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Small Business Restructuring

Small business restructuring (SBR) is one of the key services we offer at Helm Advisory and it is a part of our DNA. If your business is struggling financially and is in need of rescuing, we are here to help.

What is Small Business Restructuring (SBR)?

Small business restructuring (otherwise known as corporate restructuring or company restructuring) is a process that falls under the Corporations Act 2001. SBR isn’t just for turnarounds; it can be a viable strategy for businesses to consider if they wish to restructure the company’s affairs with the assistance of a qualified restructuring practitioner.

An SBR involves the appointment of a Small Business Restructuring Practitioner (SBRP) by the directors of the company. The appointed SBRP will assist the small business in restructuring its affairs so that the company can continue to operate in the future. Importantly, the SBRP will assist the directors of the company to develop a restructuring plan for consideration by the creditors.

Eligibility criteria for a Small Business Restructure (SBR)

In short, not every business is eligible to undergo a restructure. In order to meet the criteria, on the day the SBRP is appointed, the company must:

  • Be insolvent or likely to become insolvent in the future.
  • Have total liabilities less than $1m, including contingent debts but excluding secured debts.
  • Ensure all tax lodgements are up to date.
  • Have paid all employees’ wages and entitlements including superannuation, to date.
  • Not have undergone a small business restructure or a simplified liquidation process within the past seven years.

What are the benefits of an SBR?

There are four key benefits of choosing a small business restructure for your company,
including:

  1. Minimal disruption for directors: The company directors remain in control of the business and can continue to trade the business as normal.
  2. Creditors cannot take action: There is a moratorium against secured creditors taking enforcement action during the restructuring.
  3. SBRP paid a flat fee: The small business restructuring practitioner is remunerated with a flat fee and a percentage of payments made to creditors.
  4. Cost effective: An SBR is generally cheaper than a Voluntary Administration, however this is subject to the complexity of the matter.
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