To be eligible, your business must:
Be a company (Not a sole trader)
Have less than $1m in debt
John operates a hardware store through a company J&C Hardware Pty Limited, which has 3 years to go on its store lease which is $48,000 a year and he has two employees who earn $42,000 and $28,000 each. He currently owes suppliers $80,000 for inventory and the ATO $60,000 in unpaid GST. The company also owes John’s parents $400,000 when he bought the business off his father 5 years ago.
Is J&C Hardware eligible for the small business restructuring process?
|Unpaid rent to the end of lease||$144,000|
|Wages owed to staff (one month)||$7,500|
Given the debts are less than $1.0M the company meets the first part of the eligibility criteria. Before the plan is proposed the company must also pay monies owed to employees $7,500, and lodge its outstanding BAS and tax returns.