Well, here we are in 2021, and goodness only knows what is going to happen this year! What we do know, however is that many of the Federal Government’s COVID-19
Insolvency Relief Measures have ceased, and we have two new insolvency regimes, being the Small Business Restructuring Process and the Simplified Creditors Voluntary Liquidation.
Throughout 2020, we were encouraging businesses to make sure that they had a plan for when the Insolvency Relief Measures finished up and when JobKeeper was no longer on the table. We know that (at this stage) JobKeeper will continue until 31 March 2021 and that many businesses have already come off JobKeeper, however there will be a number of businesses and industries adversely affected when the wage subsidy payments are no longer forthcoming.
So, what’s the plan?
The first step for most businesses is to make sure all their tax lodgments are up to date. Not only does this allow for a clear picture as to overall debt, in order to deal with same, but it is also a requirement for entering into either a Small Business Restructuring Plan or the Simplified Creditors Voluntary Liquidation.
Secondly, company directors need to have a good look at the company’s solvency position, given the protection against insolvent trading has now ceased. Can the company pay its debts as and when they fall due? If not, the company directors may be personally liable.
Thirdly, if there are any concerns or queries in relation to issues around insolvency or if company directors want to consider their options in regards to restructure (or just generally what the next steps might be) now is the time to have a discussion with a qualified Restructuring Insolvency and Turnaround Specialist. At SMB Advisory we provide these initial meetings to discuss the options available free of charge.
Call us on 1800 SMB ADVISORY (1800 762 238) or click here to send us an email.
Remember the quote attributed to Benjamin Franklin: “By failing to prepare you are preparing to fail.”
This article is intended to provide general information only in summary format on relevant issues. It does not constitute legal or financial advice, and should not be relied on as such.