Need to apply for business rescue? Follow these five steps

'Over 3 766 businesses are liquidated every year in South Africa,' says the Practical Accountancy Loose Leaf.

This number is high considering that business rescue procedures have been put in place to help prevent liquidations from taking place in the first instance.

Earlier, we revealed when you should apply for business rescue. Now we'll give you the five steps you need to follow to apply for business rescue.

Five steps to follow when you apply for business rescue

Step # 1: You and your board of directors must pass a resolution that says you want to start business rescue procedures.

Step # 2: Fill in a within five working days of passing the resolution and submit your form at your nearest Companies and Intellectual Property Commission (CIPC) offices.

You must also include certified copies of the directors' IDs when you submit this form.

Step # 3: Publish a notice of the resolution in the newspaper. This notice must include a sworn statement that describes the business rescue proceedings to all affected parties.

Step # 4: Appoint a business rescue practitioner two days after you've filed business rescue proceedings. After this, fill in a and submit it to the CIPC. This form notifies notify the CIPC that you've hired a business rescue practitioner.

Step # 5: Publish another notice in the newspaper to announce the person you've hired as a business rescue practitioner. You must place this notice within five days of appointing him.

Knowing the steps you need to take to apply for business rescue will help ensure you manage your company's financial situation with tact.

Enjoyed this article? Subscribe to receive these free articles in your inbox daily.