If you are a company director dealing with mounting ATO debt, creditor demands or a cash flow crisis, you have probably started searching for answers. One term that surfaces quickly is ‘restructuring practitioner’. But what does a restructuring practitioner actually do, how much do they charge, and do you lose control of your business the moment one is appointed?
Understanding what a restructuring practitioner is before you are forced into a formal insolvency process is one of the most important steps you can take to protect yourself and your business. In this guide, AS Advisory breaks down the restructuring practitioner’s role under Australia’s Small Business Restructuring (SBR) process, explains typical fee structures, and clarifies what directors retain control over throughout.
The Director’s Dilemma: Why Delayed Action Costs More Than Early Advice
Most directors facing financial difficulty do not wake up one morning with a sudden crisis. The pressure builds gradually. BAS obligations fall behind, a key debtor defaults, and the ATO sends a reminder, then a firmer letter, then a Director Penalty Notice that shifts the liability from the company to you personally.
Under section 588G of the Corporations Act 2001 (Cth), directors have a legal duty to prevent their company from incurring debts while insolvent. Breaching that duty can result in personal liability, civil penalties and criminal prosecution.
At each stage, the instinct is to hold on and hope conditions improve. That instinct is understandable, but it is also the single biggest risk factor for directors of financially distressed companies. Every week of delay narrows your options. A business that could have been restructured six months ago may only qualify for liquidation today.
The real-world consequences are stark: forced liquidation that destroys business value, personal liability for debts incurred while the company was insolvent, reputational damage that follows you into future ventures, and restructuring opportunities that simply evaporate once creditors lose patience.
What directors under financial pressure actually need is independent, senior-level advice that identifies their duties, explains available options and sets out a path that protects both business and director personally.
“The directors I work with are not reckless. They are experienced business people who have been trying to solve the problem themselves. The issue is that by the time most directors pick up the phone, their options have already narrowed. Six months earlier, we could have explored restructuring. Now we are managing damage.” – Andrew Schwarz, Director CA CPA, AS Advisory
What Is a Restructuring Practitioner Under Australia’s SBR Process?
A restructuring practitioner is a registered liquidator appointed to oversee the Small Business Restructuring process under Part 5.3B of the Corporations Act 2001. The SBR framework was introduced in January 2021 as a streamlined alternative to voluntary administration for eligible small businesses.
Unlike a voluntary administrator or liquidator who takes control of the company, a restructuring practitioner works alongside the directors. Directors remain in control of day-to-day operations while the practitioner oversees development and implementation of a restructuring plan.
To act as a restructuring practitioner, the individual must be a registered liquidator and a member of CPA Australia, Chartered Accountants Australia and New Zealand, or the Institute of Public Accountants. Many are also members of the Australian Restructuring Insolvency and Turnaround Association (ARITA), which sets professional and ethical standards for the industry.
What the restructuring practitioner does
- Assesses company eligibility for SBR, including confirming liabilities fall within the prescribed threshold
- Lodges required notices with ASIC and notifies creditors of the appointment
- Works with directors to develop a restructuring plan proposing how debts will be repaid over up to three years
- Issues the plan to creditors and oversees the voting process
- Administers the plan if creditors accept it, including distributing payments
- Approves any transactions outside the ordinary course of business during the restructuring period
The practitioner acts as an independent professional. Their obligation is to the process and to creditors, not to the directors personally. This independence is a safeguard that gives creditors confidence in the process and gives directors a structured framework for negotiating with creditors from a position of good faith.
What Directors Retain Control Over During SBR
One of the most significant advantages of the SBR process is that directors stay in control. During SBR, directors continue to manage operations, make commercial decisions and trade in the ordinary course of business. Employees stay employed, supplier relationships continue, and customers may not be aware a formal restructuring is underway.
The practitioner provides oversight to protect creditors but does not replace the directors. In practical terms, directors must obtain practitioner approval for transactions outside the ordinary course of business and disclose the appointment when entering new transactions. Directors cannot enter into new credit arrangements or dispose of significant assets without the practitioner’s consent.
Restructuring Practitioner Fees: What to Expect
For straightforward SBR appointments with a small number of creditors and simple debt structures, fees generally range from $15,000 to $30,000 (plus GST). More complex matters with numerous creditors or disputed claims may sit higher.
Compare this against the alternatives: voluntary administration typically costs $50,000 to $100,000 or more, and directors lose control entirely. Liquidation carries its own costs and results in permanent closure. Cost factors include the number and complexity of creditor claims, whether claims are disputed, the nature of the company’s operations, and whether the plan involves distributions over an extended period.
AS Advisory recommends obtaining clear fee estimates in writing before appointing any restructuring practitioner.
Restructuring Options and Pathways for Directors
When a business is under financial pressure, there is rarely just one path forward. The right option depends on the company’s viability, debt level, creditor pressure, and how quickly directors act.
Small Business Restructuring (SBR)
Best for small companies with liabilities under the prescribed threshold where the business is viable. Directors stay in control. The plan must be developed within 20 business days (extendable by 10), and creditors vote within 15 business days. If accepted by a majority in value, the plan binds all unsecured creditors.
Voluntary Administration (VA)
Suited for larger or more complex businesses needing breathing space from creditors. An administrator takes control and investigates whether a Deed of Company Arrangement can be proposed. Directors lose day-to-day control, and costs are typically higher.
Informal workout
Where financial difficulties are manageable and creditors are willing to negotiate, direct negotiation on revised payment terms may be possible without a formal appointment. However, these arrangements are not legally binding and do not provide safe harbour protection.
Liquidation
If the business is not viable, a liquidator winds up the company, realises assets and distributes proceeds. Directors lose all control and the business ceases. Choosing the right pathway depends on viability, debt levels, creditor attitudes and personal exposure. This is exactly where independent restructuring advice from AS Advisory is most valuable.
The Risk of Delayed Action
Under ASIC’s guidance on director duties and Regulatory Guide 217, directors must keep themselves informed about the company’s financial position, regularly assess solvency, obtain professional advice and act on it promptly.
- Personal liability. If a director allowed the company to incur debts while insolvent, they can be ordered to compensate creditors with no cap on the amount.
- Director Penalty Notices. The ATO can make directors personally liable for unpaid PAYG, GST or superannuation. In 2024-25, the ATO issued more than 84,000 DPNs. If BAS lodgements are more than three months overdue, a lockdown DPN applies with no option to avoid personal liability through administration.
- Loss of options. A company eligible for SBR six months ago may no longer qualify if liabilities have grown or winding-up proceedings have commenced.
- Cost escalation. Early restructuring advice from AS Advisory costs a fraction of an eventual liquidation process. Directors who engage early often preserve significantly more value for themselves, their creditors and their employees than those forced into a reactive position.
Best Practices for Melbourne Directors
When financial pressure starts to build, practical steps matter. For Melbourne directors, early action, clear records, and the right advice can make a significant difference to both the outcome and the options still available.
Warning signs you need advice now
- Consistently unable to pay creditors within normal trading terms
- ATO obligations (BAS, PAYG, superannuation) falling behind
- You have received a Director Penalty Notice or statutory demand
- Using new debt to pay old debt or relying on related-party loans
- Key suppliers threatening to withdraw credit or commence legal action
Key questions to ask any restructuring advisor
- Are you independent, or do you have a pre-existing relationship with any creditor?
- What are my personal exposure risks right now?
- What options are realistically available given my company’s financial position?
- What are your fees, and how are they structured?
- Will a senior practitioner handle my matter, or will it be delegated to junior staff?
Understanding safe harbour
Safe harbour provisions under section 588GA of the Corporations Act can protect directors from personal liability if they pursue a course of action reasonably likely to lead to a better outcome than immediate administration or liquidation.
Directors must keep employee entitlements and tax obligations current and demonstrate they sought appropriate professional advice. AS Advisory helps directors understand whether safe harbour is available and what steps are needed to maintain it.
How Independent Restructuring Advice Works
Not all restructuring advice is equal. Some practitioners are aligned with creditors or volume-based insolvency firms that benefit from a particular outcome. Independent advice means the advisor’s only obligation is to give you the clearest, most accurate picture of your situation and options. That is the standard AS Advisory holds itself to.
A quality independent advisor begins with a thorough viability review: can the business trade profitably if its debt burden is restructured? Then an option analysis: what formal and informal pathways are available? And finally, clear recommendations: what should the director do, and in what order?
AS Advisory provides senior-led restructuring advice for directors across Melbourne, Victoria and Australia. Principal Andrew Schwarz brings decades of experience in corporate restructuring, focused on practical outcomes. Every matter receives direct senior attention, and the advice is tailored to the director’s specific circumstances.
AS Advisory’s small business restructuring services give directors clarity before commitment. For further background on how SBR works, see:What Is Small Business Restructuring (SBR)?
Frequently Asked Questions About Restructuring Practitioners
Do I lose control of my business if I appoint a restructuring practitioner?
No. Under SBR, directors remain in control of day-to-day operations. The restructuring practitioner provides oversight but does not take over management of the company.
How much does a restructuring practitioner cost?
Straightforward SBR engagements typically range from $15,000 to $30,000 (plus GST). More complex matters may cost more. Always request a written fee estimate before an appointment.
What is the difference between a restructuring practitioner and a liquidator?
A restructuring practitioner oversees SBR while directors stay in control. A liquidator takes control and winds up the company. Both must be registered liquidators, but their roles are fundamentally different.
Can I be personally liable for company debts?
Yes. Directors face personal liability through insolvent trading claims, ATO Director Penalty Notices and personal guarantees. Early independent advice is the most effective way to manage your exposure.
How long does the SBR process take?
The plan must be developed within 20 business days (extendable by 10). Creditors then have 15 business days to vote. If accepted, the plan can run for up to three years. The initial process typically takes six to eight weeks.
What happens if creditors reject the plan?
If the plan is not accepted by a majority of creditors by value, the SBR process ends. The company must then consider alternatives such as a revised proposal, voluntary administration or liquidation.
Is my business eligible for Small Business Restructuring?
Eligibility depends on several factors, including the level of the company’s liabilities, whether tax lodgements are up to date and whether the company has previously been through an SBR process. AS Advisory can assess eligibility as part of a confidential initial review.
Will my customers and suppliers find out about the restructuring?
Creditors are notified as part of the formal process, and the company must disclose the appointment when entering new transactions. However, the SBR process is generally far less disruptive to commercial relationships than voluntary administration or liquidation.
Take the First Step: Get Independent Advice Before Your Options Narrow
Understanding what a restructuring practitioner does is an important first step. But what protects directors is early, independent advice that identifies your duties, clarifies your exposure and maps out a realistic path forward.
If your business is under financial pressure, the best time to seek advice was months ago. The second-best time is today. AS Advisory provides confidential initial assessments for directors across Melbourne and Australia who need clarity on their restructuring options.
Contact AS Advisory for a confidential discussion:
- Phone: 1300 591 543 or (03) 8609 0311
- Website: asadvisory.com.au
Early advice creates options. Delayed advice creates outcomes.