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Superannuation as an employee entitlement under the National Employment Standards
From 1 January 2024, superannuation will be introduced as an employee entitlement under the National Employment Standards (NES). This means that all eligible employees have a right to superannuation contributions from their employer, regardless of whether they are covered by an award or enterprise agreement.
Shadow and De Facto Directors: A Guide for Accountants and Other Professionals
As an insolvency practitioner, I occasionally see the impact that shadow and de facto directors can have on companies. These individuals, who are not formally appointed as directors, can often exercise a significant amount of control over a company’s affairs and participate in the day-to-day operations of a corporation.
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The small business restructuring regime commenced on 1 January 2021, partly in response to the challenges put on small businesses as a result of the COVID-19 pandemic and the resultant expected increase in insolvency activity, and also in recognition of the need to introduce a formal restructuring procedure for small and medium enterprises (SMEs), which make up the vast majority of businesses in Australia.
The restructuring process enables eligible companies and their directors to –
- Retain control of their business, property and affairs whilst it develops a plan to restructure its affairs with the assistance of a Small Business Restructuring Practitioner (SBRP); and
- Enter into a restructuring plan with its creditors to avoid liquidation.
At HLB Mann Judd Insolvency, both Kim Wallman and Greg Quin are Registered Liquidators and meet the requirements to practice as a SBRP. Kim and Greg are well placed to assist directors of SMEs with understanding the small business restructuring process.
The eligibility criteria for a company to enter into a small business restructuring plan with its creditors are as follows –
- The company must have liabilities of less than $1M when the SBRP is appointed
- The company must have all of its employee entitlements paid up to date (including superannuation)
- The company must have all of its taxation lodgements up to date
- No person who is a director of the company can have been involved with another company that has used the small business restructuring process in the 7 years immediately preceding the appointment of the SBRP
- The company must not have been subject to a small business restructuring plan or simplified liquidation in the 7 years immediately preceding the appointment of the SBRP
Once the SBRP is appointed, the directors have 20 business days to formalise their restructuring plan so that the SBRP can comminute its merits to creditors in the form of a report, which contains details of the plan, its terms and the company’s restructuring proposal statement. The SBRP is required to provide a declaration regarding whether or not the plan should be accepted by creditors.
Creditors then have 15 business days to consider the proposal and the vote on its acceptance or otherwise by returning forms to the SBRP.
If the plan is accepted by creditors, the company carries on and meets it obligations under the terms of the plan. The SBRP has an oversight role in this phase and pays dividends to creditors in accordance with the plan.
If the plan is not accepted by creditors, the company also carries on, but may consider entering into a simplified liquidation appointment, voluntary administration, creditors’ voluntary liquidation, or may just continue on until a creditor takes action to petition to wind up the company in the courts.
To speak with us further regarding whether Small Business Restructuring may be appropriate in your situation, please contact us on 08 9215 7900 for a cost and obligation free consultation.
