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ights against the company are frozen. 19 This is to give an opportunity to an
administrator to concentrate on the management of the company without having to
fend off actions from creditors. 20 Hence, it is seen as a temporary measure while the
company is searching for a long term solution.
In Australia, the administration process is stated in Part 5.3A of the Corporations Act
2001. The Act particularly stated that the intention of the administration process is to
execute a deed of company arrangement (DCA). The objectives of this mechanism
are contained in section 435A of the Act which has only two objectives, similar to
the UK. 21 However, the third aim of administration in the Insolvency Act 1986,
namely to realize property in order to distribute it to one or more of the secured or
preferential creditors, is absent in the Australian legislation.
An administrator‘s function is to investigate the company‘s affairs, business,
property and financial circumstances as soon as practical, and to recommend whether
the company should execute a DCA, be wound up or to end the administration, 22 and
these functions do not differ from those in the UK. New Zealand amended its
Companies legislation in 2006, and as a result, a new Part 15A was inserted. The
new voluntary administration in force in the New Zealand legislation is modeled
after the Australian Corporations Act. Malaysia does not have similar provisions in
its Companies Act and the external management mechanisms remain in receivership
and liquidation.
The Malaysian Corporate Law Reform Committee (CLRC), in 2007, published a
consultative document which, amongst other things, recommended the adoption of
19 Ibid, at [1-22].
20 Ibid.
21 For New Zealand see section 239A of the Companies' Amendments Act 2006.
22 Robert P. Austin and Ian M. Ramsay Ford’s Principles of Corporations law (14 th ed., Lexis Nexis
Butterworth, NSW, 2010) at [27-030], section 438B(2) of the Australian Corporations Act 2001;
section 239AE of the New Zealand Companies Amendments Act 2006.
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