Deed of Company Arrangement (DOCA)
When your business is under financial pressure, obtaining the right advice at the right time can make the difference between Recovery and closure.
At HM Advisory, our focus is helping directors and business owners navigate complex Insolvency scenarios with outcome-driven strategies, including the use of a Deed of Company Arrangement (DOCA). This legally binding agreement between a company and its creditors allows businesses to Restructure debts and continue trading.
In the right circumstances, it’s an opportunity to avoid Liquidation and return to profitability.
What Is a Deed of Company Arrangement
A Deed of Company Arrangement (DOCA) is a tool that allows a company to compromise its debts and reach an agreement with creditors. Instead of being placed into Liquidation, the company proposes a plan. This often involves partial repayment of debts over time, asset realisation, or operational Restructuring.
Creditors vote on whether to accept the DOCA at the second creditors’ meeting during Voluntary Administration. If approved, the DOCA process binds all unsecured creditors and allows the business to move forward under agreed terms.
What a DOCA Can Achieve for Your Business
Flexible options tailored to your circumstances
No two businesses have the same challenges. A DOCA can be customised around your cash flow, trading conditions and Creditor expectations.
We design proposals that work in the real world utilising strategies that are practical, achievable and structured to give your company the best possible chance of ongoing success.
Protection when you need it most
Entering voluntary administration (before a DOCA) immediately stops most Creditor actions, including statutory demands, wind-up proceedings and pressure from the ATO. For directors facing mounting stress and pressure from Creditors, this protection offers desperately needed stability.
Recover, restructure and rebuild
A DOCA allows your company to keep trading while debt obligations are managed in an orderly, pre-agreed manner. This creates the opportunity to restore operations, maintain key contracts, protect jobs and preserve business value that would otherwise be lost in Liquidation.
When is a DOCA the right solution?
Directors come to us when they’re dealing with situations such as:
- ATO debt, payment plans in default, or escalating interest;
- Major Creditors threatening legal action;
- Cash-flow shortages making it difficult to meet weekly obligations;
- Pressure from Lenders or Landlords;
- Risk of personal exposure through guarantees or potential Insolvent Trading; and
- A viable core business model that needs restructuring, not shutting down.
In these cases, a DOCA can provide a clear pathway to avoid Liquidation and stabilise the company.
Why Work with HM Advisory for DOCA Services?
While many firms focus on Liquidations, we undertake a high proportion of Voluntary Administration and Restructuring engagements. Our priority is saving businesses wherever possible.
Our leadership team is hands-on, commercially minded, and willing to explore every viable option to return a company to profitability. As experienced Registered Liquidators, we have the technical capability to manage complex appointments with the personal attention of a boutique firm.
For directors, this means clear DOCA advice, practical solutions, and a team that’s invested in achieving the best possible outcome.
If you’re considering your options, you can also explore our Voluntary Administration services for an overview of your available pathways.
The DOCA Process: What to Expect
Step 1: Assessment and Strategy
We review your financial position, viability, and Restructuring options. This includes determining whether a DOCA is appropriate and achievable.
Step 2: Appointment of Voluntary Administrator
If suitable, a Voluntary Administrator is appointed. Control of the company temporarily shifts to the Administrator, and a moratorium protects it from creditor enforcement.
Step 3: Investigations and DOCA Proposal
We investigate your company’s affairs and work with you to develop a DOCA proposal that offers a better return to creditors than Liquidation.
Step 4: Creditors’ Meetings and Vote
Creditors review the proposal and vote on the company’s future: whether to accept the DOCA, return control to directors, or proceed to Liquidation.
Step 5: DOCA Implementation
If approved, the DOCA is executed and administered in accordance with its terms, allowing your business to continue operating while meeting its obligations.
DOCA vs Other Insolvency Options
- DOCA vs Voluntary Administration: Voluntary Administration is the process; a DOCA is one possible outcome of that process.
- DOCA vs Creditors Voluntary Liquidation: A DOCA aims to Restructure and save the business, whereas Liquidation involves Winding Up the company and realising assets for creditors.
- DOCA vs Informal Arrangements: A DOCA provides legal certainty and binds creditors, offering stronger protection than informal negotiations.
How HM Advisory Helps
Reassurance, clarity, and a single point of control
You stay informed and empowered at each stage while we handle the complexity, including Creditor management, proposal drafting, compliance and strategic planning.Reduce stress with structured Creditor engagement
Managing Creditors whilst experiencing financial distress can be overwhelming. We step in to communicate with Creditors, negotiate terms, and build support for your DOCA proposal. This protects relationships and ensures your company has the best chance of Creditor approval.Strategic restructuring with Director support
While the Voluntary Administrator temporarily controls the business, our approach ensures Directors remain actively involved in strategy. Once the DOCA is approved and executed, control is returned to the directors, allowing you to steer the company forward with a sustainable structure.Cost-effective and outcome-driven
We focus on solutions that preserve value and reduce the financial impact of insolvency. A well-crafted DOCA can deliver stronger returns to Creditors, protect core operations, retain Employees and maintain continuity with customers and suppliers.Take Action Early
If your company is under pressure, early engagement dramatically increases the chance of a successful deed of company arrangement.
HM Advisory’s experienced administrators and restructuring specialists are ready to assess your situation confidentially and guide you toward the most effective path forward.
FAQs
What is a Deed of Company Arrangement?
A Deed of Company Arrangement is a formal agreement between a company and its creditors that allows debts to be Restructured while the business continues trading.
How long does a DOCA last?
The duration depends on the terms of the agreement. Some DOCAs run for a few months, while others may extend over several years.
What happens if a DOCA fails?
If the terms of the DOCA aren’t met, the company will transition into Creditors Voluntary Liquidation.
Does a DOCA stop personal guarantees?
Generally, no. A Deed of Company Arrangement deals with the company’s debts but not the personal obligations of Company Director(s).
If you’ve provided a personal guarantee, the Creditor can usually still pursue you personally for the balance of their debt, even if this is compromised under the DOCA. However, in some cases, Creditors may choose not to enforce a guarantee if the DOCA provides them with a better return or if negotiations are made as part of the proposal.
If you’re unsure whether your guarantees will be affected, it’s important to get personalised advice from your advisors and our expert team before the DOCA is finalised.
Is a DOCA better than Liquidation?
Where the business is viable, a DOCA can provide a better return to creditors and allow the company to continue operating. However, it depends on the specific circumstances.
Can my business keep trading under a DOCA?
Yes. One of the key advantages of DOCA services is that it allows the company to continue trading while addressing its debts.
Are directors still in control after a DOCA is put in place?
Yes — once the DOCA is approved and executed, control typically returns to the directors, unless the DOCA specifies otherwise.
During Voluntary Administration, the Administrator takes full control of the company. But when the DOCA begins, the directors resume day-to-day management while following any conditions set out in the deed.
The Administrator (now called the Deed Administrator) monitors compliance pursuant to the deed, often collecting regular DOCA contributions for the purpose of interim and final dividends to Creditors.
Can the court terminate a Deed of Company Arrangement?
Yes. A court can terminate a DOCA in certain circumstances, including when:
- The DOCA is unfair or prejudicial to Creditors
- The company or Directors fail to comply with the deed
- It becomes clear that the DOCA will not achieve its intended purpose
- Liquidation would provide a better outcome for Creditors
Applications to terminate a DOCA are usually made by Creditors, the Administrator or ASIC. If the DOCA is terminated, the company typically enters Liquidation.
We are here to help
If a business you’re involved with may require our services, please feel free to contact us for an initial consultation – this is free of charge and without obligation.
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