This article appeared in the Lowvelder on 21 October 2016
In the last couple of weeks we discussed how and when a company must commence with business rescue proceedings and the effect it has on employees and its creditors. It is however just as important to understand what the effect business rescue will have on your company.
In the next few weeks we are going to discuss the business rescue practitioner in more detail.
The act sets out who may be appointed as a practitioner, the qualifications required as well as his duties and responsibilities.
A practitioner must be a member in good standing of a legal, accounting or business management profession. He should have a strong financial background, and may not have any conflicts of interest with the business he is appointed to help.
The appointed practitioner has the responsibilities, duties and liabilities of a director of the Company and is in charge of the business rescue proceedings.
Before a company may appoint a business rescue practitioner to assist with the rescue process, the Companies and Intellectual Property Commission (CIPC) must issue the practitioner with a license.
Companies undergoing business rescue proceedings are classified either as large, medium or small companies according to what is referred to as a public interest score. The size of the company determines the experience required by the business rescue practitioner.
It is important to note that the practitioner is the most important player in the business rescue process. It is therefore critical to appoint the correct practitioner for your particular business in order to provide it with the best possible chance to exist on a solvent basis and prevent it from being liquated.
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