The Australian Government has made changes to our insolvency framework to help more small businesses restructure and survive the economic impact of COVID-19.
Where restructuring is not possible, businesses will be able to wind up faster, enabling greater returns for creditors and employees.
Two new processes are available for small businesses from 1 January 2021:
- simplified liquidation framework
- small business (SB) restructuring plan.
Eligibility
The new processes are available to incorporated businesses with liabilities of less than $1 million:
- simplified liquidation – you must have all your lodgments up to date to be eligible
- restructuring – before providing a restructuring plan to creditors you must have
- paid all employee entitlements that are due and payable (including superannuation)
- your tax lodgments up to date (or at least been 'substantially complying' with this requirement).
You can view your lodgement information in Online services for business.
What practitioners need to do
From 1 January 2021, you can notify us of the proposed plan with supporting documents by either:
- secure mail message in Online services for business
- fax or mail using the Debt insolvency cover sheet (NAT 14588).
New subject selections are available for both:
- simplified liquidation
- SB restructuring.
Next step:
- Contacting us about insolvency – submit your information to us via Online services for business or by fax or mail using the cover sheet.
See also:
- Insolvency reforms to support small businesses recovery – Treasury media release, 24 September 2020External Link
- Australian Securities & Investments CommissionExternal Link – for business