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Insolvency reforms to support small businesses start today

first_imgInsolvency reforms to support small businesses start today The Morrison Government continues to implement its economic recovery plan with the commencement of the most important changes to Australia’s insolvency framework in 30 years.From today, eligible businesses experiencing financial distress can access a new, simplified debt restructuring process that allows them to restructure their existing debts while remaining in control of their business.The reforms reposition our insolvency system to help more incorporated small businesses, with liabilities of less than $1 million, restructure and survive the economic impact of the COVID-19 recession.As the economy continues to recover, it will be critical that distressed businesses have the necessary flexibility to either restructure or to wind down their operations in an orderly manner.The reforms are designed to help keep businesses in business and more Australians in jobs.Importantly, should an eligible business not be able to immediately secure a small business restructuring practitioner to commence this new process, the business can declare its intention to access the process through a notice on ASIC’s published notices website.From the date a declaration is published, temporary relief from insolvent trading liability and responding to statutory demands from creditors applies to the business for up to 3 months. The ability to declare such an intention will be available until 31 March 2021.For those businesses that are unfortunately unable to survive the economic impacts of COVID-19 recession, a new simplified liquidation pathway will be available to allow faster and lower-cost liquidation, increasing returns for creditors and employees.Complementary measures have also been enacted to ensure the insolvency sector can respond effectively both in the short and long term to increased demand and to the needs of small business.Together, these measures will reduce costs for small businesses, reduce the time they spend in insolvency process, promote greater economic dynamism, and ultimately help more small businesses through the recovery phase of the COVID-19 recession. /Public Release. This material comes from the originating organization and may be of a point-in-time nature, edited for clarity, style and length. View in full here. Why?Well, unlike many news organisations, we have no sponsors, no corporate or ideological interests. We don’t put up a paywall – we believe in free access to information of public interest. Media ownership in Australia is one of the most concentrated in the world (Learn more). Since the trend of consolidation is and has historically been upward, fewer and fewer individuals or organizations control increasing shares of the mass media in our country. According to independent assessment, about 98% of the media sector is held by three conglomerates. This tendency is not only totally unacceptable, but also to a degree frightening). Learn more hereWe endeavour to provide the community with real-time access to true unfiltered news firsthand from primary sources. It is a bumpy road with all sorties of difficulties. We can only achieve this goal together. Our website is open to any citizen journalists and organizations who want to contribute, publish high-quality insights or send media releases to improve public access to impartial information. You and we have the right to know, learn, read, hear what and how we deem appropriate.Your support is greatly appreciated. All donations are kept completely private and confidential.Thank you in advance!Tags:ASIC, AusPol, Australia, Australian Treasury, business, coronavirus, covid-19, Economy, Government, Impact, jobs, Morrison, Morrison Government, recession, Small Business, websitelast_img read more