When asked about 2020, the year that was, Maddocks lawyers insolvency Partner, Sam Kingston said:"The predicted 'avalanche' of insolvencies in 2020 never eventuated, largely because of unprecedented Government stimulus and changes in policy and regulation. The concern in the insolvency industry is that many businesses have not used the breathing space to restructure or consider future trading and that there are a large number of 'zombie' companies that have continued to trade notwithstanding that the underlying business is not viable."
When asked about what the year 2021 will look like for businesses as we return to a 'COVID normal', Sam, predicts that insolvencies are anticipated to surge."The consensus is generally that a surge in insolvencies is coming as the pendulum swings back. The timing of that surge will depend on factors such as the impact of end of JobKeeper, the Tax Office's return to enforcement action, the end of restrictions on creditors pursuing debts and ongoing impacts of further lockdowns. With JobKeeper ended (on 28 March 2021) and suggestions that the Tax Office is starting to increase audit activity and enforcement some uptick is expected soon. The difficulty for good businesses is that there is always a flow-on effect where, for example, a customer enters liquidation and does not pay its debts."
It is now a more appropriate time than ever to consider business structuring. This FREE report looks at how different business structures can assist, solutions available, practical examples, tips and risks.Julian Smith, Melissa Ramov
Julian Smith is a partner in the Maddocks Commercial team.
Julian advises extensively in the following areas:
Julian advises clients ranging from public companies servicing the wholesale financial services market to high net worth individuals and their advisers.
Julian has been with Maddocks since undertaking articles in 2001.
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