When to Liquidated a Business in South Africa.
WHEN MUST A DIRECTOR OF SHAREHOLDER APPLY FOR LQIUIDATION
ARE DIRECTORS UNDER OBLIGATION TO PUT THE COMPANY UNDER RESCUE OR IS IT A
CHOICE UNDER THE NEW COMPANIES ACT!
S129(7) (As amended by Sec 82 of Act 3 of 2011)
If the board of directors of a company has reasonable grounds to believe
that the company is financially distressed, they must either.
•Put the company under business rescue, or.
•Deliver a written notice to all shareholders, creditors,
employees, and trade unions, that the company is financially distressed,
and give reasons why the company is not put under Rescue
•The new companies’ act’s profound influence on the
liability of Members and Directors:
•The new Companies Act No. 71 of 2008 came into effect on
May 1, 2011. Before the New Law came into effect, the Old Companies act
placed no direct obligation on directors and members when A company / CC
were in financial problems.
If the above are not met, it is a criminal offence.