Among all the information in ASIC’s 2024-25 annual report is the fact that ASIC appointed 10 liquidators to wind up abandoned companies under s 489EA of the Corporations Act.
As I explained last year, ASIC wound up only 8 companies in the 2025 financial year, and 9 the year before. But at the same time, ASIC appointed 60 liquidators to its Abandoned Company Liquidator Panel, effective from 6 July 2025.
The reason this power is given to ASIC is that where the company has limited or no assets and has been abandoned by the directors (contrary to their statutory obligations) and with outstanding employee tax payments, winding up the company allows those employees to claim under the FEG scheme. The government acknowledges that the cost of employees putting the company into liquidation would be prohibitive.
Ten is not many; even derisory, given that one estimate has been that there are five times as many abandoned companies each year as there are companies in liquidation – say 50,000+: Insolvency – it’s all about the money, Helen Anderson, (2018) 46(2) Federal Law Review 287-312;
This led the 2023 PJC Report on Corporate Insolvency to recommend [10] that ASIC
“collect and analyse data from an appropriately sized sample of voluntary and compulsory de-registrations, to provide greater visibility of the solvency status of deregistered companies”.
The government response was to encourage ABRS, ASIC and ATO to collaborate to undertake an analysis using information available to each agency. This has now been passed on to the Productivity Commission to resolve. Its interim report is due in November 2026.
Background
Back in 2016, when the official liquidator role was ended, the government acknowledged that this would mean more companies being abandoned. Australia is unusual in not having a government official receiver in corporate insolvency.
Constitutional issues with the corporations power in 1909 ended that idea – for nearly 100 years.
Instead, Australia had to opt for a free enterprise ‘official liquidator’ role whereby the liquidator profession agreed to agree to take any court appointments to insolvent companies whether its liquidators would be paid or not, as long as they received some good matters thrown in.
That opaque arrangement continued for many years, extending to a select few, the A list, taking these appointments. In 1982, it was estimated that 70% of court appointments were non-paying. It led to a finding in 2013 of the corporate insolvency profession doing $47m of unfunded work annually.
Official liquidators were finally abolished in 2017, the government saying that instead, creditors applying to wind up a debtor company would most likely need to provide a guarantee of “a minimum amount” to a liquidator to agree to consent to being appointed. Perhaps thinking, rightly, that creditors would baulk at that arrangement, the government anticipated a reduction in the number of assetless companies being liquidated
‘as corporate insolvency practitioners would not be expected to commence such administrations without some form of guarantee or where they do not believe they are likely to be remunerated’.
The fall in the number of companies entering liquidation since then may confirm the outcome of the removal of official liquidators.
Reform?
As a root and branch insolvency reform issue, there is a logic is looking again at introducing an Official Receiver role in corporate insolvency. The 2023 PJC Report thinks so [rec 18] and the government supports in principle this recommendation but it is for the PC to consider.
All this comes out of there being (a mere) 10 abandoned companies wound up in 2025-2026.
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