Small Business Restructuring Eligibility Checker
Small Business Restructuring can be a faster, cheaper path than voluntary administration, but only companies that meet a specific set of criteria can use it. Answer six plain-English questions and get a clear read on whether your company is likely eligible, with the specific reasons behind the result either way.
This tool gives a general indication only. It is not legal or financial advice and does not cover every provision or exception in the Corporations Act 2001. Eligibility must be reassessed on the actual day a restructuring practitioner is appointed, since circumstances can change. Only a person registered with ASIC as a registered liquidator can act as a restructuring practitioner. Speak with a registered liquidator, accountant, or financial counsellor before acting. See ASIC's guidance on small business restructuring.
- 2. Is the company currently under restructuring, subject to an unterminated restructuring plan, under administration, subject to an unterminated deed of company arrangement, or does it have a liquidator, provisional liquidator, or administrator appointed right now?
- 3. Has this company itself gone through restructuring or a simplified liquidation process in the last 7 years?A narrow exemption can apply if this involved a related body corporate within 20 business days of this restructuring — a registered liquidator can confirm if it applies to you.
- 4. Has any current director — or anyone who was a director in the last 12 months — also been a director of a different company that went through restructuring or simplified liquidation in the last 7 years?The same related-body-corporate exemption noted above can apply here too.
- 5. Are the directors prepared to resolve that the company is insolvent, or is likely to become insolvent at some future time?This is a required legal step before a practitioner can be appointed, not a bad sign — most directors using this process answer yes.
- 6. Are current employee entitlements paid up to date, and are tax lodgments (BAS, returns, etc.) up to date?This does not affect eligibility to appoint a practitioner — it only affects when a plan can be proposed to creditors.
How this works
A company is only eligible for restructuring on the day a restructuring practitioner is appointed if all four of the following hold: total liabilities do not exceed $1,000,000; the company is not already under restructuring or another form of external administration; the company itself has not been through restructuring or a simplified liquidation process in the last 7 years; and no current director, or director in the last 12 months, has also directed a different company through restructuring or simplified liquidation in the last 7 years. A narrow regulatory exemption can apply to the last two criteria where the other company is a related body corporate whose restructuring or simplified liquidation began no more than 20 business days before this company's restructuring — a registered liquidator can confirm whether it applies to you.
Two further things matter but do not affect eligibility itself. First, directors must be prepared to formally resolve that the company is insolvent or likely to become insolvent — this is a required legal step to appoint a practitioner, not a warning sign. Second, before a restructuring plan can actually be put to creditors, the company generally needs to have paid current employee entitlements and lodged (though not necessarily paid) outstanding tax returns, BAS, and other statements. A company that is not yet there can still appoint a practitioner and work toward it.
What your result means
A "likely eligible" result means your answers did not trip any of the four hard eligibility criteria — it is a starting point for a conversation with a registered liquidator, not a guarantee, since eligibility is only confirmed on the actual day a practitioner is appointed. A "likely not eligible" result explains exactly which criterion is the problem. If it is the $1,000,000 liability cap, voluntary administration or a deed of company arrangement are worth discussing with a registered liquidator instead. If it is the company or director history criteria, ask a registered liquidator whether the related-body- corporate exemption might apply to your situation before ruling it out. Either way, the sooner you have this conversation, the more options are usually on the table.
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