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Insolvency (Part 2): Small Business Restructures, Voluntary Administration & What Happens Next
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Key Insights
Small Business Restructures are becoming a more common pathway. The episode explores the rise of Small Business Restructures and the ATO’s role in their growing use. For advisers, understanding when an SBR may be available is important when clients are facing financial pressure and need to consider formal restructuring options.
Voluntary Administration and DOCAs are different from SBRs. Voluntary Administration and Deeds of Company Arrangement operate differently from Small Business Restructures. The right pathway will depend on the client’s circumstances, including whether they qualify for an SBR, whether VA is commercially viable, and what outcome is being pursued.
Some clients will not qualify for or afford every option. Not every distressed business will be able to use an SBR, and some may not be able to afford Voluntary Administration. In those cases, advisers need to understand what alternatives may remain, including when a Creditors’ Voluntary Liquidation should be considered.
When a business is under financial pressure, the available insolvency pathway is not always obvious.
In Part 2 of this three-part Explain That series on insolvency, Andrew Henshaw is joined by Demian Walton to discuss the formal insolvency options available to distressed businesses, including Small Business Restructures, Voluntary Administration, Deeds of Company Arrangement and Creditors’ Voluntary Liquidation.
The episode is designed for accountants, lawyers and professional advisers working with clients facing business debt, ATO debt recovery, company liquidation risk or the need for practical insolvency advice.
The discussion covers:
- the rise of Small Business Restructures and the ATO’s role in their growing use;
- how Voluntary Administration works;
- the role of a Deed of Company Arrangement, or DOCA;
- when a Creditors’ Voluntary Liquidation may need to be considered;
- options for clients who do not qualify for an SBR;
- options for clients who cannot afford Voluntary Administration;
- commercial strategies from experienced insolvency practitioners; and
- what advisers should understand when clients are facing financial pressure.
Following Part 1, which focused on solvency, risk and the ATO crackdown, this episode looks at what happens next when a distressed business needs to consider a formal insolvency or restructuring pathway.
A practical discussion for accountants, lawyers and advisers supporting clients with business debt, company liquidation, ATO debt recovery or insolvency risk.
For advice on insolvency, Small Business Restructures, Voluntary Administration, Creditors’ Voluntary Liquidation or ATO debt recovery, contact Velocity Legal’s Insolvency team.
This podcast in no way constitutes legal advice. It is general in nature and is the opinion of the author only. You should seek legal advice tailored to your individual circumstances before acting on anything related to this podcast.
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