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High Court expends use of examination summonses1

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A recent court decision means that examination summons may now have expanded usage. The ruling overturned the NSW Court of Appeal’s decision to set aside the summons of a company’s shareholders to a former director. The scope and purposes for which an examination summons can be issued has been expanded by virtue of this ruling. The decision is a boost for shareholder class actions and can potentially increase litigation relating to corporate liquidations.

Under s596A in the Corporations Act 2001, the court can summon the officer of a company under external administration for examination regarding to corporate affairs. The examination however also amounts to an abuse of process under certain conditions.

If you have a situation where you have received a notice to attend an examination or believe a company you have engaged with requires further scrutiny, please contact What is Liquidation for a free no obligation 30min discussion to understand your options.

Accountants recommend review of SME structures2

Business Difficulties

Accountants have made pre-budget recommendations to review the structures used by small and medium enterprises (SMEs) and introduce the concept of a “small or medium business company” by which SMEs can choose to be taxed in the manner of partnerships, and trusts can be taxed like companies.

The accounting body considers that the structural shifts propose would remove SMEs from complex provisions in the tax system, with a view to prioritising business and economic growth. The idea is to create a business-friendly environment and with financial and non-financial measures.

A suggestion has been made for the shift away from direct financial support for business in the upcoming federal budget. Alternative forms of support have been suggested, which will be cost-effective and take into account major disruptions. Gavan Ord of CPA Australia suggested a voucher policy be introduced, which gives businesses access to advice.

If your business requires expert attention to dissect your financial position and provide guidance on how best to maintain the status quo, improve performance or recover from precarious situation, please contact What is Liquidation.  

Probuild Collapse leaves SMEs in lurch3

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Probuild, a major Australian building company, has entered Voluntary Administration caused by a problematic high-rise project. This has caused 750 employees across Australia to down tools after the parent company pulled the plug. Probuild is working with administrators at this moment to protect employees and preserve current works.

This also impacts upon contractors and suppliers for projects, with many businesses connected directly or indirectly to Probuild through these relationships. Supply chain issues also play a part.  We have already fielded calls from the next layer and are working tirelessly to ensure the domino effect is minimised.

Probuild’s work has an estimated worth of $5 billion, including landmark projects and with one of their major shareholders feeling the global impact of COVID a decision was made to hit “pause” on the Australian operation.

If you have been impacted by Probuild’s situation and are encountering similar issues on a smaller scale, please contact What is Liquidation for expert guidance in the construction industry.

1 Johnson Winter Slattery and High Court of Australia
2 Accountants Daily
3 SmartCompany