In consultation with the CA ANZ Insolvency Management Committee, we provided an initial response to the Australian Small Business and Family Enterprise Ombudsman in relation to the Insolvency Practices Inquiry.
Key points from our response include:
- The importance for the Inquiry to look at the reasons why small businesses fail, not just why they cannot be restructured
- Emphasis on the important role education can play for directors in understanding obligations and financial matters as well as increasing awareness of the warning signs of insolvency so that they can seek help earlier in the process
- Our recommendation to consider a simplified version of voluntary administration, particularly for small businesses, which would include greater involvement from directors
- The importance for directors and small business owners to identify and engage with trustworthy pre-insolvency practitioners
We encourage the Inquiry to strike an appropriate balance between the interests of the small business owner and the interests of the creditors of insolvent small business, who may also be small businesses themselves.