Are you a small business struggling with your debts?
The Small Business Restructure Plan (SBRP) regime was introduced in response to the COVID-19 pandemic and to assist businesses to stay trading through and beyond the pandemic. The SBRP has numerous advantages compared with traditional restructuring vehicles such as liquidation or voluntary administration, including that:
- Under an SBRP, the director gets to retain control over the business operation throughout the restructure.
- The SBRP is a flexible tool which allows the company to pay a portion of the existing unsecured debts owed to creditors in exchange for wiping out the company’s debts.
- Payments can be made over time but not more than 3 years.
Eligibility Criteria
To be eligible, the company:
- Must be insolvent, or likely to be insolvent in the future.
- Have debts owing of less than $1 million.
- Its associated director/s have not utilised a SBRP or undertaken a simplified liquidation previously.
- Must not have been in Liquidation in the prior 7 years.
- Require all taxation lodgements to be up to date.
- Must have all employee entitlements that are due and payable are up to date.
Other benefits include that it is generally cheaper and quicker than traditional restructuring alternatives and that it may be possible for building companies to retain a QBCC licence where other insolvency events may see a director become an excluded person for a period of time.
Come see one of our insolvency and restructuring staff to advise on whether SBRP is right for you and help you navigate through the process.
Contact us today to ensure your estate is divided according to your wishes.
