Chapter 6 of the Companies Act, No. 71 of 2008 (The Act) provides for business rescue, which is a mechanism designed to avoid imminent liquidation of financially distressed companies. The main purpose of the regime is to facilitate the rehabilitation and to rescue companies who are experiencing financial difficulty. A company can be placed under business rescue in two ways: either voluntarily by a resolution of the directors of the company, or by a Court Order following an application to court by an affected person (shareholder, employee, trade union or creditor)1.
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Written by Meegan Henkeman, Schoeman Tshaka Attorneys