Small business restructuring in Australia – Two years on, is the new process working as intended?
March 23, 2023
From 1 January 2021, Australia’s insolvency framework for small businesses changed. The purpose of the change was to assist small businesses, with debts under AUD $1 million, to survive – specifically, by providing these businesses with simpler, more flexible restructuring options outside the existing “one size fits all” voluntary administration and scheme of arrangement processes available under the Corporations Act 2001 (Cth). In many cases, those processes are too costly and time-consuming to be a realistic option for financially distressed, but viable, small businesses to pursue, often leading to a premature liquidation.
