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How SBR runs
| Stage | What happens |
|---|---|
| Eligibility check | Liabilities under $1m excluding employee entitlements, the company insolvent or likely to become so, no recent use of SBR or simplified liquidation, plus the two gates below |
| Gate 1: employee entitlements paid | Super must be current. Outstanding super guarantee charge has to be dealt with before a plan can be put |
| Gate 2: tax lodgments substantially up to date | Returns and BAS lodged - the same precondition as safe harbour and director penalty protection. The catch-up is the doorway to every rescue mechanism at once |
| Appointment | A small business restructuring practitioner is appointed and a moratorium holds most creditor action, including winding-up moves, while the plan is built |
| The plan (20 business days) | A single-pot proposal, typically a lump sum or contributions over up to three years, funded by trading, director contributions or asset sales, offering creditors more than liquidation would |
| The vote (15 business days) | Creditors accept by majority in value, and the ATO usually is that majority. Its published stance has been constructive toward genuine, viable proposals with honest books |
| Performance | Plan paid means residual admitted debts are released and the company continues clean. Plan failed usually means liquidation, with the SBR file as the record |
Is SBR your tool? The honest triage
SBR fits genuinely viable operations where the debt is historical and current trading washes its face, and where the problem is the accumulated ATO stack under the $1 million line.
SBR does not fit businesses still trading at a loss, because a plan funded by losses fails expensively. It does not fit liabilities over $1 million, where voluntary administration is the bigger sibling. And it does not fit debt that is really one negotiable component, where remission plus a payment plan achieves the compromise without a formal appointment.
Frequently asked questions
What is small business restructuring?
Will the ATO accept cents in the dollar?
What are the eligibility requirements?
Do I lose control of my company in SBR?
What if the plan is voted down or fails?
General information only - not personal tax, financial or legal advice. Consider your own circumstances or speak to a registered tax agent. Remission of penalties or interest and payment plans are decisions of the ATO and outcomes can't be guaranteed.