What goes into a small business restructuring plan?
A small business restructuring (SBR) plan is the company’s offer to its creditors. The directors prepare it with the restructuring practitioner’s help, in the form ASIC approves. It must identify the company property to be dealt with and how, provide for the plan practitioner’s fee, and state the date it was signed. All admissible debts rank equally, payments must be completed within three years, and the plan can’t transfer property other than money to a creditor.
What the plan must include
- the company property to be dealt with under the plan, usually money the company will pay
- how that property is to be dealt with, such as instalments or a lump sum
- provision for the remuneration of the plan practitioner
- the date the company executed the plan.
What the plan may include
- authority for the plan practitioner to deal with the identified property as the plan specifies
- provision for any other matter relating to the company’s affairs
- a condition that a specified event happens within no more than 10 business days after the plan is accepted.
What the plan can’t do
- Transfer property other than money to a creditor. Creditors are paid in cash, not with assets.
- Pay admissible debts after three years. Payments must be completed within three years of the plan being made.
- Prefer some creditors. All admissible debts and claims rank equally. No creditor or class of creditors can be given priority.
The documents that go to creditors
| Document | Prepared by | What it does |
|---|---|---|
| Restructuring plan | The directors, with the practitioner’s help | Sets out what the company will pay and when |
| Standard terms | Prescribed by the regulations | Terms that apply to every restructuring plan |
| Restructuring proposal statement | The directors | Explains the company’s position and includes the schedule of debts and claims |
| Practitioner’s declaration | The restructuring practitioner | States whether the company is eligible, whether it is likely to be able to meet the plan, and whether the proposal statement is complete |
The directors have 20 business days from the start of the restructuring to propose the plan. The practitioner can extend this once, by up to 10 business days, at the company’s request. Creditors then generally have 15 business days to respond. See our small business restructuring guide for the full timeline.
Where the money in a plan comes from
A plan has to be paid for. Common sources are:
- Future trading profits, paid to the plan practitioner in instalments over the plan’s term
- A lump sum from the directors, a related party or another third party
- The sale of assets the business no longer needs, with the proceeds paid into the plan
The ATO asks for a cash flow forecast and its assumptions, and confirmation of any lump sum or third-party contribution, before it votes. A plan built on a realistic forecast is more likely to be supported, and more likely to be completed.
Who the plan binds
| Party | Bound by the plan? |
|---|---|
| The company, its officers and members, and the plan practitioner | Yes |
| Unsecured creditors | Yes, for their admissible debts and claims |
| Secured creditors whose security is worth less than the debt | Only for the shortfall |
| Secured creditors whose security is worth at least the debt | Only if they consent |
| Employees, for their entitlements | No. Employee entitlements are not admissible debts and are paid outside the plan |
Changing the plan
Put forward the best offer at the start. The ATO says a plan can’t be changed once voting begins. After a plan is made, it can only be varied by the court, on application by the company, an affected creditor, the plan practitioner or ASIC.
Working out what your company can offer?
We can help you build a plan around a realistic cash flow forecast and test it against what the ATO looks for. Book a free 30-minute call with Luke D’Costa, Senior Manager – Debt Strategist.
Book a free 30-minute call Sydney 02 9660 3532 · Brisbane 07 3868 1888
How the plan practitioner is paid
The plan practitioner’s remuneration must be provided for in the plan. It is set either as a percentage of the payments made to creditors under the plan or, for work on proceedings, by a method the board consents to in writing. The fee for the restructuring itself, before the plan, is set by the directors in a board resolution on or before the appointment. We explain both before you decide to proceed.
When the plan ends
When the company has met its obligations and all admissible debts have been dealt with, the plan terminates and the company is released from those debts. If a breach of the plan is not fixed within 30 business days, or the plan ends early for another reason, the unpaid admissible debts become due and payable again. See what happens if a company can’t keep up its SBR plan.
Common questions
What must a small business restructuring plan include?
It must identify the company property to be dealt with and how it will be dealt with, provide for the plan practitioner’s remuneration, and state the date the plan was executed.
How long can an SBR plan last?
Payments on admissible debts must be completed within three years of the plan being made.
Can an SBR plan pay some creditors more than others?
No. All admissible debts and claims rank equally under a plan, and no creditor or class of creditors can be given priority.
Who prepares the SBR plan?
The directors prepare the plan and the restructuring proposal statement, with the restructuring practitioner’s help, in the form ASIC approves.
Can an SBR plan be changed after creditors vote?
A plan can’t be changed once voting begins. After it is made, only the court can vary it, on application by the company, an affected creditor, the plan practitioner or ASIC.
Sources: Corporations Act 2001 (Cth) Part 5.3B; Corporations Regulations 2001 (Cth) regs 5.3B.15, 5.3B.16 and 5.3B.61; ASIC, Small business restructuring and the restructuring plan; ATO, Small business restructuring. This page is general information, not advice about your circumstances. Last reviewed: 16 October 2026.
Written by John Chand, Principal and Registered Liquidator. John has more than 17 years’ insolvency experience. Meet the team.
