ATO Tax debt

Small Business

restructure

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Q&A

What is a Small Business Restructure?

The Australian government has made changes to Australia’s insolvency framework to better serve small businesses, their creditors and their employees. As part of these changes, a new, simplified debt restructuring process for eligible small businesses was introduced.

The process allows financially distressed small businesses to access a single, streamlined process to restructure their debts, while allowing the owners to remain in control of their business. This will support the survival of more small businesses, meaning better outcomes for businesses and the economy.

Eligibility Criteria

Registered Company

Your company must be a registered entity, e.g. Pty Ltd.  

Liabilities

Your total liabilities are under $1 million.

Tax lodgements

You have fulfilled all required tax lodgements.

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Employee entitlements

Employment entitlements are up to date, e.g. superannuation

Historic insolvencies

The directors, whether current or within the past 12 months, have not participated in the small business restructuring process or simplified liquidation in the last seven years.

the process

The Small Business Restructure (SBR) process is designed to be completed within a maximum of 35 business days, encompassing two main stages: 

Proposal phase (up to 20 business days)

The company’s directors collaborate with an appointed external SBR Practitioner to develop a restructuring plan.

Acceptance phase (up to 15 business days)

Creditors are given a timeframe of up to 15 business days to review and cast their votes on the proposed restructuring plan, ultimately deciding its approval or rejection.

Key steps to a
Small Business Restructure

What we help you achieve

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Appointment

Engage an SBR Advisor (such as AVA Advisory) to work with an SBR practitioner (who must be a Registered Liquidator) to pass a resolution of insolvency.

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Proposal development

We will work with you to develop a comprehensive restructuring plan, taking into account your past and present circumstances as well as your company’s financials.

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Creditor voting

Creditors are provided the plan, verify proof of debt and vote. Approval requires a majority of unrelated, registered creditors by value. AVA Advisory has a 100% success rate. 

Schedule a consultation

For a complimentary, no-obligation and confidential assessment of your situation, fill out your contact information and we will be in touch to schedule your consultation. 

FAQs

Frequently asked questions about the Small Business Restructuring (SBR) process.

Yes, you will maintain full control of your company throughout the restructuring process. 

No, you will not be taking on a loan to restructure your debt. The government-backed Small Business Restructure does not involve more debt to resolve your current debt. 

The SBR process is designed to be completed within 35 business days.

The impact is overwhelmingly positive. The default will be lifted off of your company and your personal assets will no longer be at risk. 

There are 5 main criteria: 

• Registered company (Pty Ltd)

• Total liabilities under $1 million

• Tax lodgements are up to date

• Employee entitlements are up to date (e.g. superannuation)

• Not have undergone restructuring in the last 7 years

• Debt reduction

• The default is lifted off of your company

• Free up cash flow

• Your business will continue to trade as normal

• Avoid further penalties and insolvency