Does your company face liquidation or voluntary administration? What is the alternative for an insolvent business?
Company restructuring (also known as the small business restructuring process) is a relatively new process for restructuring insolvent companies that have total debts of less that $1m. There are three key criteria for qualification for company restructuring under part 5.3B of the Corporations Act:
- up-to-date company tax lodgements
- up-to-date employment entitlements and
- total liabilities of less than $1m.
The company restructuring process is less expensive than voluntary administration and to date it has had much higher success rates. We help our clients to prepare a restructuring plan and take the appointment as ASIC registered liquidators to propose this plan to creditors. If creditors vote in favour of a restructuring plan this will result in the reduction of total unsecured debts and a payment plan.
How long does this process take?
Meet with Sewell & Kettle to discuss insolvency options and whether the Company Restructuring process is suitable
02 Proposal period
Usually 20 business days from the start of the appointment of Restructuring Practitioner and during this period a Restructuring Plan is developed
03 Acceptance period
Usually 15 business day period for the creditors to consider and vote on the Restructuring Plan
If the plan is accepted this period goes for up to 3 years
What can a Restructuring Plan give a business?
- Whilst the restructuring process runs the directors remain in control of the business (in contrast to voluntary administration)
- A moratorium from creditor action whilst the process is on foot
- If approved by creditors a significant reduction in unsecured debt (including tax debt) that is owed by a company
- Time to pay a compromise amount (up to 3 years)
- Business continuity through the same company structure
- Removal of any risk of insolvent trading action through a liquidation process
- To date the restructuring process has had a much higher success rate than voluntary administration
- Take advantage of Company Restructuring by engaging a Restructuring Practitioner.
- Avoid a liquidation fire sale through a successful Company Restructuring plan.
- Get an evaluation about whether it is feasible to rescue your business from liquidation through Company Restructuring by contacting Sewell & Kettle.
The difference with Sewell & Kettle is that the firm is adaptive and knowledgeable
- There are few pre-insolvency advisers with our depth of experience in insolvency law and restructuring methodology
- We specialise in helping SMEs and entrepreneurs (whereas our competitors would prefer to work for banks)
- We are the only law and accounting firm that specialises in offering company restructuring
- Vast experience in dealing with companies in financial distress
- Urgent focus on getting results in crisis situations