Under the Companies Act 71 of 2008, a South African director has a legally enforceable duty to act the moment their company shows signs of financial distress. Financial distress is defined as being unable to pay debts within the next six months or likely to become insolvent within six months. Ignoring this duty can result […]
When a business is facing financial distress, timing and compliance are everything. If your company cannot pay its debts as they become due (commercial insolvency) or if its liabilities exceed its assets (factual insolvency), it is essential to act immediately. Under South African law, directors may incur personal liability if they knowingly allow the company […]
Running a business comes with plenty of highs and lows. But when you’re facing prolonged periods of financial strain, one term you’ll hear often is liquidation. Understanding what liquidation means, when it’s appropriate, and how the process works can make all the difference. What Is Liquidation? In simple terms, liquidation is the formal legal process […]
If you’ve been through sequestration or liquidation, you may be wondering whether you can start afresh in the business world, especially in a leadership role. Can you register a new company? Are you allowed to serve as a director? In South Africa, both sequestration (for individuals) and liquidation (for companies) carry serious consequences, but they […]
