ASIC’s new review of insolvent liquidations found that many companies entered the process with few assets available to repay creditors. Report 843 examined 26,664 grouped appointments between 1 July 2021 and 30 June 2025, comprising 7,023 court liquidations and 19,641 creditors’ voluntary liquidations. The Australian regulator said the report provides its first publication at this level of detail on the two liquidation processes.
The review covers the characteristics of companies entering liquidation, their assets and liabilities, creditor returns, liquidator remuneration and the use of simplified liquidation. It found that around half of finalised liquidations realised no more than A$10,000 in gross assets, while around one-quarter realised no assets. Those constraints affect what a liquidator can investigate and recover, as well as whether funds remain for creditors after the costs of the process.
Small Companies and Limited Recoveries
The companies in the review were generally small in financial and operational terms. Around 69% reported liabilities below A$1 million, and 89.6% had five or fewer employee creditors. The median age of a company entering liquidation was seven years; 60.9% of appointments involved companies at least six years old. Median reported liabilities ranged from A$410,000 to A$530,000 over the period.
ASIC’s data also indicates that links to previous corporate failures are present in a portion of cases. Around one in five appointments involved a company with at least one director who had previously been a director of another company when it entered liquidation. The report describes this as a characteristic of the reviewed appointments; the finding alone does not establish misconduct or explain why an earlier company failed.
The volume of available assets was a central factor in liquidation outcomes. Limited funds can restrict the time a liquidator can devote to investigating a company’s affairs or pursuing potential recoveries. ASIC said evidentiary and commercial considerations also shape which actions can reasonably be taken. In cases where there is little value to recover, legal or investigative work may not produce a return sufficient to justify its cost.
That dynamic is reflected in the report’s findings on ordinary unsecured creditors. In 88.1% of finalised liquidations, no dividend was paid to those creditors. In those same cases, either no remuneration was approved or the remuneration paid to the liquidator was below the approved amount. ASIC said this indicates that unrecovered remuneration was likely common. The figures show how low asset pools can leave both creditors and insolvency practitioners without full payment.
Simplified Liquidation Remains Rare
The simplified liquidation process, introduced in 2021, was used infrequently. ASIC said only eight simplified liquidations were adopted in 2024–25. That represented about 0.2% of creditors’ voluntary liquidations with reported liabilities of A$1 million or less. The liability threshold is only one of several statutory eligibility conditions, so the number should not be read as the proportion of all companies that were eligible.
The regulator said the findings align with its submission to the Productivity Commission’s inquiry into reducing barriers to business dynamism, which identified opportunities to improve access to simplified liquidation. Where a company meets the statutory criteria, the process is intended to provide a more efficient, timely and cost-effective way to wind up the company while retaining protections for creditors.
The low number of cases raises questions about how effectively the simplified pathway is reaching eligible companies. The report’s figures do not by themselves establish why uptake remains limited. Eligibility requirements, awareness, practical circumstances and creditor considerations may all affect whether a company uses the process. ASIC’s earlier work also includes a 2024 review of simplified liquidations and a 2025 review of the small business restructuring process.
ASIC Urges Directors to Act Earlier
ASIC linked the findings to the importance of monitoring a company’s financial position and seeking advice when difficulties emerge. Commissioner Kate O’Rourke said that taking action early can leave more options available to restructure a business, preserve value or limit additional losses to creditors. Delay can narrow those options as cash and assets diminish.
The review’s liquidation data is retrospective, covering appointments over four financial years. It does not suggest that every financially distressed business will enter liquidation, or that liquidation is the only available response. ASIC has separately published an online learning module in its Small Business Director Essentials hub to help directors identify signs of financial difficulty and understand possible responses.
The findings also matter to creditors and policymakers assessing how the insolvency system works in practice. If most cases involve limited assets, the prospect of recovery may be small even where creditors have valid claims. For liquidators, the same constraint can limit the work that can be funded. The report and accompanying data pack offer a way to examine outcomes by appointment type, assets, creditor profile and other characteristics, rather than treating all liquidations as alike.
ASIC said the data pack is intended for registered liquidators, industry bodies, academics, policymakers and other stakeholders. Its availability may help inform future discussion about access to simplified liquidation and the practical limits of recovering value from insolvent companies. The report does not propose a specific legislative change in the release, but places granular evidence on the processes and their outcomes into the public domain.
Takeaway: ASIC’s review shows that small asset pools are a defining feature of many Australian liquidations, limiting both creditor dividends and the work that can be funded. The regulator is also highlighting the low use of simplified liquidation and urging directors to seek advice earlier when financial problems emerge.