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The process of Business Rescue can be found in Chapter 6 of the Companies Act of 2008 of South Africa.
“A NECESSARY EVIL OR BRILLIANT BUSINESS?”
Author: Tiaan Geel, BA(SA), M.B.A Experienced Business Rescue PractitionerIf you would like to get more information, please visit our Consulting website or send us a message here.
Business Rescue is a relatively new term in the South African legal landscape having only been effectively adopted in April 2011. Although the process is still in its infant years in terms of our judicial system, it has been the cause of tremendous joy as well as probably ten times the amount of anger, fear and utter frustration.
The reasons for this anger, fear and frustration stem from the fact that everyone in South Africa is still not an expert on Chapter
I bet you read the topic of this blog and thought, boy, what a contradiction. You probably also thought: “Yeah right genius, it is the end. Closing a business IS the end”. Well, it is the end for that specific business, yes. But is it the end of your career as an entrepreneur? Sir Richard Branson certainly does not think so after 15 failures. Is it the end of your creative journey? No, you just need to come up with a different angle on your business idea. This time you have a chance to start over while knowing the pitfalls and dangers. Let’s be real for a second though, closing a business is not easy. In my job of saving companies, this is the exact opposite of what I am trying to achieve. Sometimes, things just don’t work out. Sometimes, you have to explain to your staff members that they do not have
The process of Business Rescue was incorporated into the new Companies Act of 2008 and has one of two goals as defined in the act. The first goal is to rescue the company so that it can continue in existence or, if this is not possible, to provide the company’s creditors or shareholders with a better return than what they would receive if the company was immediately liquidated. I believe that the main aim of including Business Rescue proceedings into the South African legal landscape is to ensure that the business can continue as a sustainable business adding value to the economy. The moment that this is achieved the benefits are enormous. Jobs of employees are saved, income is generated for many households, and in many cases for the lower income groups, SARS continues to collect taxes from a viable entity and suppliers continue to do business and retain a customer. Yes,