Transcript

We're going to take a look at who is eligible for small business restructuring. At a high level, it's in the name: it's small businesses. 

The way that small businesses are defined for the purposes of small business restructuring are businesses with debts of less than $1 million. And when we're calculating that million dollars, we're looking at unsecured debts. 

So, we may not look at employee claims for things like annual leave and long service leave, and we're not looking at total secured debt. If you have secured creditors, you're looking at the net unsecured portion of that claim. 

If there's a lease, for instance, and a motor vehicle lease, and the vehicle is worth $50,000, and there's $60,000 worth of finance, for the purposes of calculating that million dollars, you're only looking at the $10,000 unsecured portion. 

On top of that, there are some other eligibility requirements. The company has to have paid all of its employee entitlements, so the key thing there is your superannuation guarantee charge for employees.

The company has to have complied with all of its taxation lodgment obligations. So, you need to have your tax returns and your BAS lodged and up to date, but not paid. The ATO can participate in a restructure as a creditor, and in almost every case, they are the major creditor as part of the restructuring process.