Voluntary administration and director penalty notices

Appointing a voluntary administrator within 21 days of a non-lockdown director penalty notice (DPN) remits the penalty. The administrator takes control of the company and creditors later decide its future, which may be a deed of company arrangement (DOCA), liquidation, or a return to the directors. Administration does not remit lockdown amounts, and an appointment after the 21 days no longer removes your personal liability.

How administration deals with a DPN

See lockdown vs non-lockdown DPNs and how to count the 21 days. Weekends and public holidays count.

When administration may suit

• The company has a viable business but debts it cannot meet, and it does not qualify for small business restructuring, for example because its liabilities are more than $1 million.
• A deal with creditors through a DOCA may give a better result than liquidation.
• Creditors are taking enforcement action and the business needs breathing space.

What happens once an administrator is appointed

1. The administrator takes control. The directors’ powers are suspended, and the administrator runs the company and investigates its affairs.
2. Creditors meet. The first meeting of creditors is held within 8 business days of the appointment.
3. Creditors decide. At the second meeting, creditors vote on whether the company enters a DOCA, goes into liquidation, or returns to the directors. The ATO votes as a creditor.

While the administration runs, a creditor generally cannot enforce a director’s personal guarantee of the company’s debts without the court’s permission. For the full process, see our voluntary administration guide.

Timing within the 21 days

The appointment must actually be made within the 21 days. The directors must resolve that the company is insolvent or likely to become insolvent, and the administrator must consent. Allow time for both, well before the last day.

Administration compared with the other options

See also voluntary administration, SBR or liquidation: how to choose, and note that a payment plan does not remit a DPN.

Common questions

Does voluntary administration stop a director penalty notice?

Yes, for non-lockdown amounts, if the administrator is appointed within 21 days of the notice. It does not remit lockdown amounts, which can only be remitted by payment in full.

Who appoints a voluntary administrator?

Usually the directors, by resolving that the company is insolvent or likely to become insolvent and that an administrator should be appointed. The administrator must consent before the appointment is made.

Do the directors stay in control during administration?

No. The administrator takes control of the company and its business. The directors’ powers are suspended while the administration runs.

What happens after the administration?

At the second meeting, creditors decide whether the company enters a deed of company arrangement, goes into liquidation, or returns to the directors’ control.

Can I appoint an administrator after the 21 days?

Yes, and it may still help the company and its creditors. However, it no longer remits the director penalty, so you remain personally liable unless the amount is paid or a defence applies.

Sources: Taxation Administration Act 1953 (Cth) Schedule 1, Division 269; Corporations Act 2001 (Cth) Part 5.3A, including sections 436A and 440J; Australian Taxation Office, Director penalty regime (last updated 16 April 2026). This page is general information, not advice about your circumstances. Last reviewed: 9 October 2026.