Small Business Restructuring: Empowering Directors to Maintain Control

In today’s economic landscape, small businesses face unprecedented challenges. For directors striving to navigate financial turbulence while retaining control over their company’s destiny, small business restructuring emerges as a compelling solution.

What is Small Business Restructuring?

Small business restructuring offers a lifeline to directors seeking to manage company debt effectively while safeguarding operational autonomy. This process, introduced amidst the economic strain of COVID-19, provides a structured framework for debt management and recovery.

Small Business Restructuring: PART 1

What is it and Why do you need it?

Why Choose Small Business Restructuring?

The allure of small business restructuring lies in its ability to empower directors. Unlike traditional insolvency processes that often involve relinquishing control, restructuring enables directors to steer their business through troubled waters while maintaining control.

Small Business Restructuring: PART 2

What are the Benifits

Key Benefits

Control Retention

Directors retain control over business operations and strategic decisions throughout the restructuring process.

Debt Management

With streamlined procedures and reduced costs, restructuring offers a feasible pathway for managing company debt and financial obligations.

Stakeholder Engagement

By actively participating in the restructuring process, directors can nurture relationships with creditors and stakeholders, fostering trust and collaboration.

Operational Continuity

Business operations can continue uninterrupted, ensuring minimal disruption to day-to-day activities and preserving customer confidence.

Small Business Restructuring: PART 3

Will it work for Me?

Is Small Business Restructuring Right for You?

If you’re a director grappling with financial challenges but unwilling to compromise on control, small business restructuring could be the ideal solution. Whether you’re seeking to restructure debt, streamline operations, or explore new growth opportunities, restructuring empowers you to chart the course for your company’s future.

Take the Next Step:

Discover how small business restructuring can empower you to regain control and drive your business forward. Contact us today to explore your options and embark on the path to financial resilience.

Empowerment. Control. Resilience. Small business restructuring puts the power back in your hands.

Small Business Reconstruction - How We Can Help

Our team at CreditReboot collaborates closely with accountants, legal advisors, financial institutions, and other professionals to navigate the complexities of small business reconstruction. With a wealth of experience spanning various industries, we possess a deep understanding of business dynamics and the ramifications of financial challenges.

Our mission is to optimise outcomes for all stakeholders involved in the restructuring journey, mitigating financial stress and fostering positive resolutions. Whether you’re a director seeking guidance through the small business restructuring process, we’re here to assist.

Contact us today for confidential assistance and expert assessment of your situation. Reach out to us at 1300 361 879 to learn more about how we can support you.

Small Business Restructuring: How it Works & the Benefits

The economic challenges brought about by COVID-19 prompted the government to introduce changes facilitating easier and less costly debt restructuring for small businesses. But what exactly is small business restructuring and how does it work?

Small business restructuring is designed to provide relief for small businesses by offering several key benefits:
Reduced Costs: The restructuring process aims to lower the financial burden associated with debt restructuring, making it more accessible for small businesses.

Shortened Turnaround Times: By streamlining procedures, small business restructuring aims to expedite the turnaround time, allowing businesses to recover more swiftly.

Increased and Easier Access: Small businesses gain improved access to restructuring options, enabling them to navigate financial challenges more effectively.

Retained Control: Through the Small Business Restructure, business owners and directors maintain control over their operations during the restructuring process.

Who Can Access Small Business Restructuring?

Small business restructuring is available to currently incorporated companies with liabilities totaling less than $1 million, excluding employee entitlements. To be eligible, all tax lodgments must be up to date, meaning directors have fulfilled their obligations under taxation laws.

Under the restructuring plan, all unrelated employee entitlements must be settled before presenting the plan to creditors. Directors are also required to declare certain company transactions and

provide reasonable grounds for believing they qualify for restructuring.

Restructuring is a one-time opportunity within a seven-year period for both the company and its directors. It is excluded if the company and directors have engaged in similar processes within the same timeframe.

Why Choose Restructuring?

Directors may opt for restructuring to salvage their business by managing company debt while retaining control over operations and creditor relationships.

Is Restructuring Available to Me?

While primarily targeted at companies, restructuring is also accessible to other incorporated entities such as registered clubs has to have commisioners approval. However, they, do not have a comparable option under personal insolvency regimes.

Directors must acknowledge the company’s insolvency or potential insolvency and resolve to appoint a restructuring practitioner.

What Do Directors Need to Declare?

Within five business days of initiating restructuring, directors must provide a signed declaration to the practitioner, confirming eligibility, any voidable transactions, and reasonable grounds for eligibility.

How Does the Process Work?

Directors can continue normal business operations throughout the restructuring process, which typically spans up to 35 business days and comprises two phases: Proposal Phase: Directors and external practitioners collaborate on a plan over a period of up to 20 business days. Acceptance Phase: Creditors are given up to 15 business days to vote on and approve or reject the proposed plan.

Understanding Small Business Restructuring

1. Is small business restructure the same as debt restructure?

Small business restructuring, is indeed related to debt restructuring. It involves a formal negotiation process with business creditors to settle debts in full and final settlement.

2. What is simplified restructuring?

Simplified restructuring is another term for small business restructuring. It's a process designed for formal negotiation with business creditors, offering a structured framework for settling debts.

3. Who can do a small business restructure?

Any business with total debts under $1 million can undergo small business restructuring, provided they meet certain conditions, including up-to-date ATO reporting and payment of employee entitlements.

4. What is a Small Business Restructuring Practitioner (SBRP)?

An SBRP is an independent professional appointed by the director to assist with restructuring the company's debt. Only directors can appoint an SBRP, who typically must be a registered liquidator or possess relevant insolvency experience.

5. How do you do a small business restructure?

The process begins with appointing an SBRP, followed by the director signing a declaration of eligibility. The restructuring plan is then prepared within 20 business days, presented to creditors, who have 15 business days to vote on its approval or rejection.

6. What is a debt restructuring plan?

The SBRP collaborates with the director to formulate a restructuring plan, which outlines proposals for satisfying creditors' debts. This could include payment over an extended period, lump sum offers, or proceeds from asset sales.

7. What issues do I need to consider if I am thinking of doing a business debt restructure?

Consider ongoing relationships with creditors, as well as the impact on secured creditors and personal guarantors. Also, related parties cannot vote on the proposal, and the restructuring process doesn't address personal asset protection needs.

Navigating small business restructuring can be complex, but understanding these key points can help you make informed decisions regarding your business's financial future. If you have further questions or need assistance, don't hesitate to reach out to us.

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