Experts behind the Practical Accountancy Loose Leaf Service say if your company or CC is in financial distress and needs rehabilitation, business rescue is your salvation
Basically it means that, if your business is insolvent and you're still trading, you can restructure and reorganise it through business rescue.
The first step to follow when you apply for business rescue is that you and your board of directors must pass a resolution that says you want to start business rescue procedures.
Check out this article, it contains all the five steps you must take to apply for business rescue.
Another important part of business rescue is your company must appoint a business rescue practitioner. He'll investigate your business affairs, processes, property and financial position and draft a plan to get your company out of financial trouble. (In terms of the law, he has three months to turn your business around.)
You'll get temporary company and management supervision to get your affairs in order;
There will be a moratorium in respect of creditors. This will give your business breathing space to work out a rescue plan without the ongoing pressure from creditors; and
You'll have a business rescue plan that details how to get into a better cash flow position.
There you have it. If you find yourself in Ellerines' shoes, business rescue is an option.
Now that you have a basic idea of how it works, we recommend you check out the Practical Accountancy Loose Leaf Service. It'll tell you how to appoint a business rescue practitioner, explain your duties during business rescue and so much more.