing so. If someone has told you that appointing a receiver is a general option available to the board, that is wrong.
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| Appointment | Who can make it | What it reaches | What it means for the directors |
|---|---|---|---|
| Receiver | A secured creditor under its security, or a court | The property covered by that security interest | You lose control of the secured assets and keep everything outside them |
| Receiver and manager | A secured creditor under its security, or a court | The secured property plus the power to carry on the business attached to it | The business itself is run by the appointee while the appointment lasts |
| Controller | A secured creditor, including by entering into possession itself | The statutory category covering receivers and secured parties in possession | Same practical effect, and it is the term the statutory notification form uses |
| Mortgagee in possession | A mortgagee over real property | The mortgaged land and buildings only | Narrower than a general security, and often a refinance conversation rather than an insolvency one |
| Voluntary administrator | The board, a liquidator, or a secured party over the whole or substantially the whole of the property | The company and all of its affairs, subject to the secured party's rights | Directors' powers are suspended, and the company gets a restructuring window |
| Liquidator | Members, creditors or the court | The company as a whole, for winding up | The company is being wound up rather than continued |
| Terms you may have found from overseas | Not Australian appointments | Administrative receiver, official receiver, administration order, pre-pack and examinership are United Kingdom or Irish; chapter 11 and foreclosure are United States; a winding up petition is not the Australian filing | Read the Australian equivalent in the rows above, and treat any overseas page as describing a different legal system |
What receivership and a receiver actually mean here
Receivership is the state a company is in once a secured creditor has enforced its security by putting someone in control of the property that security covers. A receiver is the person appointed to do that: an external, registered professional whose primary duty runs to the appointing secured creditor, not to you and not to the company's other creditors. The company itself is not wound up by the appointment. It continues to exist as a legal entity, it continues to have directors, and it can come out the other side. That is a different thing from liquidation, which is the process of winding the company up.
This guide is for the company, not for someone buying its assets
If you have landed here because you are looking at buying plant, property or a business out of an insolvency sale, this is the wrong page and the answers you need are different ones. Read buying from a receiver or liquidator instead, which covers what you actually get, what the contract will not give you, and how to fund it. Everything below this line is written for the company and its directors.
Can you challenge a receiver appointment in Australia, and is it worth it?
Yes, but first separate a challenge to whether the appointment was valid from a complaint about what the receiver did after a valid appointment. A validity challenge can turn on whether the security was valid and enforceable, whether the relevant event of default occurred, whether any contractual demand or notice condition was satisfied, whether the appointment instrument actually exercised the lender's power, and whether the appointee was legally qualified. Those questions need the facility, security, default correspondence and instrument of appointment in front of a solicitor, and they need answering in days rather than weeks if a sale is moving.
What does section 418A do?
Section 418A of the Corporations Act 2001 is the statutory mechanism for resolving a specific doubt about whether a purported receiver or controller was validly appointed, or validly entered into possession or control under a security interest. The Act allows the purported controller, the company or a creditor of the company to apply to the Court, and the Court can declare whether the appointment, possession or control is valid. That is broader than saying only the company can challenge an appointment.
Misconduct after appointment is a different question. Section 434A gives the Court power to remove a controller for misconduct in connection with performing the controller's functions or exercising the controller's powers. A complaint that the appointment was invalid and a complaint that a validly appointed receiver later acted improperly should therefore not be collapsed into the same argument.
A procedural defect is also not automatically a permanent escape from enforcement. Depending on the security documents and the defect, fixing the step and making a fresh appointment may still be open to the secured creditor. That can make the commercial value of a challenge very different from its legal merits. If there is enough value to fund a payout or refinance, legal review and funding work can run at the same time rather than one after the other.
If the receiver is already marketing or contracting to sell a material asset, the question becomes urgent. Whether a sale can be restrained, unwound or allowed to complete is a case-specific court question. There is no published Australian rule saying an unconditional contract is the legal point of no return, so do not substitute a general web page for urgent legal advice where a contract is imminent.
What does the receiver control, and what do you still control?
The receiver controls the secured assets, and you still control everything outside the security. Most directors assume the appointment takes the whole company, and that assumption is what causes people to stop making decisions they are still legally required to make. The regulator's own language is precise about this. It states that control of the secured assets, which often includes the company's business, is taken away from the directors, and then, in the same guidance, that the directors continue to hold office, but their powers depend on the powers of the receiver and the extent of the assets over which the receiver is appointed.
Read those two sentences together and the shape of your position is clear. You have not been removed. Your duties as a director did not end when the receiver walked in, and neither did your obligation to keep proper books, to lodge what the company has to lodge, and to avoid trading on in a way that makes things worse. What changed is the set of assets you can deal with. Where the security is a general security over the whole of the company's property, that set can be very small. Where it is a specific security over particular plant or one property, a great deal may still be yours to manage. You cannot work out which of those you are in without reading the security document and checking what is actually registered against the company on the Personal Property Securities Register.
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| Area | Under the receiver's control | Still yours to deal with |
|---|---|---|
| Company property | The assets described in the security the appointment was made under | Company property that no security interest reaches |
| The business itself | The business carried on with those assets, where a receiver and manager was appointed | Any operation sitting outside the security, subject to your duties as a director |
| Selling and realising | Dealing with, selling or realising the secured property, and the timing and method of that sale | Putting evidence of value in front of the receiver, and pursuing a payout or refinance |
| Money coming in | Receipts generated by the secured assets while the appointment runs | Receipts from anything the security does not reach |
| Your office as a director | Nothing, the appointment does not remove you | Every duty that attaches to the office, including books, records and lodgements |
| Other appointments | Nothing, this is not the receiver's decision | Whether to appoint a voluntary administrator, and when |
| Your own advisers | Nothing | Your dealings with your accountant, your solicitor and any funder |
What should a director do in the first 24 hours, first week and first 10 business days?
In the first 24 hours, establish the scope and date of the appointment, preserve the company's books and assets, and confirm who now controls the bank accounts, receivables, payroll and any essential trading decisions. In the first week, get the security documents reviewed, request a written payout figure if an exit is being tested, start independent valuation work and map every parallel creditor deadline. By 10 business days, the report on company activities and property should be ready because that statutory clock starts with the appointment.
The obligations are to advise the receiver of the location of the company's property and deliver any of it you are holding, to give the receiver access to the books and records, to advise where other company records are kept, to provide the report on company activities and property within 10 business days in a receivership, and to meet with or report to the receiver to help their inquiries as reasonably required. Directors, officers and other people holding relevant books and records must not obstruct a receiver in carrying out their duties.
If you have read that it is a Report as to Affairs due within 14 days, that is the older description, and it is still circulating on Australian pages that rank well. The current instrument is ASIC Form 507, Report on company activities and property, and the regulator's guidance for directors puts it at 10 business days in a receivership. A practical trap sits on the form itself: it arrives as a Part A and a Part B, and ASIC states that Form 507 consists of Part A only, and that Part B does not form part of Form 507 and should not be lodged with ASIC. There is no lodgement fee, but late fees apply. Which provision your particular appointment is reported under is a question for your solicitor or for the receiver, not one to guess from a general page.
- First 24 hours: read the appointment document and the security it was made under. Identify what property the security covers, the date it was enforced, whether the appointment is as receiver or receiver and manager, and who now has authority over bank accounts, receivables, payroll and trading decisions.
- First 24 hours: preserve the assets and the evidence. Keep the books, records, emails, accounting data and asset information intact. Do not move secured property, redirect receivables or make unusual payments because you assume the appointment is defective.
- First week: diarise and start the ROCAP. Ten business days is not long, and the report asks for information that takes time to assemble if the books are behind.
- First week: give the receiver the access and assistance the law requires. The obligation includes access to books and records and information about company property. Where the boundary is disputed, get your solicitor to draw it rather than obstructing the receiver or surrendering material blindly.
- First week: ask for the payout figure in writing, with the date it is good to. Nothing about a refinance can be sized properly without the amount that must actually be discharged.
- First week: get independent valuation evidence moving. If there is equity in the security, the version a funder or a receiver can act on is supported value rather than the company's own estimate.
- First week: map the other creditor clocks. A statutory demand, winding-up application, ATO action, landlord step or personal director penalty does not disappear because a receiver has arrived. Put each deadline on the same timeline as the receiver's sale process.
- Put the solicitor, the accountant and the funder in the same week. Not in sequence. A payout figure expires and a sale campaign does not wait for advisers to take turns.
Will the receivership show on ASIC, and what has to change on company documents?
Yes. The appointment becomes part of the company's public ASIC record, and the company also has a document-label obligation of its own. Under section 427 of the Corporations Act 2001, the person who obtains the court order or makes the appointment must lodge notice with ASIC within seven days. ASIC's controller flowchart says the company's status changes from registered to external administration after the first appointment notice is processed. Separately, section 428 requires the company, on every public document and negotiable instrument, to state after the company name that a receiver, or receiver and manager, has been appointed. That is easy to miss because it is a company obligation, not merely something the receiver handles.
Worth doing straight away
- Keep the books current, because a company whose records are in order is in a different conversation entirely
- Write down the sequence of events and dates while they are fresh
- Tell staff and key suppliers something accurate and short, before they hear a version of it from somewhere else
- Check which bank accounts and receivables sit inside the security and which do not
- Keep every communication with the receiver in writing
Do not do these
- Move, sell or dispose of property the security covers
- Dispose of any company property for less than its market value or the best price reasonably obtainable, which is a separate duty with its own consequences
- Incur new debts the company has no reasonable prospect of paying
- Destroy, withhold or tidy up books and records
- Act on advice from anyone who contacts you out of the blue offering to move assets into a new entity
That last one is not a hypothetical. The regulator warns directly that some advisers make contact with directors of distressed businesses out of the blue, and that some of them suggest actions that could be illegal, including transferring company assets into another company without paying for them. The technical name for where that ends up is illegal phoenix activity, and it converts a company problem into a personal one. A legitimate refinance does the opposite: it pays the secured creditor what it is owed.
Can the company keep trading, pay wages and use its bank account?
It can keep trading in many cases, and which parts keep trading depends on whether the appointment was over the business or over particular assets. Where a receiver and manager has been appointed over the business, the appointee is the one carrying it on, including decisions about wages and suppliers for that part of the operation. Where a receiver was appointed over particular assets only, the rest of the business can often keep running and the constraint becomes cashflow rather than authority. The bank account question usually answers itself the same way: where the security covers the company's receivables and its account, the receiver controls what flows through it, and arrangements you had in place may stop working without anyone telling you first.
Three different questions get substituted for this one, and it is worth naming them so you can answer past them. The first is insolvent trading, which is a duty question about incurring debts the company cannot pay, and it does not disappear because a receiver has been appointed. The second is the customer's or supplier's version of the question, which is really about whether they will be paid, and that is answered by where they sit in the priority order rather than by whether the doors are open. The third is voluntary administration, which people reach for because it is the more familiar term, and which is a genuinely different decision covered further down this page.
Wages and employee entitlements are their own question and they run on a priority rule rather than on whether the business is open, which is set out under employees, lease and licences below. Where the company also has an arrangement with the Australian Taxation Office, that arrangement does not pause itself, and a default there creates its own consequences. If you are in that position, read what happens when an Australian Taxation Office payment plan defaults before you assume it can be picked back up later.
Can the secured debt be paid out or refinanced to end the receivership?
Yes. A receivership can end without the secured asset being sold if the secured debt and the amounts required to discharge the security can be paid out. In practice, a refinance requires a current payout figure, sufficient supported value in the secured property and a credible exit for the new facility. Timing matters because the receiver may already be progressing a sale. The insolvency material usually describes the ending as the receiver collecting and selling enough secured assets to repay the secured creditor, while finance material describes the funding; this section joins those two parts to the payout figure and the window in which it can still be used.
The concept that makes sense of it is redemption. A borrower whose property is subject to a security has a right to get that property back by satisfying what the security secures. Paying out or refinancing the secured amount is the exercise of that right rather than a favour the lender may or may not grant, and it is why a payout figure is something you are entitled to ask for. Whether it is achievable in your case is a commercial question about value, evidence and timing, not a question about whether the door exists. The legal characterisation of your particular security is a matter for your solicitor, and this page is general information only.
In practice the chain runs in a fixed order.
- Ask the receiver, through the secured creditor, for a payout figure and the date it is good to. Without a number with a date on it there is nothing for a funder to lend against.
- Establish what that figure includes, because it is rarely just the principal. The table below sets out the components and who fixes each one.
- Show a funder there is enough value in the security to support the new debt, evidenced by a valuation an independent valuer will stand behind rather than by what the company hoped the asset was worth.
- Show how the new facility gets repaid or refinanced in turn. A funder is not lending against your intention to save the company. It is lending against the asset and the exit.
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| What has to be covered | Who sets the amount | Where it comes from |
|---|---|---|
| The secured debt itself | The secured creditor | Principal, accrued interest and default interest under the facility documents |
| Enforcement and legal costs | The secured creditor, under its own documents | Recovery costs the facility allows the lender to add to the secured amount |
| The receiver's remuneration and costs | The receiver, on the basis its appointment and the legislation allow | Work done, and liabilities the receiver has incurred in the appointment |
| Priority payments out of circulating assets | Fixed by the Corporations Act 2001, not by agreement | Section 433, which requires certain employee-related debts to be paid ahead of the secured creditor's claim out of property subject to a circulating security interest Source: Corporations Act 2001 (Cth) s 433, Compilation No. 148, compilation date 27 August 2026, read at the Federal Register of Legislation. Applies where the company has not already commenced winding up. |
| Any prior ranking security | Whoever holds it | An earlier registered or otherwise prior security over the same property |
| Discharge and registration costs | The registry and the outgoing lender | Releasing the security once the secured amount is satisfied |
Who pays the receiver's fees, and what happens if there is money left?
The receiver's costs and fees are generally paid from the money realised from the secured assets before the secured creditor is paid from those proceeds. ASIC says the way a receiver's fees are calculated is usually set out in the security agreement and appointment document. For both non-circulating and circulating asset realisations, the receiver's relevant costs and fees are paid before the secured creditor from that pool. A liquidator, voluntary administrator, deed administrator or ASIC can ask the court to review a receiver's remuneration in the circumstances ASIC describes.
If the realisations leave money after the receiver's costs, any applicable priority claims and the secured creditor's debt have been paid, ASIC says the surplus is paid to the company or to its external administrator if one has been appointed. That is why equity above the payout figure matters twice: it may support a refinance before sale, and if a sale goes ahead it is the pool from which any residual value can ultimately come back to the company.
If the sale proceeds are not enough, the shortfall does not disappear. The unpaid balance remains a debt of the company. If the company later enters liquidation, ASIC's creditor guidance explains that a secured creditor can participate as an unsecured creditor for the shortfall after allowing for the expected value of its security. Any personal guarantee is a separate obligation and may expose the guarantor to that gap according to the guarantee's terms. That is why the useful refinance calculation is not simply asset value versus principal; it is supported value versus the current all-in payout figure.
The receiver also carries a duty that cuts in your favour if a sale does proceed. Under the Corporations Act 2001, a controller exercising a power of sale must take all reasonable care to sell the property for not less than its market value, or, where it has no market value, the best price reasonably obtainable having regard to the circumstances existing when it is sold. The regulator states that duty in its own guidance without attaching the section number to it; the section is 420A. That duty is not a promise of a good outcome, but it is the standard the sale has to meet, and it is a reason to put evidence of value in front of the receiver early rather than after a contract is signed.
When the window closes
The practical answer is that it closes when the receiver has an unconditional contract to sell the asset, not when the receivership formally ends. Everything before that point is a live conversation. After it, you are asking someone to unwind a sale they are contractually committed to and statutorily obliged to have run properly, which is a different and much worse conversation. This is why the payout figure gets requested in the first week rather than the fourth, and why the date on that figure matters more than it looks: a figure that expires while your funder is waiting on a valuation is a figure you have to ask for again, on worse terms, with the sale campaign further along. Whether any particular sale can be stopped is a legal question for your solicitor, not a general one.
It is worth being explicit that this is an absence rather than a published rule. We looked for an Australian position on when it becomes too late for a company to pay out and redeem, and on what a receiver's payout figure is made up of, across the corporate regulator, the Federal Register of Legislation, the financial complaints authority, the insolvency practitioners' association and Australian court material. We did not find one. What is published is what a receiver does with sale proceeds and the order those proceeds come out in. The point of no return is not published by anyone, and neither is an itemisation of the figure from the company's side. That is why the sequence above is written as practice rather than as law, and why the date on the payout figure is the thing to act on rather than the thing to check later.
If the appointment has not happened yet
The same route is materially easier before enforcement than after it, and if you have a default notice or a demand rather than an appointment, that is the position you are in. Nothing has been added to the secured amount for a receiver's remuneration, no notification has been lodged, and the asset is not in a sale process. The work is identical, which is to establish the payout figure and test whether there is enough value in the security to refinance it, and it simply costs less and takes less explaining. Directors tend to wait at this stage to see whether the lender will actually follow through. The cost of waiting is not the same for both sides.
One warning about what you will find if you search this yourself. The phrase people reach for, refinancing after a default notice, retrieves consumer material in Australia: refinance timelines written for owner-occupiers, and default notice guidance written for individuals rather than companies. None of it describes a secured business facility with an enforcement clock running on it. The closer parallel from the business side is what happens when a funder withdraws partway through a build, where the same question arrives without an appointment attached.
From our broking, indicative
We are asked about this after the appointment rather than before it, and the deals that go anywhere all share the same features. What follows is qualitative, because the honest answer on a page like this is that every one of these files is priced on its own facts.
- A funder will not look at the file at all without the receiver's payout figure in writing and a date it is good to, because until then there is no amount to lend against
- The files that move are the ones where there is equity in the security that an independent valuer will stand behind, and the ones that stall are the ones where the only evidence of value is what the company hoped the asset was worth
- An exit that depends on selling the same asset the receiver is already selling is the single most common reason a payout refinance does not proceed
- Where this commonly lands is that the solicitor, the accountant and the funder all need to be talking in the same week rather than in sequence, because the payout figure has a date on it
- A company that has kept its books current through the appointment is in a materially different conversation from one that has not, and that is usually the difference a director can still influence
- The files that arrive before enforcement are a different class of file altogether, because nothing has been added to the secured amount yet and there is no sale campaign to work around
Qualitative only, drawn from deals we have placed. This is not a quote, not an offer, and not a prediction about your company. Whether any funding is available, and on what terms, depends on lender policy, the security, the receiver's position and your circumstances at the time of application. Not financial advice.
Two adjacent situations are worth separating from this one. If the security at issue is a mortgage over real property and the mortgagee has taken possession rather than appointing a receiver over the whole business, the path is narrower and better trodden, and it is covered in refinancing out of a mortgagee in possession. And if what you are looking at is a short window to get an exit funded before a deadline, the mechanics of that window are set out in the receivership exit caveat.
Does receivership stop statutory demands, the ATO or a winding-up application?
No. A receiver's appointment does not create a general moratorium against the company's other creditors. ASIC states that legal action can be commenced or continued against a company despite a receiver being appointed, including an unsecured creditor applying to have the company wound up. The company can therefore be dealing with a receiver over secured property while an entirely separate creditor process continues against the company itself.
That distinction changes what the director should do. Do not treat the appointment date as the date every other clock stopped:
- Statutory demands and winding-up applications. Receivership does not itself neutralise them. If one has been served or filed, deal with its own statutory timetable and get insolvency legal advice immediately. See the separate guides to an Australian statutory demand and a winding-up application.
- ATO liabilities. The appointment does not erase the company's tax debt or any director-level process already running. An ATO payment-plan default and a director penalty notice have their own consequences.
- Suppliers claiming title or security. A PPSR registration, retention-of-title claim or other proprietary claim can affect whether particular goods are part of the pool the receiver can realise. Give the documents to the receiver and your solicitor rather than assuming every item on site belongs to the company.
- Landlords, employees, licences and contracts. These continue under their own legal and contractual rules. The receiver's appointment changes who may control the business, but it is not a universal stay on every counterparty right.
- Voluntary administration. Administration does introduce a different moratorium, but it does not necessarily stop the secured enforcement already under way. Section 441A can allow enforcement over the whole or substantially the whole of the company's property to continue where the statutory conditions are met, which is why the next section turns on the security and the dates.
The practical consequence is that a distressed company can have several processes running at once: a receiver realising secured assets, an administrator or liquidator dealing with the company more broadly, and personal guarantee or tax enforcement running against a director. They are connected factually, but they are not one legal process and they do not share one deadline.
Can voluntary administration stop a receiver in Australia?
Appointing a voluntary administrator does not automatically stop an existing receiver. Where a secured creditor has security over the whole, or substantially the whole, of the company's property and has enforced within the relevant statutory period, section 441A can allow that secured enforcement to continue while the administration runs alongside it. The condition matters: where the security covers only part of the property, section 441A does not apply on its terms and the position has to be worked out from the documents and timing.
The provision that decides it is section 441A of the Corporations Act 2001. It applies where the whole, or substantially the whole, of the property of a company under administration is subject to a security interest, and the secured party enforced that security before or during the decision period. Where it applies, nothing in section 198G, 440B, 440F, 440G or 451E, or in an order under subsection 444F(2) or 451G(1), prevents the secured party, or a receiver or controller appointed for the purposes of Part 5.2, from enforcing the security interest, and the Act adds, in the same subsection, that this holds even if appointed after the decision period. A further subsection switches off section 437D for those dealings.
The dual appointment, and the fork inside it
A receiver and a voluntary administrator operating over the same Australian company at the same time is what practitioners call a dual appointment, and it is a normal state of affairs rather than a contradiction. The fork that matters to you is whether your secured creditor's security covers the whole or substantially the whole of the company's property. If it does, and it was enforced in time, the administrator's appointment will not interrupt the enforcement, and the value of appointing one lies in what it does for the rest of the company's affairs rather than in stopping the receiver. If the security covers only part of the property, the section does not apply on its terms, and the answer for your company is a different one that no general summary will give you.
The clock is worth naming because it is short and it is defined. The decision period for a secured party, in relation to a security interest in property of a company under administration, runs from the day the administration begins, or the day notice of the administrator's appointment must be given to the secured party, and ends at the end of the thirteenth business day after that day. That is the window the condition in section 441A turns on, and it is the reason the sequence of events in your company's file is worth writing down carefully before anyone advises you on it.
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| The question | Where the security covers the whole, or substantially the whole, of the property | Where the security covers only part of the property |
|---|---|---|
| Does the administration moratorium stop the secured party enforcing? | No, where the security was enforced before or during the decision period | Section 441A does not apply on its terms, so the position has to be worked out on the facts and the documents |
| Can a receiver still be appointed after the decision period has passed? | Yes, the Act says so expressly for a receiver or controller appointed for the purposes of Part 5.2 | Not governed by that provision, so a different analysis applies |
| Who deals with property outside the security? | The administrator, as part of the administration of the company's affairs | The administrator, over a materially larger pool |
| Do the administrator's restrictions on dealings bite on the secured party? | No, section 437D is disapplied for those dealings | Depends on the analysis above rather than on a blanket rule |
| What is the realistic value of appointing an administrator? | Dealing with the unsecured position and a possible deed of company arrangement, not stopping the receiver | Potentially far more, because more of the company is inside the administration |
| What should you establish first? | What the security actually covers, and exactly when it was enforced | The same two things, in the same order |
Are you personally liable when a receiver is appointed to your company?
Usually not at the appointment itself, and what does reach you arrives later in a predictable order: a guarantee first, then a director penalty notice if there is unpaid tax, then anything driven by your own conduct as a director. The appointment is an event about the company's property. What lands on you personally is mostly triggered by a shortfall once that property is realised, or by an obligation you signed separately from the company.
The guarantee is the usual first arrival, and it bites when there is a gap between what the security realises and what the lender is owed. That is a substantial topic with its own mechanics, and it is answered properly in what happens when a personal guarantee is called, with the release question covered in getting out of a director's guarantee. Two sentences here, then read those.
Tax debt runs on a separate clock and does not wait for the receivership to finish. A director penalty notice has its own short statutory timetable and its own limited set of responses, and the options narrow sharply depending on whether the company's lodgements were up to date. That is set out in the director penalty notice guide. Beyond those two, your exposure turns on your conduct as a director rather than on the appointment, which is exactly why the books, the lodgements and the advice you take now matter more than they feel like they do.
One further power is worth knowing about because it is rarely mentioned on the receivership side. A receiver can apply to the court for a public examination of a director, under oath, where the regulator consents. Being summoned to one is serious and is not something to deal with alone. The regulator's own observation is that the need for it can often be avoided by cooperating with the appointee, which is another reason the first fortnight matters.
There is a reason this is hard to research. Almost every published Australian answer to what happens to a director afterwards is written about liquidation or personal bankruptcy rather than receivership. The guides are about directors of companies in liquidation, the disqualification material is built around companies that failed, and the personal insolvency material sits alongside both. Receivership gets folded into that answer even though it is a different event with a different ending, which is why the distinction in the next paragraph is worth reading carefully rather than assuming the worst case applies to you.
Can a director see the receiver's reports to the secured lender?
Do not assume that being a director gives you an automatic copy of every private report the receiver sends to the secured creditor. ASIC's guidance says unsecured creditors are not entitled to see reports a receiver sends to the secured creditor and that a receiver has no general obligation to report to unsecured creditors about the receivership. Controllers do lodge statutory information, including an annual administration return showing receipts and payments that can be obtained through ASIC for a fee. Whether the company or a director has a right to a particular private report depends on the document and the legal basis for access, so ask the receiver for what you need and have your solicitor deal with any disputed access rather than assuming the report is public.
After it is over: can you be a director again, and can you borrow again?
A receivership by itself is not a statutory disqualification event. ASIC expressly distinguishes companies that have only gone into receivership from the liquidation-based grounds it describes for banning directors. A future lender can still ask about the history as part of a credit assessment, especially if you control the same business or are seeking business finance. In practice, the questions that then matter are why the appointment occurred, how it ended, whether the secured creditor was paid, whether any guarantee or tax liability remains, and what the current financials show. That is different from saying the receivership automatically makes you personally liable or prevents you from borrowing again.
What happens to employees, leases and licences during receivership?
Employee entitlements get a statutory priority out of a particular pool of assets rather than a guarantee of payment, the lease stays on foot because a receiver cannot disclaim it, and licences are governed by whatever the issuing body's own rules say about insolvency events. Each of these sits with a different party and follows a different rule, and almost everything published about them is written for the other side of the relationship. The regulator's receivership material on employees is addressed to employees. The substantive material on what happens to a commercial lease is written for landlords. Here is the same ground from the company's side.
- Employees and accrued entitlements. If the receiver continues to trade the business, ASIC says ongoing employees must be paid for services provided after the appointment from available company assets and those payments are treated as an expense of the receivership. The appointment does not automatically terminate employment. For pre-appointment entitlements, where property is subject to a circulating security interest, the Corporations Act 2001 gives certain employee debts priority ahead of the secured creditor's claim out of that property. It is a priority out of a particular pool, not a guarantee of payment. The Fair Entitlements Guarantee is not triggered by receivership alone; ASIC says employees become eligible only if and when the company enters liquidation and the other scheme requirements are met.
- The premises lease. A receiver cannot end a lease the way a liquidator sometimes can. A specialist commercial property practice puts it plainly: in a receivership, the receiver cannot disclaim the lease at all. The practical consequence for the company is that the lease obligations do not evaporate because a receiver was appointed, and the landlord's position is often stronger in a receivership than it would be in a liquidation.
- Operating licences and permits. These generally sit with the entity and are governed by whatever the issuing body's rules say about insolvency events and changes of control. They are not automatically transferred, suspended or preserved by the appointment, and each one needs to be checked on its own terms.
- Supply and customer contracts. Most commercial contracts contain provisions dealing with insolvency events, and an appointment can trigger them. Whether a counterparty can act on such a provision is a legal question, and it is one to put to your solicitor with the contract in front of them.
- Bank accounts and receivables. Where these are inside the security, the receiver controls them. Where they are not, they stay with the company, which is another reason to establish the perimeter of the security early.
- Unsecured creditors. They rank behind the secured creditor for the secured property, and their recourse against the company is separate from the receivership. A creditor pursuing payment may escalate on its own track, which is why a statutory demand needs answering inside its own deadline regardless of what the receiver is doing.
Registered liquidators, employment lawyers and commercial property solicitors each own a piece of this, and the sensible move is to get the three of them looking at the same facts rather than answering these questions from a general page.
What happens to the company when receivership ends?
A receivership usually ends when the receiver has collected and sold all or enough secured assets to repay the secured creditor, completed the receivership duties, and paid the receivership liabilities. The regulator then describes what most published material leaves out: generally the receiver resigns or is discharged by the secured creditor, and unless another external administrator has been appointed, full control of the company and any remaining assets goes back to the directors. The same is true where the secured debt was paid out rather than realised by sale.
That is the fact worth carrying out of this page. Receivership does not necessarily end the company. It ends an appointment over particular property, and where something is left and no other appointment has been made, the company and the board pick it up again. The formal record of the appointment and its cessation runs through a lodged notification, which is how the regulator knows a controller has been appointed or has entered into possession in the first place. Where the company has gone into winding up instead, that is a different destination, and it is covered under a winding up application.
One honest note on the numbers, because it is a question people ask and the answer is not published. The regulator collects appointment data at source through the statutory notification form and publishes a corporate insolvency statistics series built from forms and reports lodged against its registers. The Parliamentary Joint Committee on Corporations and Financial Services, reporting on corporate insolvency in Australia, said in its committee view that the lack of quality data available for analysis to support insolvency policy and legislative decisions has been a long standing issue, and that evidence to its inquiry suggested significant challenges remain. So there is published aggregate data, and there is a parliamentary finding that it is not good enough to answer the questions directors most want answered. That is why this page prints no survival rate, no average duration and no likelihood figure.
A receiver appointed by your secured creditor takes the assets that security covers, and nothing more. You remain a director, with every duty that carries, with obligations to the receiver that start running immediately, and with decisions that are still genuinely yours: whether to challenge a defective appointment, whether to pursue a payout or refinance, whether and when to appoint a voluntary administrator, and how to deal with other creditors whose enforcement does not stop merely because a receiver has arrived. The two facts that decide almost everything are what the security actually covers and exactly when it was enforced. Establish those first, then put every ROCAP, creditor, sale and funding deadline on one timeline with your solicitor and accountant.
Key takeaway: the appointment reaches the secured assets, not the whole company, and paying out the secured debt is a real route out, with the unpublished part being what the payout figure contains and when the window to use it closes.If you have a payout figure, or you have been told one is coming, that is the conversation to have this week rather than next month. If the appointment has not been made yet, it is an easier one again.
Frequently asked questions
A receiver is appointed by a secured creditor over the property that creditor's security covers, and works in that creditor's interest. A voluntary administrator is appointed over the company as a whole, usually by the board, to investigate and put a restructuring proposal to creditors. They are different appointments under different parts of the Corporations Act 2001, and they can run at the same time over the same company rather than one replacing the other.
A receiver's powers come from the security document the appointment was made under and from the Corporations Act 2001, and they extend to taking control of, dealing with and selling the property that security covers. The receiver's primary duty is owed to the appointing secured creditor, which is why the appointment is not neutral between the parties. One duty runs the other way: in exercising a power of sale, a controller must take all reasonable care to sell for not less than market value, or, where there is no market value, the best price reasonably obtainable in the circumstances existing at the time of sale.
A receiver is an external insolvency professional, and in Australia the appointment is made by the secured creditor under its security document or by a court. The regulator states that this option is not normally available to a director, because a receiver, or receiver and manager, can only be appointed by a secured creditor or court. The narrow exception it names is a director who is themselves a secured creditor, who can appoint one and is told to seek advice before doing so.
It means the appointee has been given the power to carry on the business attached to the secured assets, not only to take and sell those assets. In practice that is the difference between someone realising particular property and someone running your operation while they do it. The scope still comes from the security document, so a receiver and manager appointed over one part of the company's property does not thereby run the rest of it.
No. Receivership is not a general moratorium against the company's other creditors. ASIC says legal action can be commenced or continued despite a receiver being appointed, including an unsecured creditor applying to wind the company up. A statutory demand or winding-up application therefore needs to be dealt with on its own timetable rather than parked until the receiver leaves.
Where there is doubt on a specific ground about whether a purported receiver or controller was validly appointed, section 418A of the Corporations Act 2001 allows the purported controller, the company or a creditor of the company to apply to the Court for a declaration about validity. A complaint about misconduct after a valid appointment is different: section 434A provides a separate route, giving the Court power to remove a controller for misconduct.
The regulator sets out what a director has to provide: where the company's property is and any of it you are holding, access to the books and records, where other company records are kept, a report on company activities and property, and meetings or reports to help the receiver's inquiries as reasonably required. In a receivership that report is due within 10 business days of the appointment. Directors and officers must not obstruct a receiver, and cooperating is usually what keeps the more serious steps off the table later.
It is the report on company activities and property, lodged on ASIC Form 507, and the regulator's guidance for directors puts it at 10 business days in a receivership. The Report as to Affairs description with a 14 day deadline is the older wording and it still appears on Australian pages that rank well, which is where most of the confusion comes from. Note also that ASIC states Form 507 consists of Part A only, and that Part B does not form part of the form and should not be lodged with it.
Sometimes, and it is materially easier before the appointment than after it. Until the secured creditor enforces, the debt can be paid out or refinanced without a receiver's costs sitting on top of it and without an appointment on the public record. Once a default notice or a demand has been issued the window is short, so the useful step is to get the payout figure and test whether there is enough value in the security to refinance, rather than waiting to see whether the lender follows through. If the appointment has already happened, the same route still exists, it just costs more.
It is possible where the secured amount can be paid out in full and the security discharged, and it is the route the insolvency material describes as a sale and the finance material describes as funding, with nothing joining the two. What it requires is a payout figure from the receiver with a date it is good to, evidence of value in the security that an independent valuer will support, and a credible way the new facility is repaid. The practical constraint is timing, because once the receiver has an unconditional contract to sell the asset the opportunity is usually gone.
It can, and whether it does depends on who holds the power to trade. Where a receiver and manager has been appointed over the business, the appointee carries it on. Where a receiver was appointed over particular assets only, the parts of the operation outside the security can often continue. Your duties as a director do not pause while this happens, including the duty not to let the company incur debts it cannot pay.
Not as a general rule, because the company is a separate legal entity and its debts are its own. The exceptions are what matter in a receivership: a personal guarantee you signed, a director penalty notice for certain unpaid tax obligations, and liability arising from your own conduct as a director, such as incurring debts while the company is insolvent. If a guarantee has been called on you, read what happens when a personal guarantee is called.
There is no reliable published Australian figure, and the parliamentary committee that examined corporate insolvency found the available data is not good enough to answer questions like this one. What drives the length in practice is what the secured assets are, whether a receiver and manager is running a business while they sell it, and whether the appointment ends in a sale or in the secured debt being paid out. A payout that is funded quickly can end an appointment considerably sooner than a sale campaign.
Receivership by itself is not a disqualification. The regulator's disqualification power is built around liquidations and around companies that have failed, not around a secured creditor enforcing its security, so a receivership that ends with the secured debt repaid does not put you in that position. What does follow you is anything personal that crystallised along the way, such as a guarantee that was called or a director penalty, because those are debts in your own name rather than the company's.
The receiver's relevant costs and fees are generally paid from the money realised from the secured assets before the secured creditor is paid from those proceeds. ASIC says the method for calculating the receiver's remuneration is usually set out in the security agreement and appointment document. If there is money left after receiver costs, any applicable priority claims and the secured creditor have been paid, the surplus is paid to the company or its external administrator.
Yes. Section 428 of the Corporations Act 2001 requires a company that has a receiver, or receiver and manager, appointed over its property to state that fact after the company's name where it first appears on every public document and negotiable instrument. The appointment is also notified to ASIC, so the receivership becomes part of the company's public record.
Not by itself. Receivership is a secured-creditor enforcement process over some or all of the company's assets, while section 95A of the Corporations Act 2001 defines insolvency by whether the company can pay its debts as and when they become due and payable. The two often occur together because receivership commonly follows serious financial distress, but the appointment does not replace the statutory solvency test.
A receiver holds statutory duties and can be held to them, including the duty of care in exercising a power of sale under the Corporations Act 2001. Whether a particular complaint gives rise to a claim, who can bring it and what it is worth are legal questions that turn entirely on the facts and on the terms of the appointment. This is one to put to a solicitor with the security document and the sale material in front of them, not one to resolve from a general page.
Unless another external administrator has been appointed, full control of the company and any remaining assets goes back to the directors. A receivership ends an appointment over particular property rather than the company itself, so the company continues to exist and can continue to operate if there is something left to operate with. Where a liquidator or administrator has been appointed in the meantime, that appointment governs what happens next instead.
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