The small business world in Australia is littered with statistics around business failures that could easily have been avoided with a little help. The first challenge is, of course, to determine that there is a problem, and then to understand the magnitude of the problem.
Some issues are not so grave as to be leading a small business into insolvency, while others may benefit from a formal SBR process.
SBR is a regime where an insolvent company can appoint an SBR Restructuring Practitioner (SBR RP) to put a proposal to pay creditors something less than 100 c/$. It can also be a more cost effective option for small businesses as opposed to other insolvency processes.
In an SBR, the SBR RP is there to assist the company in developing and preparing a restructuring plan for creditors’ consideration.
The SBR RP will liaise with the Company’s creditors in respect to verifying their debts and claims and resolving any debt disputes.
During the restructure and plan period, the director has complete control of the day-to-day operations of the business, in conjunction with its ordinary advisors (ie, accountants). The only time that the RP will be involved is if there are any transactions outside the ordinary course of business.
There are 2 distinct phases in an SBR, the Restructure Phase and then the implementation of the Plan itself.
The plan is terminated when its terms are satisfied and in such a circumstance the company is released from its admissible debts.