15 Jan New insolvency rules
Important changes to Australia’s insolvency laws commenced operation on 1 January 2021.
The measures apply to incorporated businesses with liabilities less than $1 million and are expected to cover around 76 per cent of businesses currently subject to insolvency. The new rules do not apply to partnerships or sole traders.
The Treasury’s Simplified Debt Restructuring factsheet states the conditions that companies need to satisfy to be eligible to access this new process.
The Government has made changes to Australia’s insolvency framework to better serve small businesses, their creditors and their employees. As part of these changes, the Government has introduced a new, simplified debt restructuring process for eligible small businesses from 1 January 2021.
The process allows financially distressed small businesses to access a single, streamlined process to restructure their debts, while allowing the owners to remain in control of their business. This will support more small businesses to survive, meaning better outcomes for businesses, creditors, employees and the economy.
Further information for small businesses on how the new streamlined restructuring process will work and how to access it can be found in the factsheet.