Appropriately branded as the
most significant reforms
to Australia s insolvency framework in 30 years the
Corporations Amendment (Corporate Insolvency Reforms) Bill
was introduced to Parliament on 12 November 2020, following public
consultation in October 2020 and passed both houses on 10 December
2020.
The amendments to the
be effective from
implement a new
Small Business Restructuring
Process (likened to the US Chapter 11 process), by which
eligible small companies may restructure their debts with the
assistance of a Small Business Restructuring Practitioner, but
without the appointment of an external administrator or liquidator;
and
introduce a
Simplified Liquidation Process for
eligible small companies.
In a domain where the same familiar processes of administration,
A significant leap forward in Australia s insolvency regime
By Olvera First|10 January 2021
Promoted by Olvera First
Insolvency law has long been a blunt instrument for resolving the financial pitfalls of small business. Lacking the resources, knowhow and sheer resilience of their larger cousins, small businesses are ill-equipped to survive the insolvency process, often leading to sub-optimal outcomes for both owners and creditors.
Thankfully, change is here. The federal government has passed through the most wide-ranging reforms of Australia s insolvency framework in at least 30 years. While the changes are a direct response to the coronavirus pandemic – a catastrophe that has disproportionately affected small businesses – they re a long overdue reimagining of how debt restructuring can work for those with liabilities of less than $1 million.
Wednesday, December 23, 2020
For many, 2020 has been the year to forget. The Coronavirus pandemic (COVID-19) has halted global economies and initiated recessions across continents and countries, including Australia. In an attempt to alleviate the financial impact of COVID-19, the Australian Government has implemented various reforms (both temporary and permanent) designed to provide relief to financially distressed businesses. One sector hardest hit is that of small businesses and the Australian Government has now finalised a new restructuring process for small businesses, commencing on 1 January 2021.
Although the reforms, set out in the
Corporations Amendment (Corporate Insolvency Reforms) Act 2020 (Cth) (Act), have appeal across sectors, there are many who think that the time allowed for consultation and implementation of this new regime was insufficient for the changes to be properly assessed and considered before taking effect. This is a common theme around man
For many, 2020 has been the year to forget. The Coronavirus pandemic (COVID-19) has halted global economies and initiated recessions across continents and countries, including Australia. In an attempt to alleviate the financial impact of COVID-19, the Australian Government has implemented various reforms (both temporary and permanent) designed to provide relief to financially distressed businesses. One sector hardest hit is that of small businesses and the Australian Government has now finalised a new restructuring process for small businesses, commencing on 1 January 2021.
Although the reforms, set out in the
Corporations Amendment (Corporate Insolvency Reforms) Act 2020 (Cth) (Act), have appeal across sectors, there are many who think that the time allowed for consultation and implementation of this new regime was insufficient for the changes to be properly assessed and considered before taking effect. This is a common theme around many of the reforms introduced this year, and 2