How Voluntary Administration Can Assist Your Company
Companies experience financial difficulties all the time and particularly now with COVID 19 business owners need to be aware of their options if they suspect their company may be insolvent. Instead of closing your business permanently and placing it into liquidation, business owners should consider other available options such as a small business restructure or voluntary administration.
With a small business restructure (SBR), the company can appoint a restructuring expert to help put a plan to your creditors to restructure the business. Typically this will involve seeking a reduction in the debt owed to your creditors.
Similarly with a voluntary administration (VA), the company can appoint a voluntary administrator to help put forward a plan to your creditors to restructure the business.
The main difference between the 2 options is that the voluntary administrator will take control of the business whilst the VA process is in place, whereas with a SBR, the director of the company will remain in control whilst the restricting plan is being put in place.
If accepted by creditors both options will achieve the same outcome of a reduction in the debt owed to your creditors.
For more information about how this can pertain to your company, reach out to Insolvency Services Australia. Give us a call at 1800 003 883 or visit our website for more information or to schedule a consultation for your specific situation.