Business Liquidation in South Africa
We assist South African companies with their liquidation process. We work with the most experienced attorneys and companies to ensure you are taken care off.
Business Liquidation in South Africa
Operating a business in the South African context requires a dedicated effort, at times causing business owners to be the last to benefit from business returns. Over and above the workplace and business performance stressors, business owners and leaders require a second set of entrepreneurial skills namely to manoeuvre the business between external threats in order to cope with financial responsibilities. The global performance and trends of both finances and a generally negative workforce is causing severe constraints on a business to deliver maximum output. This is impacting upstream (suppliers to the business and downstream (Customers) everybody is experiencing the impact of a rotten economy.
Over and above the stressors mentioned above we are now faced with a new phenomenon – Corona Virus (Covid-19). This caused a forced NATIONAL shut-down and will result in businesses who will never recover from the severe impact it is having.
WHAT NOW? – There are salaries that must be paid, rent, telephone, interest paid on the bank overdraft, etc. – not even to mention SARS.
When the situation arises where the financial responsibilities exceeds the projected income, with no long-term solution expected, the owner/s and/or directors/members of a distressed company need to act with the highest priority. Take care to protect yourself against any sub-standard business deals and further debt which cannot be afforded in the long run. When the business is insolvent it is the end of the road – any deal, hence it be re-financing or buying into the business will impact on you personally in the future.
It is recommended to urgently discuss the situation with your financial advisor (Accountant), and to follow the guidance provided by the professional. When the decision is
reached to liquidate the business, it is important to act fast with the help of professionals.
1: Members Volunteer
If all the members can agree that there is a financial problem, and a special resolution is taken.
2: Creditor Force
Creditors lodge a case against the CC or Company. This is a lengthy process with great financial implications.
Our service providers have successfully completed over 3 760 liquidations over the last 20 years.
Will I be held personally responsible? – SURETY:
There is no personal liability for directors when the liquidation process commences and is completed, unless the director signed surety.
Personal responsibility is directly dependent on the context of the business debt. The mix of supplier debt, overdraft facility, vehicle or credit cards facilities from financial institutions will determine the personal responsibility. In a nutshell, most businesses do have creditors, hence, it be suppliers or financial institutions. Normally credit is supported by signing surety in a personal capacity.
With the above in mind it is needed to accept that personal liability is part of the liquidation process. We can assist with action plans to cope with these additional or “new” stressors in the process.
What About SARS?
Without any doubt – SARS debt is keeping you awake! We all get terrified when we think about this debt, as we are constantly reminded that this is a criminal offence to owe SARS money.
Running a business is a delicate balance of how we apply our available funds – in tough times, do we pay SARS or the employees and creditors? A decision, accompanied by severe stress, that is mostly made monthly by business owners, as own customers fail to pay on time. There is no option, we are forced to take the risk, hoping that the business will change the following month – that big contract is coming in next month – unfortunately in most instances that never happens. It is the simple cause for us to fail. This is a vicious circle that never ends once it started.
Note: – If you have money available, you have to pay SARS.
When the decision is made to liquidate, SARS forms part of your creditors.
What happens to our Assets
Unfortunately, there will be some heartache involved with the process. Especially when trusted and beloved employees are subjected to the process.
Fortunately, for the business, and unfortunately for the employees, there will be no cases made against the employer. At best, the appointed curator will be in contact with them and will deal with outstanding issues forward. As a business owner/director you are exempted from this process, saving you additional headaches.
Staff & CCMA
Unfortunately, there will be some heartache involved with the process. Especially when trusted and loved employees are subjected to the process.
Fortunately for the business and unfortunately for them there will be no cases made against the employer. At the best the appointed curator will be inContact with them and will deal with outstanding issues forward. As a business owner/director you are exempted from this process, saving you additional headaches.
Our Standard Liquidation Process
Step 1: Contact us
NB! – There is no need to have a physical contact session (meeting). Everything can be done on e-platforms and telephonically. Therefore, preventing unwanted exposures i.e. Coronavirus (Covid – 19).
Once you have decided that liquidation is the way forward, we will provide you with the liquidation package.
Step 2: You complete the package
You need to follow the simple steps as listed in the package, once completed it must be returned to our offices.
We proceed with drafting the legally required documentation. After approval and signature, we lodge the application on your behalf. Please note: We are not limited by judicial boundaries and can assist you nationally and, under complied circumstances, internationally.
We further assist our clients with the notifications to creditors where needed and assist with the process when the curator is appointed.
It is that simple, you decide, and we guarantee your success.
Frequently Asked Questions
More info please read the Companies Act 2008 (Act no. 71 of 2008)
Is liquidation expensive?
It is a known fact that there are individuals that charges exorbitant amounts to assist clients with the liquidation process. We have mastered the process and do not need the assistance of multiple third parties to conclude your application, resulting in massive cost savings.
Can I start a new business?
For sure you are allowed to start a new business. Even if you have successful businesses and need to liquidate another underperforming business, the successful ones will not be affected.
What happens to a partner’s credit record?
In essence no credit record is affected, unless surety is signed by a person and such person cannot deal with the debt.
What happens to my personal debt?
Debt out of the liquidation process, i.e. by signing surety, will become the person’s responsibility who signed the surety. Should such a person opt to sequestrate, all debt will be involved with the process.
Need more information about Liquidation?
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100% Success Rate
- 100% 100%
With over two decades of experience, it makes it easy for us to say we have a 100% success rate. If your case is not successful, we guaranteed your money back. Please note: It is imperative that all steps given to as a client must be followed, and all documentation thoroughly read, as it is vital to ensure the success of your case.