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The Federal Government recently passed new laws that allow directors of financially distressed businesses a new 'safe harbour' to turn around their business free of the worry of being personally pursued for insolvent trading actions. But there are important steps you must take to protect yourself as well as giving your business the best chance to return to profitability.
What steps you will need to take
You can't get the protection of a safe harbour unless you've got your books, records and some key liabilities in order. This is vital because unless you know where your money is coming from or going to, you can't really have a plan to solve the problems your business is facing.
It's also vital to understand where your debts may be and how much you really owe, including tax debts, and this is important in understanding if your business is actually viable or insolvent. You must also ensure that you have fully paid employee entitlement obligations, including super, and be up to date on your tax reporting.
The law may deny you the safe harbour if you don't get advice from an appropriately qualified adviser. Because they are also experts in turning around and restructuring businesses of all sizes, they can help you understand your financial position, your options and help you set a path forward. The sooner you seek expert advice, the more options you are likely to have.
Professional advice about your options if you are actually insolvent can save you money in the long run. It's vitally important that you don't go to dodgy advisers that promise things that seem too good to be true.
Unfortunately, there's a lot of that type of advice out there and it's unregulated.
So you've got your financial records up to date, you've taken advice from your qualified adviser and now you must make a decision about where to go from here.
The law now says you've got to decide if what you're about to do is 'reasonably likely to lead to a better outcome for the company' than if it had entered into voluntary administration or liquidation
You must have a properly documented restructuring plan for your company. It's important that is documented; not just for you to be able to check off that you are following the plan, but also if the turnaround doesn't work, this gives a future liquidator comfort that the steps you took (even if they failed) had merit and the right intent. It will help make sure you are protected. A restructuring plan doesn't need to be long or complex.
As long as it has clear, sensible and customised steps to getting your business back to financial health and, importantly, as long as you follow the plan.
Have a confidential discussion with one of our experienced advisors to assess your situation. This can be done by phone, net meeting or in person. It is up to you.
Once we get a clearer picture of your situation, we can advise you of the best course of action to suit your needs and requirements so that you can get your life back and move forward.
Look at your options and see what makes the BEST SENSE FOR YOU.
DAB Advisory will advise you of the best course of action to take to get you back in control
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