ASIC report highlights low asset recoveries in Australia liquidations

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Highlights

ASIC Report 843 analyses 7,023 court liquidations and 19,641 creditors’ voluntary liquidations, with about half realising $10,000 or less in assets.
In 88.1% of finalised liquidations, no dividend is paid to unsecured creditors and liquidators’ approved remuneration commonly goes unrecovered due to low asset recoveries.
Simplified liquidation was adopted only eight times in 2024–25, representing 0.2% of eligible cases, highlighting continued barriers to uptake despite potential efficiency benefits.

Liquidation data and key findings

As reported by ASIC, Report 843 examines 7,023 court liquidations and 19,641 creditors’ voluntary liquidations, marking the first time the regulator publishes this level of detail on both processes. The review focuses on company characteristics, assets available at the point of liquidation, returns to creditors, liquidator remuneration and uptake of the simplified liquidation regime.

Many of the companies covered are small in financial and operational scale, with limited assets remaining when they enter liquidation. About half of all liquidations realise no more than $10,000 in assets, while around one-quarter realise no assets at all.

ASIC says those funding constraints, combined with evidentiary and commercial considerations, are affecting the investigations and recovery actions liquidators can reasonably pursue. In 88.1% of finalised liquidations, no dividend is paid to ordinary unsecured creditors and either no remuneration is approved or the remuneration paid to the liquidator is below the amount approved, indicating unrecovered remuneration is likely common.

The review also finds that around one in five appointments involves a company with at least one director who had previously been a director of another company when it entered liquidation. The median age of a company entering liquidation is seven years, 69% report liabilities of less than $1 million, and 89.6% have five or fewer employee creditors.

Simplified process and implications for directors

The simplified liquidation process introduced in 2021 continues to be used rarely. Only eight simplified liquidations are adopted in 2024-25, equal to about 0.2% of creditors’ voluntary liquidations with reported liabilities of no more than $1 million, although that threshold is only one of several statutory eligibility criteria.

ASIC says the findings are consistent with its submission to the Productivity Commission inquiry into reducing barriers to business dynamism in Australia, where it argues there are opportunities to improve access to simplified liquidation. Where companies meet the statutory criteria, the regulator says the process can offer a more efficient, timely and cost-effective wind-up while maintaining protections for creditors.

Commissioner Kate O’Rourke says the review reinforces the need for directors to monitor their company’s financial position closely and seek advice early when financial difficulties emerge. ASIC is also publishing a new online learning module through its Small Business Director Essentials hub, alongside a supporting data pack designed to help liquidators, industry bodies, academics and policymakers analyse liquidation outcomes in greater detail.

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