The SBR process was created in January 2020 to enable more Australian small businesses to quickly restructure and survive. Throughout the SBR the company’s directors retain day-to-day control of the company’s affairs without liability for insolvent trading.
The SBR is designed to be used with uncomplicated small businesses who want to put a proposal to creditors to compromise its debts or extend the payment terms (or both). Akin to the existing Deed of Company Arrangement (‘DoCA’) process achieved after a Voluntary Administration (‘VA’) [insert link to VA page], the SBR process is designed to allow these companies with creditors of less than $1 million (excluding employee entitlements) to restructure their debts without having to go through a VA first and without the complexity associated with a DoCA.
Brooke Bird can help company directors with the development, delivery and implementation of the plan. – we do all the heavy lifting for you. Once we put the plan to creditors they vote on whether to accept it or not. If it is not accepted, the company does not get placed into liquidation. There are however a few key criteria for being able to propose a plan that the company must have (or substantially complied with the requirement to have):
- paid all entitlements of employees that are due and payable;
- given returns, notices, statements, applications or other documents as required by taxation laws (within the meaning of the Income Tax Assessment Act 1997); and
- the directors have reasonable grounds to believe that there are no voidable transactions
To discuss your eligibility and how we can help you with entry into a SBR to save your business, please get in touch.
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