What happens to directors’ powers in receivership?

Directors stay in office but lose day-to-day control over assets covered by receivership; receivers manage the secured assets and major company decisions.

Do directors have ongoing duties in receivership?

Yes, directors must assist the receiver, provide access to records, and submit a Report on Company Activities and Property (ROCAP).

Must directors cooperate with the receiver?

Directors are legally required to cooperate fully, avoid obstruction, and respond quickly to information requests.

Can directors still make business decisions during receivership?

Directors’ powers are suspended for assets under receivership. Any assets not covered may remain under director control, but this is rare.

What is a ROCAP and when must it be provided?

A Report on Company Activities and Property (ROCAP) must be given to the receiver within 10 business days of their appointment.

Do directors risk personal liability in receivership?

Yes, directors may be personally liable for breaches of statutory duties such as insolvent trading or failing to cooperate with the receiver.

Are directors removed from office during receivership?

No, directors remain appointed but have reduced powers and increased duties.

What duties do directors retain in receivership?

Directors continue statutory duties: assist receiver, comply with laws, avoid insolvent trading, maintain compliance on taxes and employee entitlements.

How does receivership affect director correspondence?

Directors must include in all correspondence that a receiver is appointed, ensuring transparency to stakeholders.

What happens when receivership ends?

If the company survives receivership, directors regain full control over remaining assets and business operations.

Can directors face legal consequences if they breach duties?

Yes, directors who obstruct the receiver, fail to report, or breach statutory requirements risk civil or criminal penalties.

Should directors seek professional advice during receivership?

Early, expert insolvency advice is essential to clarify obligations, mitigate risks, and protect directors personally and professionally.

Do directors maintain responsibility for taxes and superannuation?

Yes, directors must ensure compliance with tax, superannuation, and employment laws during receivership.

Can receivership affect directors’ personal reputation?

Directors who fulfil all duties and cooperate fully are less likely to suffer reputational harm or personal liability.

Are director powers ever partly retained during receivership?

Occasionally, directors keep control over unaffected assets or parts of business not subject to receivership.

Why is full compliance vital for directors in receivership?

Full compliance reduces risk of personal penalties and positions directors for recovery opportunities post-receivership.

What practical steps should directors take in receivership?

Cooperate with the receiver, seek specialist advice, maintain compliance, communicate clearly, and prepare for post-receivership planning.

Can directors raise concerns about a receiver’s conduct?

Concerns should be addressed to the receiver first, and unresolved issues can be escalated to ASIC.

Does receivership mean the company is dissolved?

No, receivership does not dissolve the company; directors remain in office and may regain powers if the company survives.

Where can directors get practical support during receivership?

Contact The Insolvency Group for expert guidance, risk management, and support through receivership and beyond.

Essential Guide. How Does Receivership Affect Company Directors?

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How Does Receivership Affect Company Directors?

Key Impacts on Company Directors

Directors Remain Appointed—but Lose Key Powers: Entering receivership does not dissolve the company or remove its directors. However, directors’ ability to make decisions about company assets and some operations is suspended for the duration of the receivership. The receiver—appointed by a secured creditor or, less commonly, by the court—takes control of specified assets or the whole business, depending on the security agreement.
Directors’ Statutory Duties Remain: Even in receivership, directors must:
- Assist the receiver: Provide immediate access to company books, records, and information.
- Deliver a ROCAP (Report on Company Activities and Property): Within 10 business days after being notified by the receiver.
- Communicate clearly: All correspondence must indicate that a receiver has been appointed.
- Avoid obstructing the receiver: Any attempt to hinder recovery, access, or asset realisation can lead to legal consequences.
Potential for Limited Control: In rare cases where only part of the business/assets is subject to receivership, directors may continue to control unaffected operations. However, most secured creditor arrangements cover all key assets.
Ongoing Personal Risk and Responsibility: Directors continue to be exposed to personal liability for breaches of duty, including insolvent trading post-appointment if they act outside their limited role or don’t cooperate.

Steps Company Directors Should Take

Cooperate fully: Respond quickly to all receiver communications, and provide complete, accurate company records.

Stay informed: Know which assets and operations are under the receiver’s control.

Seek professional advice early: Get specialist guidance from The Insolvency Group to clarify your obligations and protect yourself from personal or legal risk.

Maintain compliance: Continue observing your statutory duties related to taxes, superannuation, and workplace laws.

Plan for next steps: After receivership ends, assess the company’s position and your next moves with expert support.

Receivership can be confusing and intimidating for directors—but it doesn’t strip you of all responsibility or power to act. By understanding your reduced (but crucial) role and acting with full transparency and cooperation, you reduce legal risks and position yourself for the best possible outcome after the process.

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What Changes for Company Directors in Practice?

If your company faces receivership, contact Andrew and the Insolvency Group for tailored guidance and support. We’ll ensure you understand every obligation, protect your interests, and confidently manage your responsibilities.

Aspect	Director’s Position in Receivership
Powers	Significantly reduced. The receiver controls assets and key decisions.
Legal duties	Still responsible for compliance and assisting the receiver.
Reporting	Must submit reports and answer all receiver requests promptly.
Communication	All correspondence must show that a receiver is appointed.
After receivership	Powers are restored if the company is not liquidated or dissolved.

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