Frequently Asked Questions

SBR is a restructuring process designed to keep viable businesses trading, while liquidation winds the company up and sells its assets. Voluntary Administration is also a restructuring pathway, but it hands control to an administrator, applies to companies of any size, and is typically more complex and costly. SBR was purpose-built for small businesses (under $1 million in liabilities), keeps directors in control, and moves faster than VA. For eligible companies, SBR is often the most appropriate middle ground between doing nothing and winding up.

SBR is a company-level process, so it restructures company debts rather than personal ones. However, entering SBR is a recognised response to Director Penalty Notices (DPNs) that can reduce personal liability exposure depending on the type of DPN and when it was issued. Personal guarantees you’ve signed for supplier or bank debts remain separate obligations. An SBR-experienced lawyer can assess your personal exposure alongside the company restructure during your free consultation.

If creditors vote against the plan, the SBR process ends and the company returns to its pre-SBR status. At that point, directors can consider alternative pathways — such as Voluntary Administration, simplified liquidation, or a renegotiated arrangement with creditors. Because a well-structured plan takes creditor interests into account from the outset, outright rejection is less common when the proposal is realistic and properly prepared.

The ATO is treated as an unsecured creditor in the SBR process and votes on the restructuring plan alongside other unsecured creditors. The plan can propose compromised settlement of ATO debts — including GST, PAYG, and income tax — on terms agreed by creditors. Outcomes depend on the specifics of your plan and the ATO’s view of it, which is why having an experienced practitioner guide the proposal matters significantly.

Yes. One of the defining features of SBR is that directors remain in control and the business continues trading throughout the process. Unlike Voluntary Administration, where an administrator takes over, under SBR you run day-to-day operations while your SBRP works with you on the restructuring plan. This is specifically designed for businesses that are viable but weighed down by debt.

Entering SBR does trigger some public disclosure requirements — the appointment is recorded on the ASIC register, and affected creditors must be notified so they can vote on the plan. However, SBR is designed to allow the business to keep trading, so day-to-day operations with staff and customers typically continue as normal. Many directors find the disclosure is less disruptive than they feared, especially compared to the stigma of liquidation. Your SBRP can walk you through exactly who needs to be notified and when.

The formal SBR process moves relatively quickly. Once a Small Business Restructuring Practitioner (SBRP) is appointed, they have 20 business days to develop the restructuring plan with you. Creditors then have 15 business days to vote on the plan. If accepted, the plan is implemented immediately and the restructuring period ends. Most eligible businesses complete the core SBR process within 8 to 10 weeks from appointment.

SBR is one of the most affordable formal restructuring options available under the Corporations Act, specifically designed to be cost-effective for small businesses. Fees vary based on the complexity of your situation and the practitioner appointed, but SBR is typically a fraction of the cost of Voluntary Administration. We provide a clear fee breakdown during your free eligibility assessment before any commitment is made.