Frenquently asked questions on Business Rescue and Business Rescue Practitioners.
Yes, additional costs may include legal fees, advisor fees, accounting fees, or operational expenses related to the process and are reasonably due by the business.
The CIPC categorizes Business Rescue Practitioners based on their experience and the size of the business. Please refer to Regulation 128 of the Companies Act for more details.
The Companies Act provides the maximum hourly rate a Business Rescue Practitioner may charge. However, by agreement with the directors and a vote by creditors, a practitioner may charge a monthly retainer as long as it remains in line with Regulation 128 of the Companies Act.
Unlike a liquidator, who dismantles a business to settle debts, a Business Rescue Practitioner focuses on saving the company.
While consultants may offer advice, Business Rescue Practitioner are legally mandated to manage the rescue process and have the authority to implement binding decisions.
The process, in theory, should take no longer than six months, although extensions may be granted. A Business Rescue Practitioner ensures that key milestones, such as the Business Rescue Plan's development, approval, and implementation, are met within the legal timeframe. Please review Section 132 of the Companies Act for more details.
Yes, practitioners must not just be experienced, they must have business rescue experience in your industry, area, and size of business. Ask the practitioner to share case studies or references demonstrating their track record of success in line with your business.
Yes, this is crucial. A practitioner familiar with your industry will better understand the challenges and opportunities specific to your business.
A Business Rescue Practitioner must act in good faith, balance creditors' and stakeholders' interests, and comply with the Companies Act. Most importantly, they must communicate transparently with all affected persons to prepare and publish a Business Rescue Plan (BR Plan).
Regulation 128 of the Companies Act regulates the maximum amount a Business Rescue Practitioner may charge per hour and per day. Further contingencies may be agreed upon by the creditors in terms of Section 143 of the Companies Act.
The starting point would be to address your concerns with the Business Rescue Practitioner directly. You could then report your concerns to the Business Rescue Practitioner's governing body or ultimately seek the practitioner's removal in terms of Section 139 of the Companies Act.
A Business Rescue Practitioner (BRP) is a licensed professional who oversees the business rescue process, helping financially distressed companies restructure their operations, debts, and assets to avoid liquidation.
The Business Rescue Practitioner takes control of the company’s operations, assesses its financial status, communicates with stakeholders, and develops a Business Rescue Plan (BR Plan) to restore its financial health or achieve the best outcome for creditors.
Look for a CIPC-licensed Business Rescue Practitioner, ask the partitioner to show you his licence from the CIPC and his Letter of Good Standing from his governing body.
Yes, one of the conditions for the CIPC to approve the appointment of a practitioner is that the practitioner must verify that they have sufficient capacity to take on your engagement.
No, the practitioner is not obliged to continue assisting the business after the business rescue process has come to an end. However, a practitioner may continue to assist the business in a consultative role without any powers of a BRP, based on an agreement between the business and the practitioner.
