Receivership: What It Means for Your Company — and for You

Reviewed by Alex Hanley, Chartered Accountant — H&H Tax and Business Advisors
Last reviewed: 13 July 2026

Receivership is a form of external administration under Part 5.2 of the Corporations Act 2001 (Cth) in which a receiver — an independent, external insolvency practitioner — takes control of some or all of a company’s assets in order to collect and sell them and repay the party who appointed them. A receiver is almost always appointed by a secured creditor (usually a bank or other lender) under the terms of a security agreement, or, less commonly, by a court. The company itself keeps existing and the directors stay in office — but control of the secured assets passes to the receiver (ASIC — Receivership: a guide for creditors, INFO 54).

If a receiver has just walked into your business — or your lender is threatening to appoint one — the ground has shifted, but you are not out of moves. Receivership is different from voluntary administration and liquidation in ways that matter enormously for what you should do next. This guide explains who appoints receivers and why, what the receiver will actually do, what it means for you personally, and the options that remain open before and during the process.

Need to talk it through now? Call 0468 061 936 for a confidential, no-obligation conversation, or send an enquiry and we’ll call you back.

How receivership is different from voluntary administration and liquidation

The single most important thing to understand about receivership is who the receiver works for.

A voluntary administrator and a liquidator both owe their duties to the company’s creditors as a whole. A receiver’s principal duty is to the secured creditor who appointed them (ASIC INFO 54). The receiver is there to recover one creditor’s debt from the assets that creditor holds security over — not to rescue the company, not to investigate its affairs for everyone’s benefit, and not to distribute money to unsecured creditors beyond the specific priorities the law imposes.

That difference flows through everything:

• Who starts it. Directors initiate a voluntary administration or a creditors’ voluntary liquidation. Receivership is done to the company — by the lender, usually after default.
• What is controlled. An administrator or liquidator takes control of the whole company. A receiver controls only the assets covered by the security — although under a modern general security agreement, that is often effectively the entire business.
• Protection from creditors. Voluntary administration comes with a statutory moratorium that pauses most creditor enforcement. Receivership offers the company no such protection — unsecured creditors can keep suing, issuing statutory demands and applying to wind the company up while the receiver works. [VERIFY: confirm INFO 54’s current phrasing on unsecured creditor rights during receivership.]
• The company’s future. Liquidation ends the company. Administration tries to save it or produce a better creditor return. Receivership is agnostic: the receiver sells what they need to sell, and whatever is left afterwards is the company’s problem — and yours.

Because the receiver does not work for creditors generally, receivership very often runs alongside another process — more on that below.

Who appoints a receiver — and why

Appointment by a secured creditor (the usual route)

Most receivers are appointed privately by a secured creditor exercising rights under a security agreement — today usually a general security agreement (GSA) over all of the company’s present and after-acquired property, registered on the Personal Property Securities Register (PPSR) under the Personal Property Securities Act 2009 (Cth). Before the PPSA, the same instrument was known as a fixed and floating charge; many older documents still use that language.

The security agreement sets out the events of default that trigger the right to appoint. Common triggers include:

• missed loan repayments or an unpaid demand;
• breach of financial covenants or reporting obligations;
• an “insolvency event” — which is often defined to include the appointment of a voluntary administrator or liquidator, a statutory demand, or court action;
• anything the lender reasonably considers a material adverse change, depending on the drafting.

In practice, banks rarely appoint receivers out of the blue. Appointment usually follows months of warning signs — arrears letters, requests for updated financials, a transfer of the file to the lender’s “credit restructuring” or “asset management” team, an investigating accountant’s report, and formal demand. Every one of those steps is a window in which a director still has options. Once the receiver is appointed, most of those options narrow sharply.

The receiver must be independent and appropriately registered — a person generally cannot be appointed receiver unless they are a registered liquidator. [VERIFY: s 418(1)(d) Corporations Act 2001 — receiver must be a registered liquidator; confirm current wording and exceptions.]

Appointment by the court

Less commonly, a court can appoint a receiver — for example, to preserve assets while a shareholder dispute, ASIC investigation or other litigation is resolved. Court-appointed receiverships follow the court’s orders rather than a security agreement, and ASIC’s INFO 54 notes its guidance covers privately appointed receivers (ASIC INFO 54). If your company faces a court-appointed receiver, get legal advice specific to the orders made.

Receiver vs “receiver and manager”

If the appointment gives the practitioner power not just to collect and sell assets but to manage the company’s affairs, they are called a receiver and manager (ASIC INFO 54). Under a GSA over the whole business, appointments are usually of a receiver and manager — which is why a receivership can look and feel like the lender “taking over the company”, even though legally the company and its directors continue.

What the receiver actually does

Here is the process from the director’s chair, step by step, based on ASIC INFO 54 and Part 5.2 of the Corporations Act:

1. Takes control of the secured assets. From day one, the receiver takes possession of the assets covered by the security — under a GSA, typically the bank accounts, plant and equipment, stock, debtors, intellectual property and the business itself. The appointment is notified to ASIC, and the company’s public documents must state that a receiver (or receiver and manager) has been appointed. [VERIFY: s 428 Corporations Act — statement on public documents.]
2. Requires a report on the company’s affairs from you. Directors must complete and submit a report about the company’s business, property and affairs (the ROCAP) to the receiver — generally within 10 business days of the company receiving notice of the appointment. [VERIFY: s 429(2)(b) Corporations Act — 10 business days; confirm against ASIC’s directors’ obligations guidance.] Directors must also give the receiver access to the books and records.
3. Decides whether to trade on. A receiver and manager may continue trading the business — usually to preserve goodwill so it can be sold as a going concern. The receiver is personally liable for certain debts they incur in the receivership (for services, goods, and property hired, leased, used or occupied), with a right of indemnity from the secured assets, so the decision is made carefully. [VERIFY: ss 419 and 419A Corporations Act — controller’s liability for post-appointment debts and pre-existing property agreements.]
4. Collects and sells assets — with a statutory duty of care. When selling, the receiver must take all reasonable care to sell for not less than market value or, if there is no market value, the best price reasonably obtainable in the circumstances, under section 420A of the Corporations Act. [VERIFY: s 420A duty — confirm current provision.] This duty protects the company — and, indirectly, guarantors — from fire sales.
5. Pays out the proceeds in the required order. From the sale of circulating assets (broadly: cash, debtors and stock — the assets that turn over in trading), the receiver must pay certain priority debts before the appointing secured creditor — most importantly employee entitlements, paid in the order of outstanding wages and superannuation, then leave, then retrenchment pay. [VERIFY: s 433 Corporations Act — priority payments from property subject to a circulating security interest, applying the s 556 employee categories; confirm order and scope.] Proceeds of non-circulating (fixed) secured assets go to the receiver’s costs and then the secured creditor.
6. Reports misconduct. The receiver must report to ASIC any possible offences or irregularities they come across (ASIC INFO 54) — but unlike a liquidator, they have no general mandate to investigate the company’s affairs for the benefit of all creditors.
7. Retires. The receivership usually ends when the receiver has realised enough of the secured assets to repay the secured creditor (or has realised everything available) and completed their duties. Control of whatever remains goes back to the directors — or to a liquidator or administrator, if one has been appointed in the meantime.

What receivership means for you as a director

You stay in office — and your duties continue

Receivership does not end the company or remove you from office (ASIC INFO 54). Your directors’ duties under the Corporations Act — care and diligence, good faith, no improper use of position or information — all continue. So does your exposure to insolvent trading under section 588G if the company incurs new debts while insolvent in whatever part of its affairs the receiver does not control. Receivership is not a shield for the directors; in most cases it is a signal that the company’s insolvency now needs to be dealt with on every front, not just the secured lender’s.

Two cautions worth stating plainly. First, do not obstruct the receiver or move assets — hiding, transferring or dealing with secured assets to frustrate the receivership is creditor-defeating conduct with serious civil and criminal consequences, and shifting the business to a new entity to leave the debts behind is illegal phoenix activity (ASIC — Illegal phoenix activity). Second, do not go quiet: directors who cooperate promptly and honestly protect both their credibility and their legal position.

Your cooperation obligations

Practically, you must:

• deliver the books and records relating to the secured property, and give the receiver the access they ask for;
• complete the ROCAP within the statutory timeframe (ASIC — Directors: obligations to external administrators);
• answer the receiver’s questions honestly — giving false or misleading information to an external administrator is an offence;
• disclose related-party dealings and anything else material to the assets.

Personal guarantees

Most secured lending to private companies comes with directors’ personal guarantees. Receivership does not pause them — there is no moratorium on guarantee enforcement in receivership, unlike during a voluntary administration. If the asset sales leave a shortfall on the secured debt, the lender can pursue you personally for it.

This is why section 420A matters so much to guarantor directors: every dollar below market value that the assets sell for is potentially a dollar added to your personal shortfall. If you believe secured assets are being sold improperly, get legal advice quickly — and either way, bring every guarantee you have signed to your first advice meeting, including the ones buried in supplier credit applications.

A receivership does not answer the ATO

If the company also has tax debt, understand what receivership does not do. It does not deal with ATO debt, and the appointment of a receiver is not one of the events that remits a director penalty under a Director Penalty Notice. [VERIFY: confirm receivership is not a remission event under Div 269 Sch 1 TAA 1953.] For a non-lockdown DPN, remission within the 21 days from the date on the notice takes one of four actions: paying the debt in full, appointing a voluntary administrator, appointing a small business restructuring practitioner, or beginning winding up (ATO — Director penalty notices). Payment is not limited to that window — because the director penalty runs parallel to the company debt, amounts the company actually pays reduce the penalty at any time. A lockdown DPN — issued where activity statements were lodged more than 3 months after the due date (or not at all), or where the SGC statement was not lodged by its due date — is not remitted by any appointment: only paying the debt, or a statutory defence, removes that personal liability. If a DPN arrives while the company is in receivership, the DPN clock runs regardless — the two must be managed together.

If a lender is circling, or a receiver has just been appointed and you need to understand your position this week, call 0468 061 936 — confidential, no obligation — or send an enquiry and we’ll call you back.

What receivership means for employees

Based on ASIC — Receivership: a guide for employees (INFO 55):

• Jobs do not automatically end when the receiver is appointed. If the receiver trades on, employees who keep working are paid for their post-appointment work as an expense of the receivership.
• Pre-appointment entitlements have real protection from circulating assets. When the receiver realises circulating assets, employee entitlements must generally be paid from those proceeds before the secured creditor — wages and superannuation first, then leave, then retrenchment pay. [VERIFY: s 433 — as above.] If there isn’t enough for a category, it is shared pro rata.
• FEG is not available in receivership alone. The Fair Entitlements Guarantee is a scheme of last resort for employees whose employer enters liquidation — employees of a company that is only in receivership are not eligible unless the company later goes into liquidation (ASIC INFO 55).

As a director you will not control these payments — the receiver will — but your people will still look to you. Be honest about what you know, point staff to INFO 55, and work with the receiver on what can be communicated and when.

What receivership means for unsecured creditors

Unsecured creditors — trade suppliers, the ATO for most tax debts, customers with deposits — generally stand behind the receivership. The receiver owes them no duty beyond the statutory ones: the section 420A duty of care on sales, the section 433 employee priorities from circulating assets, and reporting offences to ASIC (ASIC INFO 54). Any surplus after the secured creditor is repaid goes back to the company (or its liquidator) — and in most receiverships over a whole business, there is little or no surplus.

At the same time, unsecured creditors are not frozen out of acting. There is no moratorium: they can still sue, issue statutory demands and apply to wind the company up. That combination — no money flowing to them and no bar on enforcement — is why a receivership over the whole business so often ends with the company in liquidation as well.

Receivership running alongside other insolvency processes

Receivership deals with one creditor’s security — so it frequently coexists with a process that deals with everything else. A company in receivership can at the same time be in provisional liquidation, liquidation, voluntary administration or subject to a deed of company arrangement (ASIC INFO 54). Common combinations:

• Receivership + liquidation. The receiver realises the secured assets for the lender; the liquidator takes everything else, investigates the company’s affairs (including director conduct, insolvent trading and voidable transactions), deals with unsecured creditors, and ultimately deregisters the company. The employee priority from circulating assets continues to bind the receiver even after a liquidator is appointed. [VERIFY: interaction of s 433 with a subsequent liquidation — confirm current position.]
• Receivership + voluntary administration. Directors can appoint a voluntary administrator before or after a receiver is appointed, and a secured creditor with security over the whole or substantially the whole of the company’s property has a short statutory window after an administrator is appointed — the “decision period” — in which it can still appoint a receiver notwithstanding the administration moratorium. [VERIFY: s 441A Corporations Act — decision period (currently 13 business days); confirm length and operation.] In practice this means appointing an administrator does not necessarily prevent a determined secured lender from installing a receiver — which is exactly why talking to the lender before appointing anyone is often the smarter sequence.
• After the receiver retires. If the receiver finishes and the company is left insolvent with unsecured debts unpaid, the directors still have to deal with that insolvency — typically through liquidation, or small business restructuring if the company still qualifies and has a business worth saving.

Your options before and during receivership

Receivership is one of the few insolvency processes a director cannot initiate and cannot directly stop. What you can do is act in the windows around it. As a rough sequence:

1. Before default: refinance or restructure the facility. If the relationship with the lender is strained but not broken, refinancing to another lender, injecting equity, or selling non-core assets to reduce the exposure can take appointment off the table. The earlier this starts, the more credible it is.
2. After default, before appointment: negotiate. Lenders generally prefer to be repaid without a receivership — appointments are costly and slow. A realistic, documented workout proposal (often supported by an accountant’s turnaround plan) can buy a standstill or a structured exit. This is also the point to take advice on safe harbour under section 588GA of the Corporations Act, which can protect directors from insolvent trading liability while a genuine restructuring course is pursued — it must be set up properly, and before, not after.
3. Consider a formal process on your own terms. If the company is insolvent or nearly so, directors can appoint a voluntary administrator (bringing the moratorium and an independent assessment), pursue small business restructuring if total liabilities are $1 million or less and eligibility criteria are met, or resolve on a creditors’ voluntary liquidation if the business is not viable. Be aware of the secured creditor’s decision-period rights in an administration, noted above — sequencing with the lender matters.
4. During the receivership: protect your position. Cooperate fully, watch the sale process (section 420A), take advice on your guarantees, keep the ATO position under control, and plan for what happens to the company — and to you — when the receiver retires.

Restructure Partners does not appoint or act as receivers, administrators or liquidators — those roles belong to ASIC-registered practitioners appointed by lenders, directors or the court. What we do is help you understand which of these windows you are in, what the realistic options are, and — where a formal appointment is the right path — connect you with registered practitioners who can act.

Receivership vs voluntary administration vs liquidation

Sources: Corporations Act 2001, Pt 5.2 and Pt 5.3A; ASIC INFO 54; ATO — Director penalty notices.

Which column your company lands in is partly still in your hands — but only in the windows described above. Call 0468 061 936 — confidential, no obligation — or send an enquiry and we’ll call you back.

How receivership ends — and what comes after

The receivership usually concludes when the receiver has collected and sold enough of the secured assets to repay the secured creditor, or has realised everything available, and has completed their duties (ASIC INFO 54). Three broad endings:

• The debt is repaid in full and remaining assets return to the directors’ control. The company may be able to trade on — though usually smaller, and still carrying its unsecured debts.
• The business is sold as a going concern to a new owner. Jobs and the operation may continue under new ownership; the company that employed you as director is typically left without its business, and its remaining debts still need to be resolved — often through liquidation.
• There is a shortfall. The secured creditor claims the balance as an unsecured creditor, guarantees are called on the directors, and the company generally proceeds into liquidation.

Whichever way it ends, the end of the receivership is a decision point for the director, not a finish line. What remains of the company — and what now sits on your personal shoulders — needs a plan.

Next steps: use the window you are in

The defining feature of receivership is that someone else holds the trigger. Everything a director can influence — refinancing, negotiation with the lender, safe harbour, a voluntary administration or restructure on your own timetable — happens in the windows before the appointment, or in how well you respond during it. The worst position is the one most stressed directors default to: waiting to see what the bank does.

Restructure Partners is an Australian specialist restructuring and insolvency advisory. We work with directors nationwide facing secured-lender pressure to map the options honestly — informal workouts, voluntary administration, small business restructuring and liquidation — and where a formal appointment is the right path, we connect you with ASIC-registered practitioners who can act.

• Call 0468 061 936 — confidential, no obligation, and we’ll tell you straight where you stand, including if there’s nothing a formal process can add.
• Or send an enquiry — confidential, and we’ll call you back.

Frequently asked questions

Who can appoint a receiver to a company?

A receiver is almost always appointed by a secured creditor — typically a bank or lender holding a security interest over the company’s assets — under the terms of its security agreement, usually after the company defaults. Less commonly, a court can appoint a receiver, for example to protect assets while a dispute or investigation is resolved. Directors do not appoint receivers; if directors want to initiate a formal process, the usual routes are voluntary administration, small business restructuring or liquidation.

What is the difference between receivership and liquidation?

A receiver is appointed by (and works primarily for) a single secured creditor, deals only with the assets covered by that creditor’s security, and the company continues to exist. A liquidator is appointed for the benefit of all creditors, takes control of the whole company, investigates its affairs, and winds it up — usually ending in deregistration. A company can be in receivership and liquidation at the same time.

Do directors lose their powers when a receiver is appointed?

Directors remain in office and their legal duties continue, but they lose control of the assets covered by the security — which, under a general security agreement, is often effectively the whole business. Directors must cooperate with the receiver, hand over books and records, and complete a report on the company’s affairs. They can still act for the company in areas the receivership does not cover, including appointing a voluntary administrator or liquidator.

Can a company keep trading in receivership?

Sometimes. A receiver and manager with power to run the business may continue trading — commonly to preserve value so the business can be sold as a going concern. The receiver, not the directors, makes that decision for the assets under their control. Whether anything remains for the company afterwards depends on what the asset sales realise and the size of the secured debt.

What happens to employees when a receiver is appointed?

Employment does not automatically end when a receiver is appointed. If the receiver trades on, wages for work done during the receivership are paid as an expense of the receivership. When the receiver sells circulating assets such as cash, debtors and stock, employee entitlements must generally be paid from those proceeds before the secured creditor. The Fair Entitlements Guarantee (FEG) is not available in receivership alone — it only becomes available if the company goes into liquidation.

Does receivership stop unsecured creditors from taking action?

No. Unlike voluntary administration, receivership does not create a moratorium protecting the company. Unsecured creditors can still sue, issue statutory demands or apply to wind the company up while the receiver deals with the secured assets — which is one reason receivership so often runs alongside, or leads into, liquidation.

What happens if the asset sales don’t cover the secured debt?

Any shortfall remains a debt of the company, and the secured creditor can claim it as an unsecured creditor — often in a subsequent liquidation. If a director has personally guaranteed the debt, the lender can pursue the director for the shortfall. This is why the receiver’s duty to sell for market value or the best price reasonably obtainable (section 420A) matters so much to guarantor directors.

Can a company survive receivership?

It is possible but uncommon. If the receiver repays the secured debt from asset sales and returns any remaining assets, control goes back to the directors — but by then the core assets have usually been sold, and unsecured debts remain unpaid. Where directors want to preserve the business itself, acting before a receiver is appointed — through refinancing, negotiation, restructuring or voluntary administration — usually gives more options.

Sources: Corporations Act 2001 (Cth), Part 5.2 (legislation.gov.au) · ASIC — Receivership: a guide for creditors (INFO 54) · ASIC — Receivership: a guide for employees (INFO 55) · ASIC — Directors: obligations to external administrators · ASIC — Illegal phoenix activity · ATO — Director penalty notices · Personal Property Securities Register · Fair Entitlements Guarantee (Department of Employment and Workplace Relations)

This page is general information only, not legal or financial advice, and Restructure Partners is not affiliated with ASIC or the ATO. Restructure Partners does not perform formal insolvency appointments — receivers, administrators and liquidators are ASIC-registered practitioners appointed by secured creditors, directors or the court. Whether and how receivership affects your company depends on its specific circumstances; please seek advice from a qualified professional about your own position before acting.