SBR Glossary

An 11-digit identifier issued by the Australian Business Register. All companies have an ABN linked to their ACN. Used for tax and business identification purposes.

A unique nine-digit number assigned by ASIC to every registered company in Australia. Used to identify companies in ASIC records, including insolvency appointments.

Australia's corporate regulator responsible for overseeing companies, financial services, and insolvency practitioners. ASIC maintains the register of insolvency appointments and publishes insolvency statistics.

The process by which creditors vote to accept or reject a restructuring plan. In SBR, creditors have 15 business days to vote. The plan is approved if a majority by value of creditors voting approve it. Creditors who don't vote are not counted.

When directors and shareholders of an insolvent company resolve to wind up the company and appoint a liquidator. The company ceases trading and its assets are sold to pay creditors. Unlike SBR, the business does not continue.

A binding agreement between a company and its creditors that results from voluntary administration. Sets out how the company's affairs will be dealt with. Similar concept to an SBR plan but arises from VA rather than SBR, and typically involves higher costs.

A notice issued by the ATO to company directors making them personally liable for unpaid PAYE withholding, superannuation guarantee charge, or GST. Directors have 21 days to respond. SBR appointment within this window can be part of a protective response strategy.

A company that meets the requirements for SBR: total liabilities must not exceed $1 million (excluding employee entitlements), tax lodgements must be substantially up to date, the company must not have used SBR in the previous 7 years, and no director can have been a director of another company that used SBR in the previous 7 years.

The ASIC form used to notify the appointment of a restructuring practitioner. Must be lodged within one business day of appointment. This lodgement creates the public record used in ASIC insolvency statistics.

The ASIC form used to notify the outcome of creditor voting on a restructuring plan. Records whether the plan was accepted or rejected.

A notice issued by the ATO (or other creditor) to a third party (such as a bank) directing them to pay money owed to the debtor company directly to the ATO instead. Can freeze bank accounts and disrupt business operations.

Interest charged by the ATO on unpaid tax debts. Accrues daily on outstanding balances. From 1 July 2025, GIC is no longer tax-deductible, increasing the effective cost of carrying ATO debt.

When a company incurs debts while insolvent (unable to pay debts as they fall due). Directors can be personally liable for debts incurred during insolvent trading under Section 588G of the Corporations Act, unless a defence such as safe harbour applies.

A period during which creditors are prevented from taking enforcement action against the company. In SBR, the moratorium begins when the restructuring practitioner is appointed and generally continues while the plan is being developed and voted on.

The section of the Corporations Act 2001 that governs the Small Business Restructuring process. Inserted by the Corporations Amendment (Corporate Insolvency Reforms) Act 2020.

An arrangement with the ATO to pay outstanding tax debts in instalments over time. Often the first option businesses try before considering SBR. GIC continues to accrue on the outstanding balance during the payment plan.

A person registered with ASIC to act as a liquidator, voluntary administrator, or restructuring practitioner. Must meet ASIC's registration requirements including qualifications, experience, and insurance.

The formal proposal put to creditors detailing how the company's debts will be dealt with. Must provide creditors a better outcome than liquidation. Creditors vote on the plan within 15 business days. If approved, payments typically run for up to 3 years.

A registered liquidator appointed by directors to oversee the SBR process. They assess the company's financial position, prepare a restructuring plan, and administer the plan if approved by creditors. Must be registered with ASIC.

A legal protection under Section 588GA of the Corporations Act that can shield directors from personal liability for insolvent trading, provided they are taking a course of action reasonably likely to lead to a better outcome for the company. Can apply alongside or before SBR.

A streamlined winding-up process for small companies with liabilities under $1 million (same threshold as SBR). Unlike SBR, the company ceases to exist. Introduced alongside SBR in January 2021.

A formal insolvency process under Part 5.3B of the Corporations Act 2001 that allows eligible companies with liabilities under $1 million to restructure their debts while directors retain control of the business. Introduced on 1 January 2021.

A formal written demand by a creditor requiring a company to pay a debt of $4,000 or more within 21 days. Failure to comply creates a presumption of insolvency that can be used to support a winding-up application.

A charge imposed on employers who fail to pay the minimum superannuation for employees on time. SGC debts can be included in an SBR plan. The SGC includes the unpaid super plus interest and an administration fee.

A formal insolvency process under Part 5.3A of the Corporations Act where an external administrator takes control of the company to investigate its affairs and report to creditors. More complex and expensive than SBR, typically used for larger companies or more complicated situations.