Distressed companies have options- if they seek help early. The extension of JobKeeper 2.0 that commenced on 4 January and runs through to 28 March includes a provision for lower rates for full- and part-time employees.
If JobKeeper is the life preserver keeping your business afloat, do you have a plan for when it ends? With nearly 3 million people from 760,000 businesses on JobKeeper benefits, it stands to reason that many of those companies may struggle once the JobKeeper scheme ends.
New insolvency law reform underway
The Corporations Amendment (Corporation Insolvency Reforms) Bill 2020 was introduced in September 2020. It included a group of amendments making changes to Australia’s Corporations Act with the main objective of providing relief to the small business sector. The recommended adjustments shift the traditional insolvency regime from one that is predominantly creditor-led to an amalgam of creditor-led and debtor-in-possession processes. It passed Parliament and received royal assent on 10 December 2020. It commenced on 1 January 2021. Discover articles related to this here:
There are three key elements to this insolvency law reform:
- Small business restructuring that permits a quicker and less complicated process for debt restructuring
- Small business liquidation conduit to allow eligible companies to efficiently move through the liquidation process
- Additional measures ensuring a prompter response from the restructuring and insolvency sector
Our team at FerrierSilvia is well-versed in these reforms as well as traditional approaches and can advise a small business on how best to leverage the new provisions to their benefit.
Seek help early to avoid business insolvency
Seeking early help can potentially reduce the risk of bankruptcy, business insolvency, and insolvent trading and increase the chances of business recovery and turnaround. Businesses that knowingly cannot afford to repay debts yet continue to operate and incur additional debt are in jeopardy of business insolvency. Engaging in insolvent trading can result in fines and even imprisonment. Do not wait until your business is on the verge of insolvent trading before reaching out to us. We can take steps to try to preserve your business and efficiently manage wind-downs when necessary.
Navigating financial challenges together
At FerrierSilvia, we provide a comprehensive range of restructuring and advisory services. We give clients clarity and direction, lending our expertise as we navigate their financial challenges together. Leverage our experience and expertise on how these new changes will affect your bottom line. Phone us on +61 2 8263 2300 or enquire online to schedule your no-obligation consultation.