After acknowledging that measures to slow the spread of coronavirus could cause many otherwise profitable businesses to face financial distress, the federal government has taken unprecedented steps to provide businesses with short-term relief in the face of the crisis. These were critical, but essential, decisions to attempt to avoid the unprecedented number of insolvencies that are expected to happen in Australia over the next few months. At the very least, these changes will provide owners and directors of businesses with some breathing space to work through the impact of this crisis. In the short-term, it will prevent companies from being wound up by their creditors and will protect company directors from potential personal liability. With further measures, the federal government may provide the much-needed safety net businesses need to resume regular business activity once this crisis passes.
Key measures that have been taken to provide businesses with short-term relief that owners and directors of businesses need to know are:
These temporary reforms are now in place.
While these measures are critical to keeping strong, financially viable businesses running, they should not be used by companies that were already facing financial hardship as a means to keep the doors open.
If you are the owner or director of a business that is currently struggling due to the current crisis, the government fact sheet can be found here.
Please do not hesitate to contact us if you have any questions or wish to discuss your circumstances.
Joe De Ruvo
Director
p. +61 8 8124 1872
e. Email me
This communication provides general information which is current as at the time of production. The information contained in this communication does not constitute advice and should not be relied upon as such. Professional advice should be sought prior to any action being taken in reliance on any of the information. Should you wish to discuss any matter raised in this alert, or what it means for you, your business or your clients' businesses, please feel free to contact us.