Virus-hit firms to be given flexibility
Treasurer Josh Frydenberg has announced a series of practical measures to assist corporations through the coronavirus crisis, such as flexibility around bankruptcy laws and the holding of shareholder meetings.
Announcing the Morrison government's second $66 billion support package to cushion the blow from COVID-19, Mr Frydenberg said he wanted to provide a "regulatory shield" for otherwise profitable and viable businesses that find themselves under financial pressure.
"Now is the time for more flexibility in insolvency and bankruptcy laws to keep these businesses alive and to trade through this period," the treasurer told reporters in Canberra on Sunday.
The government is proposing to increase the threshold at which a creditor can take action to initiate insolvency or bankruptcy from as low as $2000 today to $20,000.
Companies and individuals will also be allowed six months instead of 21 days to respond.
Mr Frydenberg said as a result of the health-related restrictions being put in place to reduce the impact of the virus, it would not be possible for many companies to comply with their obligations under the corporations act, such as holding general meetings in person.
"A temporary six-month power will be provided to me as the treasurer to deal with these situations as they arise," Mr Frydenberg said.
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