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Do not be afraid of Business Rescue

April 1, 2016

In today’s economic climate Business rescue has become a critical part of business strategy decision making, especially during economic downturns and recessions.

Early warning signs are regarded as all types of events in business that point to the potential demise of that business.

In the past the moment a business was under financial distress, the chances of the business to survive were bleak and more often than not lead to liquidation, which meant that the business closed its doors, employees lost their jobs and nobody benefitted.

The new Companies Act fundamentally changed the future of companies under financial destress by introducing Business rescue proceedings instead of just Liquidation.

The purpose of Business rescue is to maximise the likelihood of the company continuing in existence on a solvent basis and to save guard employees from retrenchment.

“Business rescue” means proceedings to facilitate the rehabilitation of a company that is financially distressed by providing for the temporary supervision of the company and of the management of its affairs.

A business is now given a lifeline and has the opportunity to be saved instead of closing its doors, but it is very important not to wait until it is too late before the decision is made to get help. The earlier it is realised that the business is in financial destress, the easier it will be to save the business and its employees.

It is also paramount, that once it is decided that the business needs assistance, to instruct a capable Business rescue practitioner to assist you though the process in order to give your business the best chance to survive and continue thereafter on a solvent basis.

BVR Business Rescue is a forerunner in Business rescue proceedings and has assisted numerous businesses to re-establish themselves as solvent companies.

Disclaimer: The contents and information provided above are generalised and must not be acted upon as legal advice

Pieter van Zyl