Small Business Restructure Services
Expert Small Business Restructuring and Turnaround Support
At Restructure Partners, we assist small businesses facing financial difficulties to explore formal solutions under Australia’s Small Business Restructuring (SBR) process, introduced in 2021. This process allows eligible companies with total liabilities under $1 million to continue trading while addressing outstanding debts owed to creditors, including the ATO, suppliers, and employees.
A Small Business Restructure (SBR) gives company directors the opportunity to work with a registered restructuring practitioner to prepare a restructuring plan that sets out how admissible debts will be repaid. The goal is to achieve a better outcome for all parties than a simplified liquidation process or voluntary administration would typically provide.
Our qualified restructuring professionals guide you through the restructuring process, helping ensure your company’s proposal meets the formal eligibility criteria, complies with ASIC requirements, and allows you to continue trading during the restructuring period.
Understanding the Small Business Restructuring Process
The SBR process was designed to give viable businesses a streamlined alternative to liquidation. Here’s how it generally works:
Assessment of Eligibility
We help you determine whether your business meets the formal criteria under the Corporations Act 2001 (Cth), including having less than $1 million in total liabilities and being up to date with tax lodgements and employee entitlements.
Appointment of a Restructuring Practitioner
A registered practitioner is formally appointed to oversee the process and support directors in preparing the company’s restructuring plan.
Preparation of a Restructuring Proposal Statement
The company’s proposal is documented, outlining the admissible debts to be repaid, expected returns to unsecured creditors, and the projected ordinary course of business operations during the restructure.
Creditors Vote
Creditors review the proposal and vote within the acceptance period (typically 15 business days). Many restructures proceed where creditors see a benefit over liquidation.
Restructure Implementation
If approved, the company continues trading while the plan is carried out under the supervision of the restructuring practitioner.
This structured process can help stabilise operations and preserve value while providing transparency to creditors, employees, and shareholders.
Key Benefits of a Small Business Restructure
While outcomes vary based on each company’s circumstances, the SBR process offers several advantages compared with voluntary administration or liquidation:
Business Continuity
Directors remain in control of the company during the restructure, allowing normal management and operations to continue.
Cost Efficiency
The process is generally more affordable than a court-appointed liquidation or provisional liquidator scenario.
Protection from Certain Creditor Actions
Once restructuring begins, enforcement action by most unsecured creditors is restricted for the duration of the restructuring period, subject to certain exceptions under the Corporations Act 2001 (Cth).
Employee Entitlements
Staff can continue to be paid in the ordinary course of business.
Creditor Confidence
A transparent, legally compliant restructuring plan can help restore trust among suppliers and lenders.
Note: Each business’s eligibility and outcome will depend on its specific financial position and compliance history.
Director Responsibilities and Protections
Directors play a critical role throughout the restructuring process. Under the SBR framework, directors remain in control while working with a Registered Small Business Restructuring Practitioner to act in the best interests of the company and its creditors.
Key considerations include:
- Personal Guarantees: Directors should understand how personal guarantees given to banks or suppliers may be affected by the restructuring plan.
- Tax Debts: While the ATO is often a major creditor, directors must remain compliant with BAS, PAYG, and superannuation obligations to avoid Director Penalty Notices.
- Employee Obligations: All employee entitlements (including superannuation) must be paid and up to date for the company to remain eligible for restructuring.
Eligibility Criteria for Small Business Restructuring
To qualify for the SBR process, your company must meet the following conditions:
- Total liabilities do not exceed $1 million.
- All tax lodgements are current with the ATO.
- All employee entitlements due and payable are up to date.
- The business is incorporated under the Corporations Act 2001 (Cth).
- The company has not been under a formal restructuring or liquidation within the past 7 years.
If your business meets these criteria, the restructuring practitioner can assist in preparing a restructuring proposal statement and ensuring all documentation is submitted correctly.
Simplified Liquidation as an Alternative
If a restructuring plan is not viable, the simplified liquidation process may provide an orderly and lower-cost method for winding up a company.
This process helps ensure creditors are treated fairly, assets are distributed according to the Corporations Act, and directors fulfil their legal obligations.
In some cases, a court order may be required to appoint a provisional liquidator or to manage disputed claims.
Our team can guide you through what each option means and refer you to a registered liquidator where appropriate.
Why Choose Restructure Partners
Experienced restructuring practitioners with national coverage
Transparent, compliant, and results-driven approach
Dedicated support for directors navigating financial difficulties
Focus on protecting your company’s long-term value and reputation
⚖️ Legal & Compliance Notice
Information provided on this page is general in nature and does not constitute personal financial, legal, or taxation advice. Restructure Partners Pty Ltd Lead Generation Australia PTY LTD operates in accordance with applicable Australian taxation and insolvency laws and regulatory guidance. All restructuring services are provided by, or under the supervision of, a Registered Small Business Restructuring Practitioner (ASIC Reg. No. 561447). You should seek independent advice before acting on any information provided.