Page 14 - PowerPoint Presentation

BUSINESSES IN DIFFICULTY

Business rescue principles in terms of the

Companies Act

• The business rescue regime is an attempt to provide an

alternative to liquidating a near-insolvent company.

• A directors’ resolution that declares that the company is

in dire financial straits is required An independent person

(called a ‘practitioner’) must also be appointed.

• The business rescue practitioner has the duty to

investigate the company’s affairs and then decide

whether or not there is any reasonable prospect of

rehabilitating the company.

• If the practitioner decides that there is such a prospect,

he must then prepare a business plan. After the business

plan is approved by the company’s creditors (and

shareholders, if their rights are affected) the practitioner

must then oversee its implementation.
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