ASIC’s annual insolvency data shows more than 11,000 companies entered external administration for the first time in 2023-24. While this is slightly higher than prior peaks seen in 2011–12 and 2012–13, it is proportionately smaller as there are now nearly 3.4 million companies in Australia compared to around two million in 2012.
The current ratio of companies entering external administration compared to the number registered (0.33%) is still below 2012-2013 (0.53%) levels.
Overall, the number of external administrations grew by 39% in 2023–24 compared to 2022–23. The top three industries – Construction (27%), Accommodation and Food Services (15%) and Other Services (9%) represented over half of total external administrations for 2023–24.
Restructuring appointments grew by over 200% in 2023–24 compared to 2022–23 and now represent 12.9% of all external administrations.
Small business restructuring allows eligible companies – those whose liabilities do not exceed $1 million plus other criteria – to retain control of its business while it develops a plan to restructure its affairs. This is done with the assistance of a restructuring practitioner with a view to entering into a restructuring plan with creditors.
Of the 573 companies that entered restructuring after 1 January 2021 and had completed their restructuring plan by 30 June 2024, 89.4% remain registered, 5.4% have gone into liquidation (one company had entered into a Deed of Company Arrangement) and 5.2% were deregistered as at 30 June 2024.