The voluntary administration regime provides a procedure whereby an insolvent company can offer its unsecured creditors a commercial compromise of its debts. If the creditors accept the proposal, it is a means by which the company, or its business, can continue in existence.

However there are often circumstances where it is simply not feasible to enter into a commercial compromise with a company's unsecured creditors. In these cases, the regime is used to place the control of the company into the hands of an insolvency practitioner who will administer the business, property and affairs of the company whilst the company transitions into liquidation.

The attractions for the process are the speed with which it can be implemented and the flexibility it offers to the practitioner when managing the business.

The process itself is only an interim process (the outcome in most instances being either a liquidation or Deed of Company Arrangement) and it therefore requires an experienced practitioner capable of making swift and accurate decisions regarding the affairs of the company.