The South African economy has faced its share of challenges in recent years, and many businesses have felt the impact of economic downturns. When facing financial distress and debt restructuring, it is essential to know your rights and options. This article guides businesses facing insolvency with insight into business rescue and liquidation.
Seek professional advice
When your business is going under, it is crucial to seek professional advice from qualified attorneys or insolvency practitioners like SVN Attorneys. They can help you understand the available options and guide you through the complex process.
Qualified professionals have in-depth knowledge of South African laws and regulations which can be applied to individual businesses because every business’s financial situation is unique. Attorneys and insolvency practitioners can analyse your company’s financial records, assets, liabilities, and contracts to provide you with tailored solutions that best suit your circumstances. Assessing the Financial Situation is very important. Professionals can conduct a thorough assessment of your company’s financial position. Understanding the extent of your liabilities and assets will help you determine whether your business is insolvent or not, and help you understand the pros and cons of each available option.
Where to find professional advice?
SVN Attorneys would like to assist you to ensure that you find the best available option to handle the situation. Click here.
Considering liquidation or business rescue
Understanding your company’s financial health will help you determine whether your business is insolvent. Insolvency occurs when your liabilities exceed your assets, leaving you unable to meet your financial obligations as they come due.
If your business is financially distressed but potentially viable, you might want to consider business rescue as an option. This process aims to rehabilitate the business and protect it from liquidation.
Being transparent about your financial situation with stakeholders, including creditors and employees, builds trust and may lead to more cooperative efforts during negotiations.
Accurate financial information allows you to make informed decisions about the best course of action for your business. It helps you choose between pursuing business rescue, liquidation, or other options based on your financial reality.
SVN Attorneys offer a range of liquidations
SVN can assist with the liquidation of entities which is insolvent or the liquidation of entities that owe clients money. Contact us for an assessment.
Stay Compliant and Engaging
During the liquidation or business rescue process, it is crucial to remain compliant with all relevant laws and regulations. Failure to do so may jeopardise the success of the procedure.
Open communication with creditors is essential. In the case of business rescue, engage in discussions with them and present your rescue plan, and negotiate in good faith to secure support for the plan.
Attorneys and insolvency practitioners can handle negotiations with creditors, suppliers, and other stakeholders on your behalf. This can help ease tensions and lead to more productive discussions during difficult times.
Legislation as provided by Go Legal:
