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The Remuneration of business rescue proceedings

January 17, 2017

A question often raised is what are the costs involved in the event that a company commence with business rescue proceedings.

The current basic remuneration of a business rescue practitioner, as contemplated in section143 of the Act is:

  • R1 250 per hour, to a maximum of R 15 625 per day, (inclusive of VAT) in the case of a small company
  • R1 500 per hour, to a maximum of R 18 750 per day, (inclusive of VAT) in the case of a medium company; or
  • R2 000 per hour, to a maximum of R 25 000 per day, (inclusive of VAT) in the case of a large company, or a state owned
  • A practitioner is also entitled to be reimbursed for the actual cost of any disbursement made by him, or expenses incurred by him to the extent reasonably necessary to carry out his functions and facilitate the conduct of the company’s business rescue

The main objective of business rescue proceedings is to try to rescue the company instead of its liquidation.

A successful business rescue, either as a restructured continuing business or in the form of a controlled wind down of the affairs of the company must in all instances be infinitely more preferable than the destructive implications of a liquidation process.

It is an acceptable fact that the liquidator of company will earn far more from the liquidation of a company, than what the business rescue practitioner will from the same matter. A successful business rescue therefor not only benefits creditors, employees, shareholders and the economy at large but further avoids the further expense of liquidators’ fees and disbursements.

The competent and skillful business rescue practitioner will only accept an appointment in matters where he is confident that he can achieve a result that would ultimately benefit all affected parties and avoid the liquidation of that company.

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances