Submission: Consequential amendments to small business insolvency reforms
06/05/2021
ARITA has made a submission to The Treasury's consultation on proposed consequential amendments to small business restructuring and the simplified liquidation processes that commenced on 1 January this year.
The submission raised a number of concerns in respect of the draft amendments as well as a list of substantive concerns that still remain unaddressed:
- clarify the effect of part period tax lodgements on simplified liquidation eligibility
- the fact that the issue with the use of proposals without meetings remains largely unfixed
- that there need to be specific conditions under the law on those registered to only do small business restructuring administrations
- automatic stays on winding applications on foot at the time of appointment of a restructuring practitioner
- resolution of the tensions in the role of a restructuring practitioner
- correcting s 468 to exclude transactions in the ordinary course of business from voidable transactions in the event that the company is wound up by the court
- prevent the off-set of bank account funds in small business restructuring
- resolve legislative requirements that conflict with the debtor-in-possession model of small business restructuring
- remove the requirement for tax clearances in simplified liquidations
- include consequences for incorrect eligibility declarations in simplified liquidations, and
- simplify the remuneration approval process for simplified liquidations by increasing the statutory fee.
ARITA also acknowledged the government's announcement regarding upcoming consultation on how trusts are treated under insolvency law. ARITA has been raising our concerns about trusts and insolvency for many years and we welcome the chance to consult.
Read ARITA's submission