A Deed of Company Arrangement (DOCA) is a formal, legally binding agreement. It sets out how a financially distressed company will deal with its debts and affairs after entering voluntary administration.
A deed of company arrangement (DOCA) can help a company in financial distress by allowing it to restructure its debts and operations while avoiding immediate liquidation.
Through a DOCA, the company and its creditors agree on a plan for repaying debts—often at a reduced amount or over time—so the business can continue trading, preserve value, and potentially recover.
This process can deliver a better outcome for creditors than winding up the company and gives the business an opportunity to stabilise and return to viability.
A DOCA is a restructuring deal between a company and its creditors that aims to:
A deed of company arrangement (DOCA) is suitable when a company is insolvent or likely to become insolvent but has a viable underlying business or assets that can generate better returns if the company continues operating rather than being liquidated.
It is most appropriate where creditors are likely to receive a better outcome through a structured compromise or repayment plan, management is willing to cooperate with the administrator, and there is a realistic prospect of stabilising the company’s financial position within a reasonable timeframe.
A voluntary administrator can be appointed by:
This usually happens when directors believe the company is insolvent or likely to become insolvent.
An independent registered liquidator is appointed to take control of the company and assess its financial position.
Creditors meet shortly after the appointment to confirm or replace the administrator and form a committee of inspection if required.
The administrator investigates the company’s affairs and prepares a report comparing the likely outcomes of a DOCA, liquidation, or returning the company to directors’ control.
Creditors vote on the company’s future and choose between entering a DOCA, winding up the company, or ending the administration.
If creditors approve a DOCA, the deed is executed within the required timeframe, and the administrator becomes the deed administrator.
The company operates in accordance with the deed’s terms, including making payments to creditors and restructuring the business as agreed.
Once the DOCA terms are fulfilled, the deed ends and the company exits administration. If the DOCA fails, the company may be placed into liquidation.
| DOCA | Liquidation |
|---|---|
| Company may continue trading | Company usually stops |
| Creditors may receive partial payment | Often lower returns |
| Business assets preserved | Assets sold off |
| Focus on recovery | Focus on closure |
A DOCA will usually specify:
Comparison of the pros and cons of a Deed of Company Arrangement (DOCA) for both creditors and directors.
| Stakeholder | Pros | Cons |
|---|---|---|
| Creditors |
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| Directors |
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As an insolvency specialist, we help businesses in financial distress by using a Deed of Company Arrangement (DOCA) to stabilise operations, protect the company from creditor action, and restructure its debts.
We act as voluntary administrators to quickly assess the business, engage with creditors, and design a practical DOCA that improves cash flow, preserves value, and delivers a better return than liquidation.
By negotiating reduced or deferred repayments and implementing operational improvements, we give viable businesses the opportunity to recover, continue trading, and exit distress on a sustainable footing.
A DOCA is a legally binding agreement between a company and its creditors that sets out how the company’s debts will be compromised or repaid after entering voluntary administration.
A DOCA takes effect once it is approved by creditors at the second creditors’ meeting and formally executed, usually within 15 business days of the vote (unless extended).
All unsecured creditors are bound by the DOCA, including those who voted against it or did not vote. Secured creditors are only bound if they agree to be included.
Yes. In many cases, the company continues trading while the DOCA is in place, subject to the terms of the deed and oversight by the deed administrator.
This depends on the DOCA terms. Creditors often receive a reduced amount (cents in the dollar) or staged payments over time, based on what the company can afford.
The duration varies. Some DOCAs last only a few months, while others run for several years, depending on the repayment structure and business recovery plan.
If the company cannot meet its obligations under the DOCA, the deed may be terminated and the company can be placed into liquidation.
No. A DOCA does not automatically release personal guarantees given by directors unless the creditor specifically agrees to do so.
It can be, where the business is viable and creditors are likely to receive a better return through continued trading rather than an immediate wind‑up.
The voluntary administrator usually becomes the deed administrator and is responsible for ensuring the DOCA is carried out according to its terms.
Note: The information provided is for general purposes only. It is not financial or legal advice. Please get in touch with a qualified expert from our team.
