Facing liquidation? Business rescue may save your company.
Financial distress does not have to mean the end of your business. Business rescue is a structured legal process under the Companies Act that can shield a viable company from creditors, restructure its debt, and give it room to recover. Acting early can preserve value, protect jobs, and keep the doors open.
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Business rescue is not the end.
It is a structured way back.
Business rescue is a formal process under Chapter 6 of the Companies Act 71 of 2008. It is designed to rehabilitate a company that is financially distressed, rather than let it collapse into liquidation.
At its core is a moratorium, a temporary legal shield that stops creditors from enforcing their claims while a plan to rescue the business is developed and put to a vote. That breathing room is often the difference between a company that recovers and one that is wound up under pressure.
It applies to companies and close corporations that are still commercially viable, where the real problem is cash flow and creditor pressure rather than a business with no future. Where a business can still trade its way forward, business rescue creates the space to do it in an orderly, protected way.
Business rescue or liquidation
They lead to very different outcomes. Understanding the difference early is what keeps the choice in your hands.
Liquidation
The company is wound up. Its assets are sold, trading stops, and the doors close for good. Directors carry the stigma of a liquidated business, which is hard to recover from. It is the end of the company.
Business rescue
The company gains legal protection from creditors, its debt is restructured, and a viable business can keep trading, preserve jobs, and work toward recovery. It is a structured second chance, not a shutdown.
Protection, a plan, a way forward
The company enters business rescue
Business rescue can begin by resolution of the company's board, or in some cases by an affected person applying to court. A moratorium then shields the company from creditor enforcement.
A practitioner develops a plan
A licensed business rescue practitioner supervises the company and develops a rescue plan aimed at either restructuring the business so it can continue, or delivering a better return to creditors than liquidation would.
Creditors vote and the plan is implemented
The plan is put to the creditors for approval. Once adopted, it is implemented, and where it succeeds the company exits business rescue on a more stable footing.
The earlier you act, the more options you keep.
Business rescue is for companies and close corporations that are financially distressed but still have a viable future.
Financially distressed broadly means it is reasonably unlikely the company will be able to pay its debts as they fall due within the next six months, or reasonably likely it will become insolvent within six months.
If that describes your company, waiting rarely helps. Every creditor action that lands narrows the room to manoeuvre. Getting an honest assessment early is what keeps business rescue on the table as a real option rather than a missed one.
A clear, honest read on your options
Consumer Credit Law is a specialist consumer credit consultancy. We help you understand whether business rescue is the right route for your company, what the process involves, and what the Companies Act requires. We assess your position honestly and guide you through the process and the paperwork.
Where the formal steps call for a licensed business rescue practitioner or court action, we coordinate with the appropriate practitioners and affiliate attorneys. We are not a law firm and our consultants are not admitted attorneys. What we give you is a straight, informed picture of where you stand and what is realistically possible, with no false promises.
Business rescue, answered
What is business rescue?
How is business rescue different from liquidation?
What is the moratorium in business rescue?
Does my company qualify for business rescue?
Who can start business rescue?
Will business rescue stop creditors taking action against my company?
What does Consumer Credit Law do in a business rescue matter?
Do not wait for the liquidation papers.
If your company is under pressure, an early, honest conversation costs nothing and can change what is possible. Tell us where you stand and we will give you a straight read on your options.
Honest assessment. Acting for you, never against your business.