Frequently Asked Questions

Small Business Restructuring is a new process legislated in 2021. It allows struggling companies who meet specific criteria to offer a debt restructuring plan to their creditors. The process takes a maximum of seven weeks and can lead to a massive reduction in the total creditors payable. Small Business Restructuring allows the company to continue trading with a director maintaining control throughout the process.

A Small Business Restructuring Practitioner can help advise directors of the company to devise a realistic payment plan as well as control the necessary discussions and notifications with all affected creditors.

Under the Small Business Restructuring legislation, a debt restructuring plan can only be provided with the assistance of a government registered Small Business Planning Practitioner. At Small Business Restructuring Specialists , we focus our efforts on helping struggling companies turn things around using the provisions of this legislation.

Your company must comply with superannuation guarantee legislation requirements by ensuring that all payments are made on time. Delays can result in extra charges being made against the company and lead to directors being held personally responsible for the value of payments.

All of these notifications relate to an unpaid creditor seeking a court ruling to either collect outstanding monies or place the company into liquidation with a liquidator of their choice. Receipt of Winding Up Notices and Statements of Claims require an urgent response to ensure your business stays alive and that the outstanding amounts don’t become a director or guarantor’s personal debt. Contact a Small Business Restructuring Practitioner urgently if you receive any of these notices.

Safe Harbour legislation enables directors to trade a company while insolvent to either return it to profitability or provide a better return to creditors.

If a company is unable to pay its debts in full and on time but is still viable, then the best solution may be to appoint an administrator while creditors vote on a proposal regarding the future prospects of the business. The process of Voluntary Administration provides creditors with a better answer than if the company was placed directly into liquidation. It allows for the owners to consider methods of restructuring a struggling business and its current debts.

There are many reasons why a company may be placed into voluntary liquidation. Typically, it occurs because the business is insolvent and unable to pay its debts in full and on time. The company needs to appoint a government registered liquidator to administer the process. It is often referred to as a Creditors Voluntary Liquidation (CVL). This is because it’s designed to enable the most significant return possible for creditors. These individuals are also responsible for voting on certain areas in the process.

A liquidator is a government registered individual permitted to administer companies through the processes of Small Business Restructuring, Voluntary Administration and Liquidation.

Illegal Phoenixing is the movement of assets from the old company to a new business without the total current value of the objects being paid to the original organisation. For example, the owner or director of a struggling company may create a new company. They then may begin trading under the new name without paying for the assets from the original business. These items may include equipment, customer lists, or websites. Creditors in the old company are also left unpaid and can’t recover their debts.

Owners or directors should contact Small Business Restructuring Specialists urgently if they feel they may be in this situation or are being advised that this is their only way forward. There are safer options available that do not lead to the potential of personal liability against the director or owner.

Directors will have responsibilities under different legislations. Some of these may include:

• acting honestly and fairly in relation to the company and its dealings
• the payment of certain debts such as superannuation on time and in full
• occupational health and safety requirements
• accurate payment of employees

Often bank financing and trade creditor accounts require a director or family member to agree to and sign a personal guarantee. This places the financial burden on directors should the company not be able to repay the creditors on time. It can have severe consequences for a director’s personal finances. Contact Small Business Restructuring Specialists urgently if a creditor commences recovery via a personal guarantee.

Companies struggling to pay their GST, PAYG, and Income Tax debts may be approved for a payment plan from the Australian Tax Office. Approval for a payment arrangement may provide relief for a company’s short-term cash flow issues.

If you cannot pay your creditors in full and on time, you may be trading insolvently. This can lead to directors being responsible for the value of any extra liabilities incurred. It is essential to contact Small Business Restructuring Specialists urgently to discover what options are available to reduce this potential issue from occurring.

It makes sense to get advice from your accountant or solicitor. 

Only a registered Small Business Restructuring Practitioner can be appointed to assist with Small Business Restructuring legislation.

Only a registered liquidator can be appointed for Voluntary Administrations and Liquidations. 

We are subject matter experts and business management professionals with more than 25 years of experience in liquidation, insolvency, debt reduction, debt restructuring, company management and more.

Our staff are long standing members of CPA and IPA.