How Long Does Small Business Restructuring Take?

Each stage below starts when the previous one ends. The periods are set by regulation rather than by the Act itself, so they can be varied — but the figures below are the ones currently in force.

Taken together, that is about 35 business days from appointment to a known outcome — roughly seven to eight calendar weeks — assuming no extension is sought and nothing goes wrong. An extension adds up to 10 business days, so about two weeks more.

The clock starts at appointment. Everything that determines whether the appointment is even possible happens before that, on no deadline at all.

If tax lodgements are behind, they have to be brought current. For a company two years behind on BAS with incomplete books, that is not a weekend’s work — it is a bookkeeping project, and it usually sets the real timetable. If employee entitlements are unpaid, they have to be funded. And total liabilities have to be scheduled properly, which means chasing down related-party loans, equipment finance, unquantified guarantees and the real ATO balance including interest and penalties.

In practice this stage runs from two weeks for a company with tidy books to several months for one without. It is worth saying plainly: a director who wants this done quickly should spend their effort here, not on the formal process.

The statutory periods are the same for everyone. What differs is how long a company needs to become appointable, and it is worth seeing the two cases side by side.

A company with current lodgements and reliable books

Entitlements are paid, BAS is lodged up to date, and the accounts are close to real time. Preparation takes perhaps two to three weeks: scheduling every liability properly, confirming the total sits under the threshold, and modelling what trading can fund under a plan. Appointment follows, then the statutory periods run. From first advice to a known outcome, roughly ten to eleven weeks.

A company two years behind on lodgements

The books have to be reconstructed before anyone can say what the liabilities are or whether the company qualifies. That is a bookkeeping project measured in months, not weeks, and it usually has to happen before an appointment is possible at all. From first advice to a known outcome, six months would not be unusual — and during those months the arrears keep growing and the exposure keeps building.

The difference between those two timelines is not the process. It is entirely the state of the records, which is why bringing lodgements current is the single most useful thing a director in this position can do before speaking to anyone.

An accepted plan is not the end of the timeline — it is the start of the part that takes longest. A plan can run for up to three years from the day it is made (reg 5.3B.27(1)(b)), and it is funded from trading. A longer term means smaller payments and more time to carry them; a shorter one means the company is clear sooner but has to find the money faster.

During the plan the company trades normally, the directors stay in control, and the practitioner administers the payments. The debts are not extinguished until the plan is completed, so a plan that runs three years is a three-year commitment, not a three-week fix.

If creditors reject the plan, the restructuring ends at that point and the timeline stops. The company is not wound up automatically, but nothing has been compromised either.

The SBR clock is not the only one running. Three external deadlines routinely overtake it.

1. 1.A statutory demand. Twenty-one days from service to pay, reach agreement, or apply to set it aside, and the period cannot be extended (David Grant & Co v Westpac (1995) 184 CLR 265). That is shorter than the preparation stage for most companies.
2. 2.A wind-up application. Once a winding-up application has been filed, directors cannot appoint a restructuring practitioner without the leave of the court (s 453B(2)). At that point the court's timetable governs.
3. 3.A director penalty notice. The window to respond is short, and where BAS or PAYG withholding is unlodged more than three months past its due date (Division 269 of Schedule 1 to the Taxation Administration Act 1953) — or where an SGC statement is unlodged past its due date, which carries no grace period at all — the liability locks down, and SBR, voluntary administration and liquidation will all fail to remit it.

If any of those is already in play, the sequence matters more than the total duration. The question stops being how long a restructuring takes and becomes whether there is time to reach an appointment before the other deadline closes the option.

1. 1.An extension to the proposal period. The practitioner can extend it by up to 10 business days on reasonable grounds (reg 5.3B.17(2)), which is sometimes the sensible course if a plan is nearly ready.
2. 2.Disputed claims. A creditor whose claim has to be adjudicated can slow the vote and the distributions.
3. 3.Incomplete books. The single biggest driver of delay, and it hits before the clock starts rather than during it.
4. 4.A rejected plan. Ends the process inside the statutory periods, with the debts intact.
5. 5.Termination for default. Ends a plan mid-term, and the compromise is extinguished so the debts revive to the extent unpaid (reg 5.3B.31(2)).
6. 6.A wind-up application already on foot. Once one is filed, an appointment needs the court's leave (s 453B(2)), which usually removes the option in practice.

If you are working to a deadline — a payment plan about to fail, a demand received, a creditor escalating — the number that matters is not the seven or eight weeks of the formal process. It is how long your company needs to become appointable. That is the figure worth establishing first, because it is the one you can still change.