Understanding Business Restructuring and How We Can Help
What is Business Restructuring?
Business restructuring is a process by which a business implements major changes to their operational structure in order to improve processes and adapt to the economy. Commonly, this occurs when a business is experiencing financial hardship, in order to avoid liquidation. This process allows companies to retain control of property, assets and operations while developing a plan to settle outstanding debts with its creditors. Businesses may also undergo restructuring for mergers and acquisitions, preparing for sale, if their goals have changed or when the current structure is simply no longer suitable.
Depending on the type and severity of the situation, restructuring is something that may be undertaken informally in the background, or formally as a legal procedure. When restructuring is being undertaken to save a business, there are several criteria that must be met in order to be eligible. In Australia, this includes:
- Combined liabilities of the company must not be in excess of $1 million
- No company directors (or persons whom have been a director within the 12 months prior to appointing a restructuring practitioner) have also been the director of another company that has undergone restructuring within the preceding seven year, unless exempt
- The company must not have already been restructured within the preceding seven years
Restructuring Practitioners
Restructuring practitioners provide advice and aid in the development and implementation of a restructuring plan. In addition to this, restructuring practitioners communicate with creditors on the business’s behalf regarding the restructuring plan, providing information about the business’s eligibility to undergo restructure and their capacity to adhere to the proposal.
How Wisdom Business Consultants Can Help
With over 50 years combined industry experience, our team are experts in business restructuring. Our direct service and business consulting packages offer professional, specialised and current advice to ensure your business has every chance of success.
Our business restructuring service can help to increase your business’s profit margins and improve processes so you not only survive, but thrive.
To get started, contact our friendly team here today.
References
- ASIC, ‘Restructuring and the Restructuring Plan’, ASIC (Australian Securities and Investments Commission), Online, [no date], https://asic.gov.au/regulatory-resources/insolvency/insolvency-for-directors/restructuring-and-the-restructuring-plan/ (Accessed May 13, 2022)
- Australian Government, ‘Business Restructuring’, Australian Government – Australian Taxation Office, Online, 2016, https://www.ato.gov.au/Business/Privately-owned-and-wealthy-groups/Tax-governance/Tax-governance-guide-for-privately-owned-groups/Business-expansion/Business-restructuring/ (Accessed May 13, 2022)
- Restructuring Works, ‘Company Restructuring: Everything You Need To Know (Updated 2022)’, Restructuring Works, Online, 2022, https://www.restructuringworks.com.au/definitions/company-restructuring/ (Accessed May 13, 2022)
- Twin, A. ‘Restructuring’, Investopedia, Online, 2022, https://www.investopedia.com/terms/r/restructuring.asp (Accessed May 13, 2022)
Bondy, H. ‘Business Restructuring: What Is It And How It Works’, The Balance Small Business, Online, 2021, https://www.thebalancesmb.com/what-is-business-restructuring-5119063 (Accessed May 13, 2022)
