What is a Deed of Company Arrangement?
A Deed of Company Arrangement (“DOCA”) is a formal agreement to satisfy a company’s debts, made between the company and its creditors and any other relevant third parties. The Deed will set out the extent or nature of obligations, and relationships between those that are party to it. The Deed binds all creditors and releases the company from its debts at least to the extent provided for within its terms and conditions.

How long does a Deed of Company Arrangement last?
The DOCA runs for as long as is provided for in its terms. To be valid, a DOCA must state the period of moratorium and the duration of its operation, including an end date and/or ending conditions.

Are secured creditors bound by the Deed of Company Arrangement?
Secured creditors are bound by a DOCA only if they become a party to the deed or otherwise agree to be bound by it. The Court may make an Order which limits the rights of the secured creditor, but this is not common.

How does a Deed of Company Arrangement affect Director’s Guarantees?
Creditors who hold director’s guarantees are bound by the moratorium during the specified period, but can enforce them once the company is wound up. The release of the company’s debt under the terms of the Deed does not discharge a guarantor’s liability for any shortfall.

Can creditors alter a Deed of Company Arrangement after it has been signed?
Creditors may vary or terminate the DOCA by resolution at a creditors’ meeting. This meeting must be convened by an administrator at the request of not less than ten percent of the value of all creditors. Alternatively, the administrator may convene such a meeting of creditors at his own volition. Any amendment to the Deed must also have the consent of the company.

What happens to tax losses in a Deed of Company Arrangement?
A company proposing a DOCA is likely to have carried forward tax losses. These losses usually can be offset against profits from future trading of the company. However, carried forward losses may be lost or reduced if a company pays its creditors less than 100 cents in the dollar. Directors should seek tax advice before entering a DOCA that contemplates tax losses being available.

Can a Deed of Company Arrangement administrator pay dividends?
A deed administrator’s ultimate role is to pay a dividend to creditors.

How should a company subject to a DOCA be described?
Companies subject to a Deed Of Company Arrangement (DOCA) are required by law to promulgate their status. If for example, Acme Pty Ltd is subject a DOCA, the company must be described on all its public documents as “Acme Pty Ltd (Subject to Deed of Company Arrangement)”.

When does a Deed of Company Arrangement end?
The DOCA ends when their terms are completed and a final dividend paid to creditors.

What happens if the company does not comply with the Deed of Company Arrangement?
The company will be deemed to be in default if the terms of a DOCA are not satisfied. A default notice will usually be issued within a few days. If the default is not rectified within the period set out in the notice, the DOCA will be considered breached and may be terminated by; (1) the provisions of the agreement, automatically terminating the DOCA; or (2) by the passing of a resolution at a meeting of creditors, or (3) by an application to the Court. These options are likely to result in the company being placed into liquidation at that time.

We Specialise In Eradicating Financial Problems. Now Let Us Help You.

Are you feeling completely overwhelmed? Do you feel like there’s no hope for the business you’ve poured your heart, soul and savings into? Does it feel like you’re alone, battling against a horde of creditors and unpaid bills?

Well, we’re here to help. We want you to know that you’re not alone and there IS hope. At Turnaround Professionals, we specialise in saving distressed businesses all around Australia with fast, workable solutions to eradicate your financial problems and get you back on track.

About To Give Up Hope On Your Business? It’s Not Too Late.

The symptoms are always the same. You put more and more work into your business to no effect. You work longer and longer hours and yet the bills keep piling up and every phone call makes you jump, wondering if it’s yet another person asking for payment. But the thing is, the problem isn’t your product or service. More hours aren’t always the fix.

There are simple, concrete steps you can take with the financials of your business that will make a world of difference. What you need isn’t to work harder or to stress more. What you need is solid financial and business advice to help you pay down your debts, streamline your business and start making profit again. And that’s where we can help.

Here’s How We’ll Bring You Back From The Brink Of Bankruptcy:

Your own specialist financial distress team working to get your business back in the black and to turn your life around.
A realistic action plan customised for your unique situation which we will help you implement to slash your debts, trim excess costs and get your business profitable again.
Efficient strategies to help you and your family deal with the financial and emotional stress during this difficult time that will get back your quality of life.
Fast, workable solutions for any kind of financial problem that will help you get back on your feet in the shortest time possible.
In-depth finance analysis to unlock money from assets you never knew you had – so you can pay off those debts and stop stressing about unpaid bills.
Clear guidance in the case your business has to be closed, that will make sure you have the softest landing possible that minimises the impact on your family and quality of life.

REMEMBER! When facing bankruptcy every second counts. What you do in the next 24 hours could very well determine the fate of your business and quality of life. Simply fill in the form below and one of our specialist financial distress business coaches will get in touch with you right away.

Book Your Free Business Saviour Consultation Now