Regime to commence from 1 January 2021
In brief
On 24 September 2020, the Treasurer announced that the Australian Government would introduce new legislation to give effect to:
- two new insolvency regimes for companies with liabilities of less than A$1m:
- a “debtor in possession” restructuring plan process (RP Process); and
- a simplified liquidation process (Simplified Liquidation);
- measures to increase the availability of insolvency practitioners to deal with the expected increased number of small businesses seeking to restructure or liquidate due to the economic consequences of COVID-19; and
- transitional measures to provide temporary insolvency protections for eligible small businesses that cannot find an Insolvency Practitioner or Small Business Restructuring Practitioner to undertake the RP Process during the period to 31 March 2021.
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