When the Small Business Restructuring Legislation (SBRL) (Part 5.3B of the Corporations Act) was first introduced I was a bit dubious as to whether it would prove useful to small business. In hindsight this was because I was considering it against a pre-Covid market place and, other legislation released by the Feds at the same time, Simplified Liquidations. Least to say the later was simplified from a Government perspective only and I’m still not a subscriber. Things have definitely changed the way we do business post Covid, so to have the problems facing small business. Covid has left many a good small business with serious but resolvable financial problems and the SBRL may be the tool to provide those solutions. Also the attitude to restructuring in Australia seems to have changed due to Covid, with most businesses experiencing some form of negative financial impact from Covid. The SBRL is nowhere near as costly as the voluntary administration process (Part 5.3A of the Corporations Act), a lot more flexible, quick to implement, knocks out unexpired director penalty notices and leaves the Director in control of the business at all times, just to mention a few benefits. I’ve done a fair bit of turnaround work over my 30 years in the restructuring and insolvency profession. I’m a big subscriber to the safe harbour restructuring legislation, and now a subscriber of SBRL. If you are not up to speed on the SBRL, see the below fact sheet. If you believe the SBRL may be useful to you if a director or your client, if an adviser, give Shaw Gidley a call.
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