On 1 January 2021, the Federal Government’s post-COVID small business restructuring reform package came into effect. This package introduced into the Corporations Act 2001 (Cth) (Corporations Act):
- two new insolvency regimes for companies with liabilities of less than AUD 1 million, namely:
- a “debtor in possession” restructuring and restructuring plan process (Restructuring)
- a simplified liquidation process (Simplified Liquidation)
- temporary insolvency relief for companies (and their officers) that wish to enter restructuring but cannot find a registered liquidator able to act as the Restructuring Practitioner (RP) for the restructuring during the period 1 January 2021 to 31 March 2021, including:
- a temporary insolvent trading safe harbour for directors in respect of debts incurred in the ordinary course of business
- a temporary increase to statutory demand thresholds of AUD 20,000 and 6 months (otherwise AUD 2,000 and 21 days, respectively)
Continuing reading here.
