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A well-structured DOCA can save your company from liquidation. Boss Lawyers helps directors and creditors navigate the DOCA process with clarity and precision.
A Deed of Company Arrangement (DOCA) is one of the most powerful tools available under Australian insolvency law. When properly structured and executed, a DOCA can allow an insolvent company to continue trading, preserve jobs, and deliver a better return to creditors than liquidation.
At Boss Lawyers, we regularly advise directors, creditors, and administrators on DOCA proposals and negotiations. We understand that a successful DOCA requires careful planning, realistic financial projections, and skilled negotiation with creditors.
If your company is in voluntary administration and you are considering a DOCA, or you are a creditor being asked to vote on a DOCA proposal, we can provide the guidance you need to make informed decisions.
A Deed of Company Arrangement (DOCA) is a binding agreement between a company and its creditors, executed following a period of voluntary administration. The DOCA framework is set out in Part 5.3A of the Corporations Act 2001 (Cth).
A DOCA is proposed during voluntary administration and must be approved by a majority of creditors (by value and number) at the second meeting of creditors. Once executed, it binds all unsecured creditors, whether or not they voted in favour of the deed.
The fundamental purpose of a DOCA is to provide creditors with a better outcome than they would receive in a liquidation, while allowing the company (or its business) to continue operating.
A DOCA is appropriate when:
A DOCA is not appropriate where the company has no viable business, the proposal offers no better return than liquidation, or the proposal is designed to defeat the legitimate interests of creditors.
The DOCA process operates within the framework of voluntary administration:
During the administration period, any person (including the directors) may propose a DOCA to the administrator. The proposal should set out the terms of the deed, including the amount to be paid to creditors, the source of funds, the timeline for payments, and any conditions.
The administrator must prepare a report to creditors under section 439A that includes a comparison of the estimated return to creditors under the DOCA versus liquidation. The administrator must also provide an opinion on whether the DOCA is in the creditors’ best interests.
At the second meeting of creditors, creditors vote on whether to execute the DOCA, return the company to its directors, or wind up the company. The DOCA must be approved by a majority in number and value of creditors voting at the meeting.
If approved, the DOCA must be executed within 15 business days of the creditors’ meeting (or such longer period as the Court allows) under section 444B. The deed administrator (usually the former voluntary administrator) oversees compliance with the deed’s terms.
The Corporations Act prescribes certain mandatory provisions that must be included in every DOCA (section 444A). These include:
Beyond these mandatory provisions, a DOCA can be tailored to suit the particular circumstances of the company. Common features include a lump sum contribution from directors or third parties, payment by instalments over time, a transfer of the company’s business to a new entity, and the release of directors from insolvent trading claims.
A well-structured DOCA offers significant advantages over liquidation:
Once a DOCA is executed, it creates binding obligations on the company, the deed administrator, and creditors:
Failure to comply with the deed’s terms can result in termination of the DOCA, which may lead to the company being placed into liquidation.
A DOCA can be varied with the approval of creditors at a meeting called for that purpose. Variation may be appropriate where the company’s circumstances change, additional time is needed to meet payment obligations, or new funds become available.
A DOCA terminates when:
If a DOCA is terminated because of non-compliance, the company will typically be placed into liquidation.
Whether you are a director proposing a DOCA or a creditor asked to vote on one, here are the key considerations:
For more information about our insolvency services, contact Boss Lawyers on 1300 267 711.
A DOCA is often the best opportunity to save a company from liquidation. But a poorly structured or unrealistic DOCA proposal will fail — wasting time and the company’s remaining resources.
At Boss Lawyers, we bring practical experience to DOCA proposals and negotiations. We help directors prepare proposals that creditors will take seriously, and we help creditors assess whether a DOCA delivers genuine value compared to liquidation.
We understand that every DOCA is different. The right structure depends on the company’s business, its assets, its creditor profile, and the funds available. We work with you to develop a DOCA strategy that is realistic, commercially sound, and designed to achieve approval.
DOCAs require a combination of legal knowledge, commercial awareness, and negotiation skill. At Boss Lawyers, we have acted on DOCAs across a wide range of industries and company sizes.
We focus on practical outcomes — a DOCA that gets approved, gets completed, and delivers real value to creditors. Our direct, no-nonsense approach means you get clear advice about what will work and what will not.
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For experienced DOCA advice in Brisbane
A DOCA is a formal, legally binding deed executed under Part 5.3A of the Corporations Act that binds all unsecured creditors. A payment plan is an informal arrangement between a company and individual creditors. A DOCA provides greater certainty and protection for both the company and creditors, including a moratorium on enforcement action.
Yes. A DOCA can include a release of claims against directors, including insolvent trading claims, if creditors approve. However, this is often a point of negotiation — creditors may resist releasing directors unless the DOCA provides a significantly better return than liquidation would, including the value of those claims.
If the company fails to comply with the terms of the DOCA, the deed administrator or a creditor can apply to the Court for orders, including termination of the deed. If the DOCA is terminated, the company will typically be placed into liquidation.
Generally, no. Secured creditors are not bound by a DOCA unless they consent to be bound. However, the DOCA can include provisions that deal with the interests of secured creditors with their agreement.
The duration depends on the terms of the deed. Some DOCAs involve a lump sum payment and are completed within weeks. Others involve instalment payments over months or years. The key is that the terms must be realistic and achievable.
If you need experienced legal guidance regarding Deeds of Company Arrangement, contact Boss Lawyers today. Call us on 1300 267 711 or complete the enquiry form above.
Boss Lawyers Pty Ltd — Level 27, Santos Place, 32 Turbot Street, Brisbane QLD 4000.
This is general information only and is not legal advice. You should obtain professional advice specific to your circumstances.
