This option introduced on 1 January 2021 as a result of Covid 19 is specifically aimed at small businesses and allows them to compromise their debts with creditor agreement and maximise their chances of trading profitably in the future.
Benefits / Eligibility:
- You must owe less than $1million to your creditors (excluding employees) and must be a company structure.
- Once a Restructuring Practitioner is appointed there are restrictions on the kinds of enforcement action that creditors can take during the restructuring period which lasts generally for 35 business days. These restrictions provide directors with ‘breathing space’ to focus on the most effective means of resolving the company’s financial problems.
- You remain in control during the restructuring period which makes it different to the Voluntary Administration option and for actively trading businesses results in lower professional costs.
- Largely retains the flexibility that is offered for larger businesses under the Voluntary Administration to compromise their debts and move forward.
Jones Partners has advised all types and sizes of businesses within the Small to Medium Enterprise segment and we can help you work out if you may qualify for this option and how best to deal with the present financial difficulties.