Deed of Company Arrangement (DOCA)

DEED OF COMPANY ARRANGEMENT (DOCA).

A Fresh Start for Your Company.

A Deed of Company Arrangement (DOCA) offers a way out of administration and a second chance for your business. With the right terms, it can get you back on track.

DEED OF COMPANY ARRANGEMENT (DOCA).

A Deed of Company Arrangement (DOCA) offers a way out of administration and a second chance for your business. With the right terms, it can get you back on track.

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DOCA EXPLAINED

What is DOCA?

A DOCA is a binding arrangement between a company, its directors and creditors setting out how the company’s affairs will be dealt with. It aims to maximise the chances of the company surviving or provide a better return for creditors than liquidation.

A DOCA is proposed by the company directors and then voted on by creditors. If approved, an independent deed administrator takes over the company to oversee the DOCA process and ensure terms are met. The directors remain in control of daily operations, but important decisions also need the administrator’s approval.

HOW WE HELP

Before being appointed, we always provide a clear picture of what options your business may have.

Solving the right problems at the right time can be the difference between a business surviving or failing.

DEED OF COMPANY ARRANGEMENT

How Can a DOCA Help me?

A DOCA spells out a plan to get remaining creditors paid, which may involve:

Allowing more time to sell assets, find investors or raise capital in order to fund repayments;
Compromise agreements with creditors to accept a lesser amount in settlement of debts; and
Gaining breathing space from creditor legal action while the DOCA is implemented.

If successful, control returns to the directors once the DOCA is fully effectuated. This allows you to move forward with a clean slate – debts dealt with, creditor pressure resolved, and your business back on track.

A DOCA offers a chance to turn things around without the stigma and consequences of liquidation. However, it requires creditor approval, experienced administration, and a viable plan. Talk to our DOCA Australia experts at AVA Advisory today about the DOCA process and for help with preparing a DOCA tailored to your situation.

DOCA AUSTRALIA

Why should small and medium business owners consider a Deed of Company Arrangement (DOCA)?

To avoid liquidation and continue trading – A DOCA allows a financially distressed company to avoid being wound up and retain control while settling debts. This enables the business to continue operating.
To have time to restructure or reorganise – The DOCA provides breathing space to sell assets, raise funds, find investors or renegotiate supplier/creditor terms to rehabilitate the business.
To protect director reputation – Compared to liquidation, a DOCA can be a more positive solution that shows directors actively working to turn things around. This causes less damage to a director’s reputation.
To reach a compromise with creditors – Through a DOCA, creditors may agree to accept a lesser amount than what they are owed in order to avoid the risks and uncertainty of liquidation.
To realise assets in an orderly fashion – A DOCA can allow assets to be sold over time to maximise value, rather than a ‘fire sale’ in liquidation.
To allow a sale or re-capitalisation – Time can be provided to find buyers for the business as a whole, or to find new investment to re-capitalise and relaunch the business.
To preserve employee entitlements – A DOCA improves the chances of retaining staff and paying outstanding employee entitlements.
To facilitate a business sale – A DOCA allows time to negotiate a sale of business assets and/or undertakings.

DEED OF COMPANY ARRANGEMENT VS LIQUIDATION

What are the main advantages of a Deed of Company Arrangement (DOCA) compared to Liquidation or voluntary administration?

It’s important to consider if a DOCA is right for you and your business, speak with the DOCA advice expert at AVA Advisory on 1300 181 220 or book an obligation-free, cost-free consultation online today to understand more about the advantages of a DOCA.

Avoiding liquidation – A DOCA enables the company to avoid being placed into liquidation, which carries a stigma for many and results in the dissolution of the company.
Protecting reputation – Directors are seen to be actively working to fix the company’s problems through a DOCA.
Continued trading – The company can usually continue trading under a DOCA, whereas trading generally ceases during liquidation and voluntary administration.
Director control – Directors retain control of the company under a DOCA, subject to the deed administrator’s oversight. In liquidation and voluntary administration, control passes to the external administrator.
Flexibility – A DOCA allows for flexibility in structuring repayment plans, asset sales, creditor compromises, and other terms agreed upon between the company, creditors, and directors.
Improved business sale prospects – A DOCA can allow time for a business sale to be achieved on more favourable terms than in liquidation.
Creditor compromise – Creditors may agree to settle for lesser amounts than fully owed under a DOCA compared to liquidation.
Preserving goodwill – A DOCA better preserves customer and supplier goodwill compared to the stigma of liquidation or voluntary administration.
Lower costs – DOCAs can result in lower professional fees than drawn-out voluntary administrations or liquidations.

Overall, a DOCA can facilitate company revival rather than merely winding up affairs, offering directors more control over the turnaround process.

Worried that your business might be going under? AVA Advisory is here to help as your trusted adviser.

AVA Advisory is offering free, no-obligation Business Health Checks to identify issues placing your company at risk. Our experienced DOCA experts and restructuring advisors with many decades of combined experience will review your finances, clearly explain where problems lie, and outline constructive solutions to get you back on track. Book a free Business Health Check today.

You don’t have to go it alone – a fresh set of expert eyes could make all the difference and help lift the stress and burden of financial hardship off your shoulders. The DOCA experts at AVA
Advisory will be by your side every step of the way and can help you identify problems and solutions early on in the DOCA process (while more turnaround options are available). Regain control, protect your interests, and give your business the best chance to survive.

Schedule your free Business Health Check today. This obligation-free review could be the lifeline your company needs to survive. Gain clarity from DOCA experts who have seen it all. We know what needs to be done so you can continue on and focus on the things in life that matter the most.

Call us today on 1300 181 220 to arrange your free business health check or book an obligation-free, cost-free consultation online. The first step to a solution is seeking advice, don’t delay – get the help you need from the experts you can trust at AVA Advisory.

Get in touch.

Now, Let’s Start Mapping Your Path to Financial Freedom.

Don’t wait – the earlier we start, the more debt relief options will be available. Contact us today on 1300 181 220 for an obligation-free, cost-free consultation. Share details of your situation and concerns in confidence.

With expertise on your side helping analyse business debt relief options, ATO debt advice, and negotiate agreements, you can look forward again. Clarity, relief, and a brighter future for you and your business are only a few steps away – fill out the form below for your free consultation.