TL;DR: Unlike voluntary administration or liquidation, Small Business Restructuring lets directors retain full control of operations. You continue managing staff, customers, and bank accounts. The restructuring practitioner handles the plan — not your business. ASIC Report 810 shows 87% plan approval rate and 93% of companies still trading post-SBR.
One of the biggest fears business owners have about any insolvency process is losing control of their business. Will someone else take over? Will I be locked out?
With Small Business Restructuring, the answer is clear: you stay in control.
Here’s exactly what that means in practice.
Directors Remain in Control During SBR
Unlike voluntary administration (where an external administrator takes over) or liquidation (where the business stops trading), SBR keeps you in the driver’s seat.
As a director, you continue to:
- Make day-to-day business decisions
- Manage staff and operations
- Deal with customers and suppliers
- Access company bank accounts
- Sign contracts and quotes
- Run the business as you normally would
The restructuring practitioner is there to help you, not replace you.
What the SBR Restructuring Practitioner Does
The practitioner’s role during SBR is specific and limited:
During the Restructuring Phase (20 business days)
- Investigates your company’s affairs
- Helps develop the restructuring plan
- Ensures the plan is fair and reasonable
- Communicates with creditors
- Lodges required documents with ASIC
During Plan Administration (up to 3 years)
- Collects your plan payments
- Distributes funds to creditors
- Monitors compliance with the plan
- Reports to ASIC
They’re not there to run your business. They’re there to manage the restructuring process.
What Changes in Your Business During SBR?
While you stay in control, some things do change:
1. Creditor Enforcement Stops
This is actually good news. Once you appoint a restructuring practitioner:
- Creditors can’t pursue enforcement action
- Existing garnishee notices pause
- Legal proceedings are stayed
- The pressure from debt collectors stops
This breathing room lets you focus on running your business.
2. Some Transactions Need Approval
During the restructuring period, certain transactions require the practitioner’s consent:
- Paying existing debts (pre-appointment debts)
- Disposing of significant assets
- Giving security over company property
Normal trading expenses (paying suppliers for new goods, wages, rent) continue as usual.
3. You’ll Spend Time on the Process
Developing a restructuring plan requires your input:
- Providing financial information
- Discussing the business’s future
- Agreeing on what the company can afford to pay
- Reviewing the proposed plan
Expect to spend several hours over the 20-day restructuring period working with your practitioner. But this shouldn’t significantly disrupt operations.
4. Creditors Are Notified
Your creditors will know you’re undertaking SBR. The practitioner notifies them, and they’ll receive the plan for voting.
For most businesses, this isn’t a major issue. Many creditors (including the ATO) are supportive of SBR because they typically receive more than they would in liquidation.
Practical Tips for Managing Operations During SBR
Here are practical tips for running your business during restructuring:
Keep Trading Normally
Continue serving customers, fulfilling orders, and maintaining relationships. Your business needs to demonstrate it’s viable for the plan to succeed.
Pay Current Expenses
Keep paying your ongoing expenses — wages, rent, utilities, supplier COD payments. These aren’t affected by the restructuring.
Communicate with Key Suppliers
If you have critical suppliers, consider letting them know you’re restructuring. Many will continue supply, especially if you’ve been a good customer and are paying current invoices.
Focus on Cash Flow
The better your cash flow during restructuring, the stronger your plan will be. Focus on collecting receivables and managing expenses.
Don’t Make Major Changes
Avoid major business changes during the 35-day process — selling assets, closing locations, or major staff changes. These can complicate the restructuring.
Document Everything
Keep good records of all transactions during the restructuring period. Your practitioner will need these.
Employee Rights and Payroll During SBR
Your employees can continue working normally. You should:
- Pay their wages on time (this continues as usual)
- Pay superannuation when due
- Keep them informed if appropriate
- Maintain normal employment conditions
Employee entitlements are protected in SBR. In fact, employee debts must be paid in full — they can’t be reduced through the restructuring plan.
Do Customers Need to Know About SBR?
Your customers don’t need to know you’re in SBR unless you choose to tell them. You can:
- Continue fulfilling existing contracts
- Accept new work and orders
- Invoice and collect payment normally
- Provide warranties and guarantees
Many businesses complete SBR without customers ever knowing.
How SBR Affects Existing Contracts and Leases
Existing contracts generally continue:
- Supplier agreements remain in place
- Lease agreements continue
- Customer contracts are maintained
- Service agreements persist
However, be aware that some contracts have “ipso facto” clauses that allow termination if a company enters an insolvency process. Review critical contracts if you’re concerned.
Common Mistakes to Avoid During SBR
During SBR, don’t:
Pay Pre-Appointment Debts Without Approval
Those old supplier invoices or that ATO debt? Don’t pay them without the practitioner’s consent. They’re covered by the plan.
Take on Significant New Debt
Avoid taking on major new borrowings during restructuring. It could complicate the plan and raise questions about your intentions.
Dispose of Assets
Don’t sell business assets without approval. Asset sales during restructuring need to be managed carefully.
Hide Information
Be completely transparent with your practitioner. Hiding debts, assets, or information can derail your restructuring and create legal issues.
Prefer Certain Creditors
Don’t pay some pre-appointment creditors while others wait. All unsecured creditors should be treated equally through the plan.
What Happens After Your SBR Plan Is Approved
Once your restructuring plan is approved by creditors (which happens 87% of the time), you enter the plan administration phase.
During this phase:
- You continue running your business exactly as before
- You make agreed payments to the practitioner
- The practitioner distributes funds to creditors
- Life largely returns to normal
When the plan is complete (all payments made), the remaining debts are released and you’re free of them forever.
The Bottom Line
SBR was specifically designed to let business owners stay in control. The government recognised that small business owners know their businesses best and shouldn’t be pushed aside during restructuring.
If you’re worried about losing control of your business, SBR addresses that concern directly. You run the business. The practitioner runs the restructuring process.
It’s a partnership designed to save viable businesses — with you at the helm throughout.
Related Articles
What Happens to My Employees During SBR?
Are employee wages and super protected during SBR? Yes — all entitlements must be paid in full. 93% of SBR companies keep trading and jobs are preserved.
SBR GuideHow Much Does SBR Cost? A Complete Breakdown
How much does SBR cost? ASIC data shows median practitioner fee of $16,137 plus $6,739 plan fee. Total SBR cost is $15K-$30K — far less than voluntary administration at $50K+.
SBR GuideSBR Explained: The Government Process That Could Save Your Business
What is Small Business Restructuring (SBR)? A government-backed process letting eligible Pty Ltd companies reduce debt by 60-80% while directors stay in control. 87% plan approval rate.
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