Wairarapa MP Alastair Scott’s Members’ Bill seeks to support businesses by giving companies in difficulty more opportunities to turn their fortunes around.
“My Bill would create the option of a ‘safe harbour’, which companies that are or are likely to be trading insolvently will be able to take up before an external administrator is appointed,” Mr Scott says.
“The ‘safe harbour’ option would prescribe actions that must be taken which would likely lead to a better outcome for the company, like taking professional advice, developing a plan for restructuring and improving record keeping.
“Too often, a company’s director will prematurely place a company into receivership, but many businesses, especially small businesses, face difficulties that are temporary in nature.
“This Bill will give those companies the opportunity to trade through difficult cashflow periods, avoiding the upheaval and uncertainty of receivership for companies that do have a chance of turning things around.
“Even the most successful businesses go through rough patches. Giving businesses options when times are tough will ensure that more can go on to succeed.”
The Companies (Safe Harbour for Insolvent Trading) Amendment Bill can be found here.