Are you a small business that is in financial crisis?
Are you overwhelmed by pressure from suppliers?
The small business restructuring process may be for you. The process is simple and is designed to give you greater time without payment pressure from suppliers and allow you to focus on your own business to make sure it survive.
Small business restructuring will allow you to remain in control of your business while we work with you to develop a restructuring plan – a proposal from you to your suppliers on how you are going to pay them.
small business restructuring
From 31 December 2020, the relief from insolvent trading claims for directors of both large and small companies ends, and directors will need to address their on-going obligations in trying to trade on.
The Australian Federal Government has announced changes to Insolvency Laws to help small businesses to negotiate their debts with their creditors in a cost effective and faster way.
1 January 2021 – small business restructuring is available
From 1 January 2021 the new small business restructuring process will come into effect allowing you to continue to trade while we help you negotiate a better deal with your suppliers.
We know you may not be ready – Lodge a declaration before 31 March 20201
You can indicate that you would like to consider small business restructuring before you actually commence the process by lodging a declaration here with ASIC before 31st March 2021. By lodging the declaration suppliers and creditors are stopped from taking action against you until you are ready to commence the process.
Is my business Eligible?
To be eligible, your business must:
- Be a company
- Have less than $1m in liabilities; and
- Have paid all employee entitlements and made all tax lodgements
How will small business restructuring work?
You Stay in control
You remain in control of your business while we work with the you to develop a restructuring plan. This plan is a proposal from you to your suppliers on how you are going to pay them.
This is different from the current model where creditors can appoint external administrators and the restructuring practitioner has control of the business during the process. Because a Simplified Restructuring leaves the directors in control, the red tape and costs are dramatically lower.
A Faster Process
The restructuring plan will have to be developed and submitted to creditors within 20 business days from when the practitioner is appointed. Creditors will then have 15 business days to vote and approve the restructuring plan once submitted and 5 days to lodge any dispute in respect to the amount they are owed.
Employee entitlements must be up to date
A business must pay any employee entitlements which are due and payable in full before any restructuring plan can be put to creditors. This may present an obstacle for many small businesses that have been heavily reliant upon the Government’s emergency COVID-19 support measures, such as JobKeeper.
What Will It Cost?
A fixed fee of $5,500 plus GST and statutory lodgement fees* up to the date of the approval by creditors. An additional fee based on a percentage of the distributions is charged for the adjudication and payment of claims if the proposal is accepted.
Register your interest to make sure you’re protected
The new declaration forms have now been released by ASIC. Register your interest below and we will send you the forms and manage the lodgement for you. By lodging the declaration suppliers and creditors are stopped from taking action against you until March 31 2021.
