Australia’s insolvency framework underwent significant changes on January 1, 2021, to support small businesses in a challenging business climate.
If your business is spiraling under debt with an imminent risk of insolvency, liquidation or
administration, you’re in the right place. Know your options and get a clear actionable plan
now
Australia’s insolvency framework underwent significant changes on January 1, 2021, to support small businesses in a challenging business climate.
Our proven solutions are meticulously crafted to guide businesses out of the depths of debt, providing a personalised roadmap to financial freedom.
Our team is made up of individuals who have held directorial position.
AVA excels in conducting thorough financial assessments.
AVA places a strong emphasis on transparent communication and stakeholder empowerment.
Small Business Restructuring offers a straightforward avenue within the corporations law for companies to revamp their debt structure through the proposal and agreement of a Plan with creditors. This process empowers small businesses to restructure while retaining control under the directorship. Available to incorporated businesses, typically Pty Limited companies, the Small Business Restructuring process applies to those with creditors totalling less than $1 million. There are several other requirements for a businesses to qualify for Small Business Restructuring.
Our restructure process is your pathway to a more resilient and prosperous future. Comprising of four strategic steps, we will collaborate closely with you to navigate the complexities of reorganisation.
Pre-Appointment
We evaluate your current circumstances and verify your eligibility to commence a Small Business Restructuring process.
Restructuring
We identifying practical and feasible approaches for debt restructuring, ensuring continued operations, and facilitating creditor repayment. Once we craft a plan tailored to your preferences, we initiate negotiations with your creditors.
Execution Plan
If the majority of creditors, based on value, approve the Plan, it progresses. The a payment plan duration is capped at 3 years, and the company continues trading under the directors’ control throughout this phase.
A company must be able to declare that:
In response to the economic challenges posed by COVID-19, the Australian government introduced a streamlined process for small businesses to restructure their debt efficiently and affordably. This initiative aims to empower small businesses and their stakeholders by offering reduced costs, quicker turnaround times, easier access, and retained control through a debtor-in-possession model.
Who Can Benefit from Small Business Restructuring?
Incorporated companies with liabilities under $1 million (excluding employee entitlements) are eligible. Sole traders, registered clubs, and cooperatives are also eligible, excluding personal insolvency. To qualify, companies must be up to date with tax lodgments and make a declaration about their insolvency status.
How Does the Process Work?
Directors can continue normal business operations, subject to specific controls, during the restructuring process, which spans up to 35 business days. Divided into the proposal and acceptance phases, the process involves collaboration between directors and external practitioners to formulate a plan, followed by creditors voting on its approval or rejection.
What Restrictions Apply to the Plan?
Restructuring plans must include prescribed terms and conditions, ensuring equal treatment of admissible debts and claims. Plans are limited to a three-year term, and certain conditions may be attached, such as a sale of assets within a specified timeframe.
How Are Creditors Affected?
Secured creditors are subject to moratorium provisions, and related creditors do not vote on the plan but receive a distribution. The plan can be terminated under specific circumstances, and its variation requires a court order.
Role of the Restructuring Practitioner.
A Small Business Restructuring Practitioner (restructuring practitioner), typically a registered liquidator, oversees the process. Their responsibilities include determining eligibility, aiding plan development, certifying the plan for creditor votes, and managing disbursements if the plan is approved.
Connect with one of our experts today for a free consultation. Simply provide your information below or call us on 1800 181 220.
AVA Advisory
info@avaadvisory.com.au
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