And keep their doors open

must be a company incorporated under the Corporations Act, insolvent, or likely to become insolvent with unsecured creditors of less than $1m.

Employee entitlements must be up to date and all lodgements with the ATO must also be up to date.

There is also a requirement that directors must not have had other companies enter certain external administration in the past seven years.

The SBR process involves the appointment of a SBR practitioner who works closely with the director to develop a restructuring plan to creditors to pay off their liabilities, in full or in part over a maximum period of three years, which is sent to creditors to vote on.

A plan is accepted if more than 50 per cent of the creditors by value that vote accept the plan and, if accepted, the SBR practitioner will distribute funds according to the plan. After distribution, the company is released from past debts covered by the plan and can successfully trade into the future.

If a distressed small business does not presently qualify, directors need to create the breathing space to qualify by working quickly to get up to date with lodgements and paying superannuation and employee debts.

The SBR regime is very well suited to small businesses in Tasmania and will continue to be increased in scope as more people become aware of the financial benefits.

The many benefits of SBR include; directors stay in control of the business; the company can continue to trade; the process is fast with creditors required to vote within 35 business days; and debt is permanently written off.

For more information on SBR, speak to your accountant, lawyer or contact a registered practitioner.