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We were recently referred a client which had a business in financial difficulty. The business was about to cease trading and only had two material debts, a large debt to a related party and a lease debt. The company’s premises lease had 7 years to run and rent for the premises was around $800,000 a year. The directors of the company had not signed personal guarantees for the lease however, there was a rental bond of three months’ rent....
Directors who have had a company go into liquidation, or individuals who have become bankrupt, frequently assume their days of running a business are over. In most cases, that assumption is wrong — but the rules differ significantly depending on whether you're talking about company liquidation or personal bankruptcy, and both come with important exceptions....
Small Business Restructuring (SBR) was introduced in 2021 to assist small business in financial difficulty settle debts which they owe. SBR allows a small business to propose a Plan to creditors to restructure its debts while the directors remain in control of the business....