The Corporations Act is slowly catching up to modern technology.

From 1 April 2021, the Bankruptcy Regulations 1996 (Cth) (Former Regulations) were replaced by the Bankruptcy Regulations 2021 (Cth) (Bankruptcy Regulations). Whilst the various amendments introduced by the new Bankruptcy Regulations have been largely represented as minor and administrative in nature, there is one critical amendment concerning the method for service of bankruptcy notices.

What is a bankruptcy notice?

The COVID-19 pandemic has created a number of significant challenges for Australian businesses, and it seems these challenges are not over yet.

The temporary relief measures for financially distressed businesses and individuals that were introduced in March 2020 expired on 31 December 2020.

Although new insolvency reforms took effect from 1 January 2021, which are designed, in part, to help small companies survive insolvency, the recent wave of COVID-19 outbreaks and the consequential restrictions and lock-downs present further challenges for Australian businesses.

The Federal Government yesterday announced a package of temporary measures to assist financially distressed companies. The package is intended to allow distressed businesses (and individuals) time to weather the uncertain storm of Covid-19 and resume normal business once the immediate crisis is over.

Each element of the package will apply (at this stage) for 6 months.

Some experts suggest that, by this time next year, Australia will be awash with insolvent small to medium enterprises (SMEs) needing experienced assistance.¹