Business Rescue was discussed in various lights. We explained its benefits, functions, and impact in relation to the business assistance services they offer. Additionally, their policies and corporate restructuring plans that they implement were also discussed. View these articles here.

This article will explore the business rescue procedure in detail. From the time that the company recognises that the need for business rescue services to their conclusion.

The Company’s Recognition of the Need for the Business Rescue Procedure

The company and its members need to recognise that its financial state is non-viable or “distressed”. The involved parties must also recognise that there is a reasonable prospect for business rescue proceedings to resolve this.

Once recognised, the board of the company must willingly pass a resolution to begin the business rescue procedure. The registrar files and processes the resolution.

The “Notice of Resolution” is sent to all parties affected by the company’s financial distress after 5 business days. These parties include the shareholders, employees, and creditors. The courts appoint the business rescue practitioner, who will be providing the business assistance.

After two business days have passed, the filing of the Notice of Appointment of Practitioner occurs. The notice is sent to all affected parties after a further five business days have passed. After this point, a court order must commence in order to begin the rescue process itself (Implementation of corporate restructuring, etc).
Be aware, the company must file the resolution and notify the affected persons or the resolution will become void. This means another resolution can only occur after a period of three months.

The Courts Recognition of a Need to Enact Business Assistance

A court may also recognise that a company is financially distressed with a reasonable prospect for rescue. An affected person must submit an order to the court in order to commence with the business rescue proceedings.

After this has been done, affected parties must receive a notice a notice. The company and commission also receive a copy. After this, the order for the business rescue procedure goes ahead.

After 5 business days, a Notice of Order will be sent to all affected parties. A notice of appointment of Practitioner is file, who will provide the business assistance services. After 5 business days, the Notice of Appointment of Practitioner will be sent to all affected parties.

Timeline of BRP, and Implementation of Corporate Restructuring

The company directors must provide the practitioner with all the financial books and records of the company. This must occur as soon as is practical after submitting and processing the resolution or court order. The company directors must provide the Practitioner with all the financial books and records of the company. The Practitioner must then investigate the financial affairs and standing of the company in question. This marks the beginning of the business rescue proceedings.

The company director must provide the Business Rescue Practitioner with a letter of the statement of affairs. 10 business days after the practitioner’s appointment, he/she will attend the first meeting of creditors. Additionally, they will attend the first meeting of the parties representing the employees.

25 business days after the appointment, the practitioner must prepare a rescue plan. This involves management changes, corporate restructuring, and more. The company will then publish the plan. After 10 business days, a meeting will take place and a vote decides upon the adoption of the rescue plan.

After approval, the practitioner will implement it. This occurs to a degree that allows them to file a Notice of Substantial Implementation. Which will bring the business rescue proceedings to the final phase.

If rejected, one of several courses of action are available. The practitioner may seek a vote of approval to prepare a revised plan that is more in line with the interests of the affected parties. Alternatively, he can advise the meeting that the company must apply to the court to set aside the result of the vote. This precedes the final phase of the business rescue procedure.

Conclusion of the Process

The rescue proceedings conclude after one of several events have occurred:

• After the implementation of the business assistance, such as corporate restructuring, changing strateges, etc, and the Notice of Substantial Implementation has been filed.
• A court order that sets aside the resolution or court order that began the proceedings in the first place.
• A court order has converted the business rescue proceedings into a liquidation after it has been determined that there is no longer a reasonable prospect for business rescue.
• Effecting a Notice of Termination of the rescue proceedings with the commission for a specific reason. Eg, discovery of fraudulent business practices on part of the company.
• The proposal and rejection of the business rescue plan without the proceedings being extended.

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