1 January 2021 saw the New Restructuring and Insolvency Process for Small Business come into effect.
A fact sheet in relation to this new process can be found on the Treasury website.
Some key points to consider are:
To be eligible to access this new process a small business must:
As we start a hopefully better New Year a lot of SME's will be looking for ways to ensure that they continue to survive. Now is the time to revisit business plans and look at strategies to help thrive in 2021.
A lot of businesses struggled with cashflow in 2020 during the various lockdown periods. Now is the time to be looking at how you can improve your cashflow moving forward.
Just as 2020 is coming to an end, so is the insolvent trading moratorium. It is vital that businesses do a health check and take corrective action if needed.
The temporary COVID-19 Safe Harbour changes to Corporations Act came into effect on 25 March this year and directors could retrospectively be personally liable for insolvent trading from that point.
A Creditors Voluntary Liquidation involves the directors and shareholders resolving to wind up the affairs of the company due to the insolvency of the business and effectively stop trading.
A Creditors Voluntary Liquidation can occur when a company has been placed into voluntary administration and a proposal for a Deed of Company Arrangement has not been accepted by creditors or terminates.
