What is Small Business Restructuring?
The legislation to enable Small Business Restructuring became active on 1 January 2021, but the infrastructure is not ready yet. We expect to be able to offer the new process in the second half of February 2021.
A Simplified Restructuring is a streamlined version of the more comprehensive Voluntary Administration (VA) process. It is the process whereby a business with less than $1 million of creditors enters a binding deal with its creditors, usually to legally reduce the debt owed.
We think this is a fantastic development for Australian Small Business. At Dissolve we have worked for over 10 years to develop streamlined processes to bring the costs down for Small Business. We welcome the introduction of new legislation allowing us to take this even further.
Dissolve currently assists hundreds of Small Businesses to restructure every year. Our highly systematised approach allows us to complete the process for small to medium businesses quickly and efficiently, and therefore at the lowest possible cost, making us the prefect choice for a Small Business Restructuring.
How does Small Business Restructuring Work?
Debtor in Possession
Simplified Restructuring can be contrasted with a Voluntary Administration where the reigns are handed to a Registered Liquidator who oversees all aspects of the running of the company for the length of the process. Because a Simplified Restructuring leaves the directors in control, the red tape and costs are dramatically lower.
Length of Process
A Voluntary Administration is a similar length at 30 days, but it is often extended.
Small Business Restructuring Practitioner
Employee Entitlements Must Be Brought Up To Date
This may be a significant stumbling block for many small businesses interested in using this process. Note that it will require all superannuation to be brought up to date.
Ending the Process
What Will it Cost?