If you have corporate clients who are small business owners, they may be eligible for a Small Business Restructure (SBR). The SBR regime was introduced to provide small businesses with a simple and cost-effective way to restructure their business and settle their debts while remaining in control of the company and its operations.
This update has been prepared for our Professional Practices Network (PPN), which offers essential support to colleagues from the accounting, legal, financial planning and banking industries. Through the network, we provide specialist services and educational updates across a range of areas.
If you have corporate clients who are small business owners, they may be eligible for a Small Business Restructure (SBR), especially if they:
- Relied on JobKeeper
- Accumulated Australian Taxation Office (ATO) and trade creditor liabilities during the past 12 months
- Relied on the landlord, bank, and equipment financier deferrals that are no longer mandatory
- Discussed solvency concerns with you, but want to continue trading and remain in control of their business.
About the Small Business Restructuring regime
The SBR regime was introduced to provide small businesses with a simple and cost-effective way to restructure their business and settle their debts while remaining in control of the company and its operations.
With the help of a Small Business Restructuring Practitioner (SBRP), a company can propose a plan to creditors to restructure their existing debts. Creditors vote on the plan and, if accepted, the SBRP will manage the distribution of funds to creditors. The restructuring period takes 35 business days and the directors remain in control of the business during this time.
How to qualify
To qualify for an SBR, the company must:
- Have less than $1 million in debt
- Pay all outstanding employee entitlements, including superannuation
- Have all tax lodgements up-to-date.
Why engaging a restructuring specialist can help your clients
Acting early may prevent potential issues from becoming insurmountable problems. An SBRP can help your clients diagnose core issues, allowing them to consider the options and develop solutions together before it's too late.
In our experience, clients are often time-poor, with crisis management pushed to the side in favour of core business operations. Working with an SBRP will benefit your clients by allowing them to design and implement a formal or informal restructuring plan that will save them money and improve the outcome of a restructure.
Our restructuring team is here to help
BDO's ASIC registered restructuring specialists are ready to support and work with you and your clients.
As a PPN member, BDO's Business Restructuring team offers a free one-hour initial consultation with you and your client. Our specialists can discuss all of the informal and formal restructuring options available.