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	Articles Blog Bookkeeping – Insolvency & Liquidation meaning and solutions - Australia Details Published on Thursday, 09 May 2024 11:13 Corporate insolvency occurs when a company is unable to meet its financial obligations to creditors on time. It is crucial for company directors to prevent the company from trading while insolvent, as this can lead to severe consequences such as civil penalties, compensation proceedings and criminal charges. There are 12 warning signs that indicate a company may be approaching insolvency, and it is essential to seek advice promptly if any of these signs are identified. And if my company is insolvent? It is crucial to seek early guidance from a reliable advisor to improve the chances of the company's survival. Adopting an approach of ignoring the situation and hoping for improvement is not an effective strategy. Allowing a company to trade while insolvent or violating directors' fiduciary and statutory duties can lead to severe penalties and consequences. Corporate insolvency procedures encompass several options, including: Early intervention choices such as Voluntary Administration, Safe Harbour and Business Restructure; Company wind-up options like Voluntary Liquidation; Creditor enforcement options such as Receivership or Court-ordered Liquidation. Voluntary Administration, Safe Harbour and Business Restructure are intended for viable businesses facing financial distress, providing directors with the opportunity to repay creditors and restore the company's financial health. On the other hand, Liquidation and Receivership are procedures primarily focused on repaying creditors, typically leading to the eventual winding up of the company. Business Life Cycle The ideal scenario involves appointing a registered Small Business Restructuring Practitioner ("SBRP") and striving to rejuvenate the company. Small Business Debt Restructuring The federal government's debt restructuring process for eligible incorporated small businesses with liabilities of less than $1 million was implemented on January 1, 2021. Get the fact sheet HERE. Under this new process, known as a "debtor in control" model, the director will maintain control of the company, while the Small Business Restructuring Practitioner ("SBRP") will serve as an agent for the company, working in collaboration with the director to devise a plan for restructuring the company's debts. Simplified Liquidation – if Rebirth is not possible The federal government's proposed Simplified Liquidation allows an insolvent company placed into Voluntary Liquidation, which meets specific eligibility criteria, to request the Liquidator to utilize the Simplified Liquidation provisions. These provisions are being considered as a potential solution to address the perceived limitations of the current one-size-fits-all system permitted under the existing Voluntary Liquidation provisions. It is advisable to seek legal advice for further clarification. *Need help? Not sure? Call for FREE 30min advice / strategy session today!* *Email* *This email address is being protected from spambots. You need JavaScript enabled to view it.* or call 0407 361 596 Australia ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ Business Tax Tip – Casual Overtime and the Minimum Requirements for businesses Details Published on Thursday, 02 May 2024 17:26 From Nov 2020 there have been changes to casual overtime and the minimum requirements for business to be aware of. Here are some details to get up to speed. Casual Overtime and the Minimum Requirements As of the first full pay on or after 20th November 2020, the Fair Work Commission made changes to 97 awards regarding overtime pay, minimum work periods, and the transition from casual to permanent employment. These revisions include (as some awards already have) – New entitlements for casual employees, such as the right to receive overtime rates after working more than 38 hours The possibility of being paid for a minimum number of hours even if they work fewer hours than the minimum. Additionally, casual employees can request to switch to full-time or part-time employment under certain conditions, including: Who have been with an employer for over 12 months; Having worked regular hours for the past 12 months without significant changes, and become part-time or full-time; It's important to note that specific award provisions may differ, for example, some awards may allow casual employees to request conversion after only 6 months. The employer must provide casual employees, who have been employed for less than 12 months, with a copy of the new casual conversion clause and a letter template. If a casual employee wishes to be considered for a permanent part-time or full-time position, they must submit a written request. The employer is obligated to respond in writing within 21 days of receiving the request, stating the reason if the request is refused. It is crucial to refer to the modern award to confirm the relevance of these changes, as not all awards have been impacted. Specific details of the amended awards are provided below, but it's important to review the relevant award for comprehensive information, updates, and modifications. How is Overtime for Casuals Calculated? The calculation of overtime pay varies depending on the specific award. In certain awards, the casual loading applies to both normal hours and overtime hours, while in others, the casual loading is applicable only to normal hours and not to overtime. It's important to note that with the recent changes to 97 awards, it is necessary to refer to the Individual Industry Award for the specific calculation and payment of overtime worked by casual employees. Additionally, penalty rates may be applicable if specified in the award. Example: General Retail Award Overtime applies when an employee works: More than 38 hrs per week or average 38 hours per week over a roster cycle; or More than 12 hrs on any day, excess is overtime Award clause for payment of overtime is inclusive of casual loading: *21.2 (c) (i) Hours worked by casual employees:* shall be paid at 175% of the ordinary hourly rate of pay for the first three hours and 225% of the ordinary hourly rate of pay thereafter (inclusive of the casual loading). 21.2 (e) The rate of overtime for casual employees on a Sunday is 225% of the ordinary hourly rate of pay, and on a public holiday is 275% of the ordinary hourly rate of pay (inclusive of the casual loading). Penalty payments 22.1 (b) A casual employee must be paid 145% of the ordinary hourly rate of pay for work performed after 6.00pm – Monday to Friday (1 October 2020 to 28 February 2021) inclusive of the casual loading. A casual employee must be paid 150% of the ordinary hourly rate of pay for work performed after 6.00pm (from 1 March 2021) inclusive of the casual loading. Saturday Work A casual employee must be paid 150% of the ordinary hourly rate of pay for all work performed (inclusive of the casual loading). Sunday work A casual employee must be paid 175% of the ordinary hourly rate of pay for all work performed (inclusive of the casual loading). Public Holiday A casual employee must be paid 250% of the ordinary hourly rate of pay for all work performed (inclusive of the casual loading). Se the Full resource available Fair Work: Casual Overtime and Minimum Requirements *Need help? Not sure? Call for FREE 30min advice / strategy session today!* *Email* *This email address is being protected from spambots. You need JavaScript enabled to view it.* *or call 0407 361 596 Australia* ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ More Articles... 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