Can a Company Be Sold During or After an SBR?
Yes, a company can be sold during or after a Small Business Restructure (SBR) — but there are important legal and practical considerations you must understand depending on the timing and structure of the sale.
Selling a Company After an SBR
This is completely legal and common. Once an SBR plan is approved and successfully completed:
The company is debt-free or has reduced debt
Its financial position is improved
It becomes more attractive to buyers
You can sell shares in the company or its business assets post-restructure, and the company continues as a going concern.
Selling a Company During an SBR
This is more complex and generally not advisable unless:
The restructuring plan includes or anticipates the sale
The Small Business Restructuring Practitioner (SBRP) approves
Creditors are informed, and the sale aligns with the plan’s purpose
Selling during an active SBR may:
Trigger legal risks
Undermine creditor trust
Lead to termination of the plan if not done transparently
Key Tip: If a sale is being considered during the SBR, this must be disclosed in the Restructuring Plan and supporting documents submitted to creditors.
Can You Sell Business Assets Instead?
Yes — but the sale of business assets (not the entire company) during SBR must be:
In the ordinary course of business (e.g. stock, equipment)
Approved by the SBRP if outside normal activity
Not detrimental to the plan’s success or creditor return
Legal Framework
The Corporations Act 2001 (Cth) governs SBRs under Part 5.3B
Section 453L outlines restrictions during restructuring, including court or practitioner consent required for certain transactions
Red Flags to Avoid
Selling the company or its key assets to avoid debts without an approved plan can be seen as phoenix activity, which is illegal
Undisclosed or dishonest sale arrangements can lead to termination of the SBR, director penalties, or court action
Bottom Line
After SBR: Sale is legally safe and often beneficial
During SBR: Only if approved by the SBRP and transparently disclosed in the plan
Always consult a registered Small Business Restructuring Practitioner before making sale-related decisions during the SBR process.
References
Corporations Act 2001 – Part 5.3B
Treasury – Insolvency reforms for small business
