Most failed companies entering liquidation in Australia leave creditors with little or nothing, a new ASIC review has found - and the data arrives as insolvency continues to run at elevated levels across the economy.
ASIC published Report 843 on Tuesday, examining 26,664 liquidation appointments between July 1, 2021 and June 30, 2025. The regulator said it was the first time it had released this level of detail on the processes.
Most of the companies involved were small and held little by the time they failed. About half of all liquidations realised no more than $10,000 in assets, and around one quarter realised none. Only 5.3% of finalised liquidations paid a dividend to ordinary unsecured creditors, at a median of 9.8 cents in the dollar. In 88.1% of finalised cases, ordinary unsecured creditors received nothing, and liquidators were either paid less than approved or received nothing themselves.
Most of the companies were modest in size. About 69% reported liabilities below $1 million and 89.6% had five or fewer employee creditors. Median liabilities ran between $410,000 and $530,000 across the review period, and the median age of a company entering liquidation was seven years. About one in five appointments involved a company with at least one director who had previously directed another company that entered liquidation.
ASIC commissioner Kate O’Rourke urged directors to monitor their finances closely and seek advice early. “Taking action early gives a company more options to address financial difficulties,” she said. “The longer action is delayed, the fewer options may remain to restructure the business, preserve value or limit further losses to creditors.” ASIC has also added a learning module to its Small Business Director Essentials hub to help directors spot early warning signs.
The simplified liquidation process, introduced in 2021 to reduce cost for small companies, is still rarely used. Only eight were adopted in 2024-25, about 0.2% of creditors’ voluntary liquidations with reported liabilities not exceeding $1 million.
The findings arrive as insolvency continues to run at elevated levels. ASIC statistics for 2025-26 show 14,152 companies entered external administration for the first time. Construction accounted for 24.5% of them.
With fewer than one in twenty liquidations returning any dividend to unsecured creditors, the case for trade credit insurance starts with a straightforward question: when your biggest customer fails, how much of what you are owed do you expect to recover? The ASIC data suggests the honest answer is almost nothing. National Credit Insurance group managing director Kirk Cheesman has previously told Insurance Business that brokers are closely involved in negotiating trade credit policies for clients exposed to counterparty failure.
Directors’ exposure is a separate conversation. The finding that one in five liquidated companies had a director with prior insolvency experience in their history will interest underwriters assessing D&O applications. For brokers advising company directors, ASIC’s data on director recidivism reinforces the importance of checking clients’ personal liability cover is adequate and current. Law firm Carter Newell has previously flagged the specific obligations brokers can help directors understand around solvency monitoring and early intervention.
ASIC has released a data pack alongside Report 843, allowing users to filter results by appointment type, available assets and creditor profile. Brokers may find it a useful reference when clients ask what happens when a customer fails.
