Simplified Debt Restructuring (small business)
Small companies (<$1M liabilities) can use SDR to restructure without full external admin.
Who must comply
Small business companies in financial distress meeting eligibility tests.
What triggers it
Eligibility (under $1M liabilities, current taxes paid, no related-party debts) + financial distress.
When due
Same-day appointment of Restructuring Practitioner.
Evidence required
Form 506; creditor list; restructuring plan within 20 days.
Max penalty
n/a — protective mechanism. Eligibility breach risks falling back to full administration.
Summary
Part 5.3B Corporations Act (introduced January 2021) lets directors of small businesses (under $1M total liabilities, no related-party liabilities) retain control of the company while a Small Business Restructuring Practitioner develops a debt restructuring plan. 20-day proposal period + 15-day creditor vote.
Enforced by
Source legislation
Entity types
Topics
Source: https://asic.gov.au/regulatory-resources/insolvency/small-business-restructuring. Rules Mate is not a law firm. Always verify against the live regulator source before acting.