Corporate Debt Proposals

When a business finds itself in dire straits, resorting to bankruptcy might seem like the only option. However, a Corporate Proposal can provide a viable alternative, salvaging the business while ensuring creditor rights are protected. Let’s dive deep into this lifesaver for businesses, its benefits, and how it works.

What is a Corporate Proposal?

A Corporate Proposal, also known as a Division 1 Proposal or Commercial Proposal, is a debt assistance or consolidation process available to commercial entities. This includes incorporated businesses as well as certain unincorporated partnerships. Recognized as separate “persons” from the individuals running them, these entities can seek this alternative to filing for bankruptcy.


Note: A Corporate Proposal is distinctly different from a Consumer Proposal.


The Role of a Licensed Insolvency Trustee

A Licensed Insolvency Trustee (LIT) plays a critical role in the Corporate Proposal process. They not only investigate the financial affairs of the business but also ensure the rights of creditors and the business are preserved.

The Duties of an LIT

Here are some of the core responsibilities of an LIT:


  • Conducting a comprehensive financial analysis of the business.
  • Determining if a Corporate Proposal is suitable for the business.
  • Preparing and presenting the Corporate Proposal.
  • Liaising with creditors regarding the proposal.


The Journey of a Corporate Proposal

A Corporate Proposal typically follows a systematic process, which includes consultation, evaluation, preparation, and presentation.

Consultation and Evaluation

This initial phase involves meeting with the LIT for a free consultation. The trustee conducts an in-depth analysis of the business’s financial situation to determine if a Corporate Proposal would be a suitable option.

Preparation of the Corporate Proposal

If the trustee believes a Corporate Proposal would be beneficial, the process of preparing the proposal begins. The aim is to strike a balance that works for both the business and its creditors.

Presentation of the Corporate Proposal

Once the proposal is ready, the trustee contacts the creditors with the proposal.

Why Choose a Corporate Proposal?

Choosing a Corporate Proposal over bankruptcy can offer several advantages:


  • It allows the business to continue operations.
  • It helps preserve the business’s reputation.
  • It prevents the liquidation of assets.
  • It provides a structured repayment plan.


In conclusion, a Corporate Proposal serves as a practical Bankruptcy Alternative for Businesses. To determine if it’s the right choice for your business, consider scheduling a consultation with a Licensed Insolvency Trustee.

Find Your Personal Debt Relief Solution

Licensed Insolvency Trustees are here to help. Get a free assessment of your options.

Discuss options to get out of debt with a trained & licensed debt relief professional.