So what are the 6 things Small Business needs to know about Simplified Restructuring?
- The best thing about small business restructuring is it gives you breathing space and gets creditors off your back for a short period of time to allow you to focus on coming up with a plan. You have 20 business days to prepare a restructuring plan which creditors get to approve.
- Simplified Restructuring allows directors to stay in control of their business while working with a small business restructuring practitioner to develop a plan – meaning your business can continue to trade, keep the doors open, and employ staff.
- Only financially distressed businesses operated by a company can do a small business restructuring plan – Sole Traders or Partnerships do not qualify.
- Businesses must have total liabilities of less than $1 million, to qualify. Also, tax lodgements and employee entitlements must be up to date – this does not include employee entitlements not yet due for payment, such as annual or long service leave.
- It is a cost-effective process.
- As not all businesses will be ready to access the reforms on 1 January 2021, the Government has introduced transitional provisions allowing eligible small businesses to lodge their declaration of intention to access the process. By lodging the forms and making the declaration you will have temporary relief from insolvent trading liability and responding to statutory demands from creditors for up to 3 months.
The earlier business owners consult with a Small Business Restructuring Practitioner, the more options may be available for dealing with the business into the future.
Olvera is launching its Olvera First programme for small business in January, to find out more https://olverafirst.com