Companies Act - Business Rescue

With the promulgation of the new Companies Act and in particular chapter 6, which deals with business rescue (BR), a new era has been introduced. Business rescue refers to proceedings to facilitate the rehabilitation of a company that is financially distressed, with the aim of maximising its chances of continuing to exist as a solvent business.

Financially distressed means that within the immediate ensuing six months:
• it appears reasonably likely that the company will be unable to pay all its debts as they become due and payable (Commercial insolvency); or
• it appears reasonably likely that the company will become insolvent (Balance Sheet insolvency).

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