Business rescue in South Africa is governed by the Companies Act 71 of 2008. A company may apply for business rescue when they are in severe financial distress and in need of a financial lifeline through which to salvage their business and continue operations. Simply put, it offers companies a second chance, enabling them to protect the livelihoods of their employees and ensuring that they are able to repay their creditors. If your company is in financial distress, then you will benefit from learning more about the business rescue process and reaching out to the legal experts at Francois Uys Incorporated Attorneys.
Is Business Rescue the Right Option for Your Company?
At Francois Uys Inc. Attorneys, we have an important goal: To save your business and get it back on track. While business rescue may not be viable for every company, these signs indicate that it could benefit your business. If these seem true, then it might be an option.
Your business is currently unable to meet its financial obligations, but:
- The business model itself is viable.
- There are some positive projections for the company’s future and potential growth.
- A little breathing room could support you in saving the company and getting out of financial distress.
If you meet these requirements, a business rescue practitioner can temporarily supervise your business and develop and implement a robust plan that restructures the organisation and various affairs including the business itself, its assets, its property, any debt, and all other liabilities.
The core aim is to increase the chances of the business continuing. If, however, it is later determined that the company is unable to operate on a solvent basis, the next step would be to ensure a better outcome for both creditors and shareholders rather than immediate liquidation.
At Francois Uys Inc. Attorneys, we can confidently help you with the following:
- Corporate business rescue
- The creation of a comprehensive plan
- Business rescue and all legal proceedings
- Supporting companies facing insolvency
Key Elements of Business Rescue
Our experienced team takes several important steps during the process. These include:
- Filing a claim: The company directors must file a notice to the Companies and Intellectual Property Commission (CIPC) that states they are in need of business rescue. They must provide information on the businesses’ financial position and propose a plan.
- Appointing a practitioner: The company must then appoint a specialised practitioner. They will oversee the entire process, manage all business affairs, and have the authority to make critical decisions to save the company and prevent liquidation.
- Create a business rescue plan: The practitioner creates a specialised and bespoke plan and ensures that all creditors and shareholders approve of it. The plan must contain a strategy to rehabilitate and restructure the company’s financial affairs and the practitioner must ensure its effective implementation throughout the organisation.
- Continuous engagement of all stakeholders: The process should actively involve critical stakeholders and ensure their buy-in for optimal success. This includes directors, creditors, employees, and any other shareholders.
The Benefits of Business Rescue with Specialised Attorney
Business rescue holds many benefits for companies, including:
- Access to qualified and experienced practitioners with a wealth of knowledge on saving your business.
- Job preservation of current employees.
- Better returns for all creditors once the business has been successfully restructured and rescued.
- Higher likelihood of business recovery.
- Strategic and long-lasting adjustments that benefit the business, including contract renegotiation, finding new investors, and getting rid of any unprofitable divisions.
Reach Out to Francois Uys Inc. Attorneys for Legal Support
To date, we have achieved well over 8,000 successful cases, offering our clients the chance to improve their financial health and get back on track. If you are considering the business rescue process and need a qualified team by your side, we are ready and available to assist. Reach out to us and we can analyse your case and offer expert legal advice.
