Meaningful support for your clients

As a dedicated professional, we appreciate you’re always looking out for your clients.

The new debtor-in-possession insolvency reforms mean that business clients have more options to solve or curtail difficult financial circumstances. COVID-19’s economic impact has forced insolvency laws to change, and for the better. Business clients facing difficult decisions need their trusted advisors to guide them in the right direction to get meaningful support, often when clients aren’t fully aware of their need or level of vulnerability.

Approved small business restructuring practitioners.
Registered liquidators.

Worrells is available Australia wide

Fast, cost effective options

New solutions for companies with liabilities up to $1m

Connect with a local Worrells partner

Worrells has supported thousands of professional accounting, legal, and professional services practices for over 48 years by listening to their clients’ circumstances and developing pathways to solve unique challenges.

We talk with business owners and their advisors every day. Find out why Worrells is best positioned to support your clients: click here.

Insolvency laws have changed, for the better

The COVID-19 economic environment is both tough and confusing for many small businesses and the government has made changes to allow companies to restructure debt more easily to weather the storm—and keep the control with directors/owners.

Do these new laws apply to my client (click here)?

If the writing is on the wall and closing the business is the way to go, the new insolvency legislation offers a more straight forward way for businesses to wind up, with less costs.

OPTION 1

Debt Restructure

  • Helping owners look at company debts & negotiating an easier pay back plan
  • A small business restructuring practitioner, dealing with creditors to agree on delayed payments, reduced payments or debt 
  • Working with the ATO to negotiate a payment plan that gives your clients breathing space to rebuild
OPTION 2

Wind up

  • A lower cost option than the standard liquidation process
  • A faster way to wind up a client’s company with less burden on the owner
  • More certainty in the liquidation process, giving your clients assurance before they go ahead with simplified liquidation

Eliminate the hurdles of uncertainty with qualified, expert advice from the team that care.

  • Approved small business restructuring practitioners. Registered liquidators 
  • Worrells is available Australia wide
  • Fast, cost effective options
  • New solutions for companies with liabilities up to $1m (what if I’m not eligible?)

Knowing when to make the call for help

Small business owners are resilient and independent by nature, so that makes it tricky for them to see when they need a helping hand to change their situation or likely trajectory.

There’s some critical signs that you should look out for.

5 signals that indicate
business stress

  1. Falling behind on payments and lodgments of tax obligations
  2. Non-urgent creditors not being paid on time e.g. superannuation
  3. Overdue creditors—landlords, trade creditors
  4. More reliant on credit facilities e.g. overdraft
  5. Higher staff turnover; unhappy management team

Early intervention matters

It’s universally true that the earlier people seek help the more options they have to adapt.

Plain talk, straight answers and here to help

We’ve been around the block, specialising in insolvency since 1973. It’s what we live and breathe every day. We use plain talk to explain what can be a complex process and create a supportive environment during these stressful conversations.

Understanding and applying this new insolvency reform is a bit like a game of Jenga. Only practitioners previously experienced in insolvency understand how each piece impacts another.

Downloads

Want to understand more about what changed and how it can help your client’s business?

FAQs

Not quite sure what this reform is really all about? We’ve got plenty to share on it:

What's the criteria for a simplified liquidation?

Should the company meet certain eligibility criteria, the liquidator may adopt the simplified liquidation process rather than the existing approach.

The criteria are:

  • the company has passed, a special resolution that the company be wound up voluntarily;
  • the directors give the liquidator a report concerning the company’s affairs and a declaration that the company will be eligible for the simplified liquidation process;
  • the company is insolvent;
  • the company’s total liabilities do not exceed $1 million;
  • no director has been a director of a company that has previously used the simplified liquidation process or a debt restructuring process; and
  • the company’s tax lodgments are up to date.

What's the criteria for a small business restructure?

The main criteria are:

  • the company’s total liabilities do not exceed $1 million (liability is taken to mean any liability or obligation, including contingent debts);
  • no director has been a director of a company that has previously used the simplified liquidation process or a debt restructuring process; and
  • the company’s tax lodgements are up to date.

What if I'm not eligible?

The team at Worrells will work with you to map out the best course of action for you. Speak to an expert to get tailored advice based on your client’s situation.

What's our role in all of this?

In an effort to reduce costs associated with the insolvency process for small businesses, the debtor-in-possession model introduces a new a classification of insolvency advisor called a Small Business Restructuring Practitioner (SBRP), charged with administering the restructuring of a company.

All registered liquidators are automatically Small Business Restructuring Practitioners (SBRPs). Worrells has 29 registered liquidators/SBRPs across Australia.

Providing appropriate advice regarding a distressed business requires a specialised skill set and knowledge that is acquired through years of education and experience.

Furthermore, registered liquidators operate in a highly regulated environment and are subject to strict professional standards, accountability and ethics, unlike many “advisors” in the unregulated pre-insolvency market.

While SMEs may appear to have simplified affairs, in order to achieve a successful outcome in any business turnaround process, it is important for those managing that process to have the correct expertise, a well-planned and articulated strategy, and the ability to support all key stakeholders.

Read the full article

What has changed in liquidations?

If the company is eligible, a simplified liquidation appointment is different to standard liquidation appointment through:

  • Reduced investigation and reporting requirements. The requirement to provide a report on offences to the Australian Securities and Investments Commission (ASIC) is removed.
  • Reduced meetings. The obligation for liquidators to convene meetings is removed.
  • Removed Committees of Inspections. Creditors may no longer appoint a committee of inspection, which is currently used to advise and assist the external administrator and can approve and request certain aspects of the liquidation process.
  • No Reviewing Liquidators. Creditors may no longer appoint a reviewing liquidator to review the incumbent’s remuneration.
  • Fewer voidable transactions. The liquidator cannot clawback unfair preference payments from creditors not related to the company.
  • Simplified dividend process. The process of creditors lodging a claim (proof of debt) and dividend payment is simplified.

What if the company is solvent?

If the company is solvent, meaning it can pay its debt when they fall due, then the simplified liquidation pathway is not available.

Solvent companies can be wound up by its members via a members’ voluntary winding up. Contact Worrells to get more information about this process.

We’ll navigate the tough times for your clients

Saying it’s been a hard 12 months for small business owners and their advisors is an understatement.

Now’s the time to get the right insolvency professional in your corner—an advisor who provides qualified and experienced advice during the stress of insolvency and indecision.

We’re here to help

Chat to your local partner today.

Help is here

It’s easy to get in touch with one of our experts who are here to help during the tough times.

Looking after mental health

Facing financial distress is a crushing experience that creates hardship on a personal level. It’s not easy.

Being an advisor who feels they have the burden of discovering and then demonstrating the level of financial distress to their client is also very difficult. Having insolvency practitioners that are qualified to assist helps. Our vast experience helps to assure clients by sharing how we’ve helped many other people in similar circumstances to theirs. It costs nothing to you or your client to get our initial advice. We’ll meet with you together with your client to go through the position and explain the options. Sometimes that conversation is enough shift perspectives and create support both professionally and personally.

Be aware and proactive about your client’s mental health, so they can get out the other side of these challenges.

Offer help if they need it.

Remind your clients they can chat to their doctor or reach out to Beyond Blue or Lifeline if they need help.

×