Business insolvency and bankruptcy protections extended until the end of 2020
7 September 2020, Written by Business News Australia
Temporary insolvency and bankruptcy protections to assist financially distressed Australian businesses during the COVID-19 pandemic have been extended until 31 December 2020.
The Federal Government will introduce regulations to extend the temporary increase in the threshold at which creditors can issue a statutory demand on a company, as well as the time companies have to respond to demands they receive.
In addition, the changes will extend the temporary relief for directors from any personal liability for trading whilst insolvent.
"The extension of these measures will lessen the threat of actions that could unnecessarily push businesses into insolvency and external administration at a time when they continue to be impacted by health restrictions," Federal Treasurer Josh Frydenberg and Minister for Industrial Relations Christian Porter said in a joint statement.
"These changes will help to prevent a further wave of failures before businesses have had the opportunity to recover.
"As the economy starts to recover, it will be critical that distressed businesses have the necessary flexibility to restructure or to wind down their operations in an orderly manner."
Updated at 12.39pm AEST on 7 September 2020.
Author: Business News Australia