INSOLVENCY REFORMS TO ASSIST SMALL BUSINESSES RESTRUCTURING
by Padmini Saheb
From 1 January 2021, the Government undertakes Insolvency Reforms to plan to keep businesses in business and Australians in jobs.
The Reforms, are to assist Small Businesses restructure and survive the economic impact of COVID-19.
The Key Elements of the Reforms are:
- The introduction of a new Debt Restructuring process for incorporated businesses with Liabilities of less than $1 million;
- Allowing eligible Small Businesses to restructure their existing debts while remaining in control of their business;
- A rapid twenty business day period for the development of a restructuring plan by a small business restructuring practitioner, followed by fifteen business days for Creditors to vote on the plan;
- A new, simplified Liquidation pathway for small businesses to allow faster and lower cost Liquidation.
The above measures will reposition our Insolvency System to reduce costs for Small Businesses and reduce the time they spend during the Insolvency Process.
Padmini is a Team Leader at Condon Advisory Group with over 20 years of experience in Personal and Corporate Insolvency.