Contact

Surge in struggling SA businesses as liquidations rise by 34.6%

Back to top

Surge in struggling SA businesses as liquidations rise by 34.6%

Vincent Manko, Director in the Dispute Resolution practice, joined Jeremy Maggs on Moneyweb to discuss the importance of business rescue amid a significant surge in liquidations.

25 Apr 2024 06:17 Minutes Radio interview
Surge in struggling SA businesses as liquidations rise by 34.6%

Surge in struggling SA businesses as liquidations rise by 34.6%

Podcast

Surge in struggling SA businesses as liquidations rise by 34.6%

Podcast

00:00 00:00
Download MP3

He explained that companies typically enter liquidation due to an inability to settle debts, exacerbated by current economic challenges such as sluggish trading. Vincent highlighted a 34.6% increase in liquidation cases in January 2024 compared to the previous year.

Vincent emphasised the presence of legal frameworks in South Africa, notably the 2008 Companies Act, which introduced business rescue provisions effective from 2011. Business rescue aims to foster innovation, attract investment, and offer a structured approach to company recovery.

He noted that businesses facing financial distress might choose between liquidation and business rescue based on their solvency status. While insolvent companies should opt for liquidation, those experiencing financial strain without insolvency might benefit from business rescue.

However, Vincent cautioned about the risks involved, such as the potential for businesses to delay seeking rescue until they become insolvent. Additionally, a lack of cooperation among stakeholders, including employees, creditors, and unions, could hinder the success of business rescue efforts.

The information and material published on this website is provided for general purposes only and does not constitute legal advice. We make every effort to ensure that the content is updated regularly and to offer the most current and accurate information. Please consult one of our lawyers on any specific legal problem or matter. We accept no responsibility for any loss or damage, whether direct or consequential, which may arise from reliance on the information contained in these pages. Please refer to our full terms and conditions. Copyright © 2024 Cliffe Dekker Hofmeyr. All rights reserved. For permission to reproduce an article or publication, please contact us cliffedekkerhofmeyr@cdhlegal.com.

You might also be interested in

22 Apr 2024

by Mongezi Mpahlwa

We need business rescue to combat extreme rise in liquidations

Mongezi Mpahlwa, Director of our Dispute Resolution practice joined Tumisang Ndlovu on Newzroom Afrika to discuss the need for business rescue to combat the extreme rise in liquidations.

Business Rescue, Restructuring & Insolvency

09:40 Minutes

10 Apr 2024

by Taryn York and Mapaseka Nketu

Draft Second Amendment to the Immigration Regulations, 2014

On 8 February 2024, the Minister of Home Affairs published the Draft Second Amendment of the Immigration Regulations, 2014 (Regulations) in order to make it easier for foreign nationals to travel to, work from, and conduct business within South Africa. The Regulations were open for public comment until 29 March 2024.

Immigration

2 min read

6 Mar 2024

by Vivien Chaplin and Haafizah Khota

Paycheck Politics: Decoding the Companies Amendment Bill and its impact on executive remuneration

In recent years, there has been a significant global focus on the remuneration of senior executives within companies. This heightened attention is especially pertinent in South Africa, a nation that has consistently ranked among the countries with the highest levels of income inequality in the world. 

Corporate & Commercial Law

5 min read

15 Mar 2024

Earnings threshold

CDH Associate from the Employment Law practice Sashin Naidoo recently joined Gugulethu Mfuphi on KAYA FM to discuss the earnings threshold announcement by the Minister of Employment and Labour.

Employment Law

15:43 Minutes

6 Sep 2023

by Taryn York and Thato Makoaba

South African citizenship is not an automatic right for the children of Non-South African citizens - even if they were born in South Africa!

In the recent decision of Onai Muzore and Another v Minister of Home Affairs and another 4013/2021, the High Court dismissed a review application wherein the applicants challenged the Minister of Home Affairs' (Minister) decision not to confer South African citizenship on their children, who were born in South Africa. In doing so, the court considered how children who were born from Non-South African citizens obtained South African citizenship.

Immigration

4 min read

15 May 2023

by Desmond Odhiambo and Kevin Kipchirchir

The concept of lockouts and how employers may respond to a strike

A lot of discourse within employment circles in Kenya has been about strikes. However, very little has been said about the right of employers to lockout employees.

Employment Law

19:21 Minutes

This website uses cookies to enhance the browsing experience. For more information, please see our Cookie Policy.

Accept Decline