Source: Australian Small Business and Family Enterprise Ombudsman.
The Australian Small Business and Family Enterprise Ombudsman Kate Carnell has welcomed the federal government’s extension of temporary insolvency and bankruptcy protections, to support struggling small businesses impacted by the COVID crisis.
Regulations reducing the threat of creditors taking action against a small businesses impacted by trading restrictions have now been extended to 31 December 2020.
The changes also extend the temporary relief for directors from any personal liability for trading while insolvent.
“These necessary measures give otherwise viable small businesses more time to recover, preventing a wave of unnecessary insolvencies,” Ms Carnell says.
“While we support this temporary relief for financially distressed businesses, there will also be a number of zombie businesses kept artificially afloat as a consequence.