The Commonwealth government has announced proposed changes to the one-size-fits-all arrangements which are designed specifically for “small businesses”. The arrangements have not yet come into place and are still before the Commonwealth Parliament and otherwise in draft form. The key changes which relate to new restructuring and liquidation arrangements are due to come into effect on 1 January 2021.
The key changes are made through amendments to the Corporations Act, the Corporations Regulations and the insolvency practice rules. The regulations and the proposed amended rules have only been released in draft for consultation. They like the relevant amending legislation may be subject to change.
The proposed changes discussed are:
1. the establishment of a new restructuring process available to companies which meet the eligibility criteria
2. the implementation of a moratorium on claims and against companies undergoing restructuring
3. the establishment of a new liquidation process for eligible companies.
The Small Business Restructuring and Liquidation Reforms
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