Can You Enter into an SBR After Being Issued a Director Penalty Notice (DPN)?
Yes, you can enter into a Small Business Restructure (SBR) after receiving a Director Penalty Notice (DPN) — but it depends on what type of DPN you've received and how quickly you act. Time is critical.
First, Understand the Two Types of DPNs:
SBR Can Help with Non-Lockdown DPNs
If you received a Non-Lockdown DPN, entering into an SBR within the 21-day window can:
Prevent you from being personally liable
Restructure and reduce company tax debts (including PAYG & super)
Protect your business from further enforcement action
Important: The clock starts from the date on the DPN, not when you received it.
SBR Won’t Fix a Lockdown DPN
If you’ve received a Lockdown DPN, an SBR won’t remove your personal liability as a director. You may still proceed with an SBR to save the business, but you remain personally liable for the locked-down amounts.
In this case, you should:
Seek immediate legal and financial advice
Explore repayment strategies for personal exposure
Assess other insolvency options if needed
Tip for Directors:
If you're unsure which DPN you received:
Look at the wording: Non-lockdown DPNs offer 21 days to act, Lockdown DPNs do not
Or consult with a Small Business Restructuring Practitioner or insolvency expert
Summary
References
ATO – Director Penalty Notices
Corporations Act 2001 (Cth) – Part 5.3B Restructuring
