Supporting small businesses to trade profitably

Small business restructuring allows eligible businesses to negotiate debt under more favourable terms with its creditors, maximising the chances of trading profitably in the future.

This process allows you to remain in control of your business throughout the restructuring period, overseeing critical decisions to steer your company back on track. 

Our national Restructuring Practitioners (RP) will guide you through the restructuring process.

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Benefits of Small Business Restructuring

The key benefits of Small Business Restructuring include:

  • A more cost-effective process compared to voluntary administration
  • Short restructuring period
  • Favourable outcome than going into liquidation
  • Designed for small businesses in Australia
  • Company directors remain in control.

Eligibility criteria for Small Business Restructuring

To be eligible for Small Business Restructuring, your business must:

  • Be incorporated under the Corporations Act
  • Owe less than $1 million to your creditors(excluding employee entitlements)
  • Resolve that it is insolvent or likely to become insolvent at some future time
  • The current director or former director (acting in the past 12 months) must not have been a director of another company that has been through small business restructuring or simplified liquidation in the last 7 years.

Before a plan is offered to creditors, your business must:

  • Pay all outstanding employee entitlements, and
  • Lodge all outstanding documentation and returns to the Australian Tax Office (ATO).

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Small Business Restructuring Process

Appointing the Restructuring Practitioner

The process commences when the company director/s appoint the Restructuring Practitioner (RP). A person must be a registered liquidator to act as RP.

Restructuring plan development and implementation

The RP evaluates whether the company qualifies for small business restructuring and guides the directors in developing the restructuring plan. The company has 20 business days to formulate and present the plan to its creditors.  This plan enables the company to repay its creditors either partially or fully, offering more favourable outcome for all involved parties compared to liquidation.

Acceptance and creditor voting period

Subsequently, creditors are given 15 business days to vote to accept or reject the plan. Approval requires a majority of over 50% in value from unrelated creditors. The RP oversees the voting process.

Approval and plan application

If the plan is approved, the company can maintain its normal business operations while the plan is executed by the RP. The duration of the plan is limited to a maximum of three years.

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