Small Business
Restructuring

Specialised Solutions for Small Businesses in Distress

What is Small Business Restructuring?

A Small Business Debt Restructure (SBR) can be an excellent tool for an eligible company to enter into a formal negotiation process to restructure its debts and enable it to continue to trade. Eligible companies that are insolvent (or where directors have resolved that they are likely to become insolvent) can appoint a Small Business Restructuring Practitioner (SBRP). The SBRP will work with the directors to develop an offer to unsecured creditors for the settlement of their debts.

If more than 50% of the dollar value of the creditors who vote on the proposal accept the restructuring plan, it will reduce unsecured debts and establish a payment plan.

  • Small business owner

    Eligibility

    The eligibility criteria include:

    • The business must be operated as a company
    • The company has no more than $1 million in liabilities
    • Before a plan is offered to creditors, the company:
      • Can pay all entitlements of its employees that are due and payable; and
      • Has lodged all outstanding documentation and returns with the ATO
    • Neither the company, nor its current or previous directors in the last 12 months, have utilised small business restructuring or simplified liquidation in the 7-year period preceding the appointment of the restructuring practitioner

  • Calculator tax

    Control

    The most beneficial aspect of the SBR process is that it is a “debtor-in-possession” model. This means that the directors can remain in control and continue to trade the business as normal while the restructuring process is ongoing. This means there is minimal, if any, disruption to the business, staff or customers.

  • Small business owner

    Process

    Stage 1- Proposal Period

    The proposal period lasts for 20 business days, during which a company must appoint an SBRP and develop a Restructuring Plan.

    Stage 2 – Acceptance Period

    After the Restructuring Plan is sent to creditors, they have 15 business days to review and decide whether to accept it.

    Stage 3 – Restructuring Plan

    The Restructuring Plan must not exceed three years, treat all creditors equally, and allow for only one dividend. The Restructuring Plan generally ends when the company’s obligations under the plan have been fulfilled, and all admissible debts have been dealt with according to the plan.

  • Analysis

    High Success Rate

    The SBR process has proven to be highly successful in restructuring companies’ businesses. So far, creditors have approved 92% of proposed Restructuring Plans, with the average actual dividend being 15.2 cents in the dollar.

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Did You Know?

Commercial Necessity Phoenix is legal and recognises the fact that sometimes the need to restructure (phoenix) may arise out of events outside of the business owner’s control. This type of phoenix is considered a business rescue.

Business Restructure

How it Works

If you are considering a business restructure, de Jonge Read will review your situation carefully. We consider both business and personal aspects.

We then prepare a written recommendation, specifically designed to your unique circumstance on how to achieve the best outcome possible for you and your business.

We do this obligation-free and at no cost to you!

  • 1 Schedule a free consultation with one of our strategists
  • 2 A no-obligation tailored strategy is prepared to suit your individual circumstances
  • 3 If you decide to proceed, you’ll have a Strategy Support Officer assigned to you. Our team is here to hold your hand throughout the whole process