Insolvency

Insolvency is when a company or person can't pay debts when they are due.

There are several options available to an insolvent company or person:

• the most common corporate insolvency procedures for an insolvent company are liquidation, voluntary administration and receivership (see Closing a small business for more information)
• the available personal insolvency procedures for an insolvent person are bankruptcy and personal insolvency agreements.

ASIC regulates companies, it does not manage personal insolvency procedures. For more information about bankruptcy and personal insolvency agreements, visit the Australian Financial Security Authority website.

Find out how a corporate insolvency affects you:

More information

Insolvency notices

If you are owed money by an insolvent company or you are a creditor, search our Published notices website to find out if an external administrator has been appointed over a company.

Insolvency reforms for small business

Insolvency reforms for small business came into effect on 1 January 2021. These reforms followed the temporary measures introduced in March 2020 in response to the COVID-19 pandemic. These measures only apply to eligible incorporated small businesses with liabilities of less than $1 million.

The reforms include a new:

• debt-restructuring process for incorporated small businesses
• simplified liquidation process for incorporated small businesses
• ‘class’ of registered liquidator.

Corporate insolvency trends in Australia

See insolvency statistics for more information.

Not sure what that insolvency term means?

See Information Sheet 41 (INFO 41) Insolvency: A glossary of terms.