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It is an agreement between your company and your creditors. There is no set plan, which means they are able to be very flexible. Usually, these plans involve a one-off contribution from someone such as a director, which is paid to creditors by the restructuring practitioner.

Your SBR practitioner, in consultation with you, has 20 business days to draft a restructuring plan that your creditors will vote on (This can be extended by up to 10 business days). Once presented, your creditors then have 15 business days to accept or reject it. While they are deciding, your business can continue to trade.

All unsecured debts that were incurred prior to your company entering restructuring are included, with the exception of employee entitlements that are not yet payable, such as leave and redundancy payments. If your company incurs debts after it enters restructuring, these debts do not form part of the plan and need to be paid off outside the plan.

Yes. The business must pay any employee entitlements which are due and payable before a
plan can be proposed to creditors.

Eligibility must satisfy these conditions:

• Total debts not exceeding $1 million
• Be insolvent or likely to become insolvent
• Employee entitlements are up to date
• Tax Office lodgements are up to date. Note you can still have money outstanding
• The company must not have previously used the small business restructuring process or the simplified liquidation process within the past 7 years

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Alternative solutions might be possible such as:

• Safe Harbour
• Voluntary Administration
• Creditors Voluntary Liquidation

Best to contact one of our experts to discuss your options.

If your plan is rejected, then the restructuring process is over. While you remain in control of your company, your creditors are able to enforce their rights. Your protection from liability for insolvent trading also ends. Your options now include voluntary administration or liquidation.

The fee of the Restructuring Professional for developing the restructuring plan and liaising with Creditors about the SBRP is agreed and fixed up-front.

First you appoint a small business restructuring practitioner who needs to be a registered liquidator. They will act on your behalf during this process and ensure you are compliant with the following:

• Employee entitlements that are due have been paid, excluding leave and other entitlements not currently due to be paid.
• Tax lodgements are up to date.