Practical Law ANZ Glossary w-004-1880 (Approx. 5 pages)
External administration is a generic term that is used to describe one of several key types of process involving the appointment of an insolvency practitioner to a company or in respect of its property. Those processes are:
Administration of a DOCA, which is a possible outcome of voluntary administration. A DOCA will commonly provide for a sale of company assets or a restructure of the company, the payment of all or part of the company's admitted debts (from which the company will be released), and the ability of the company to continue after satisfaction of the terms of the DOCA. DOCAs are governed by sections 435A to 451D in Chapter 5, Part 5.3A of the CA 2001 and regulations 5.3A.01 to 5.3A.07A in Part 5.3A of the Corporations Regulations.
Liquidation, which involves the appointment of a liquidator to a company (usually voluntarily by the company itself, by court order on application by a creditor or by creditors at the conclusion of a voluntary administration) to wind down the company's business, investigate the circumstances which preceded the liquidation, recover and realise the company's assets (if any), distribute the assets (proceeds of sale) among creditors and deregister the company. Liquidation is governed by Chapter 5, Parts 5.5, 5.6, 5.7B and 5.8-5.9 of the CA 2001 and Chapter 5, Part 5.6 of the Corporations Regulations. A simplified liquidation process is available for small businesses in certain circumstances within a creditors' voluntary liquidation under Part 5.5, Division 3, Subdivision B, CA 2001.
Provisional liquidation, where the court appoints a liquidator to a company on a provisional basis after the filing of a winding up application but before it is heard, in order to safeguard the assets of the company and maintain the status quo pending the hearing of the application (section 472(2), CA 2001).
The IPS itself defines external administration as constituting one of the above types of process (section 5-15, IPS), with a corresponding definition of external administrator (section 5-20, IPS). The IPS and IPR do not apply to receivership.