The Government has introduced the Corporations Amendment (Corporate Insolvency Reforms) Bill 2020 into the House of Representatives. Background.

The Bill will implement the insolvency reforms to support small business announced by the Government on 24 September 2020.

UPDATE December 2020: Bill passed.

The Bill:

• creates a debt restructuring process for eligible small companies from 1 January 2021;
• provides temporary relief for eligible companies seeking to enter the new formal debt restructuring process;
• creates a simplified liquidation process for a creditors’ voluntary winding up of an insolvent company and amends the Insolvency Practice Schedule to refine the registration requirements for a liquidator from 1 January 2021;
• expands the situations where documents relating to the external administration of a company may be given electronically from the date of Royal Assent. It also allows documents relating to the external administration of a company to be signed electronically.

UPDATE: Treasury has released Exposure Drafts of the Corporations Amendment (Corporate Insolvency Reforms) Regulations 2020 (Draft Regulations) and Insolvency Practice Rules (Corporations) Amendment (Corporate Insolvency Reforms) Rules 2020.

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Author: David Jacobson
Principal, Bright Corporate Law
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The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.