Voluntary Liquidation

Voluntary Liquidation
Businesses and Financial Distress is nothing new in South Africa’s volatile economic environment and as a result the need arose for Company Owner and Directors to seek Professional Debt Services to their specific Financial Problems.

What is Liquidation?
This remedy is available to Business Owners who's Businesses are struggling financially.

The Liquidation of a Company is regulated by certain extracts of the Insolvency Act 24 of 1936 as well as the Company Act, Act 71 of 2008.

Insolvency of a Company is based on the question, can the Company pay its Creditors, yes or no. If the answer is no, and there is no legitimate expectation that this situation will change, the Directors, of such a Company, are committing the Criminal Act, of Reckless Trading.

The Directors of a Company are entitled to Liquidate a Company when they are of the opinion that they are Trading Recklessly. There are different ways to affect such a Liquidation.

Do a Company have to have assets to be able to apply for Liquidation?

No, the company will Liquidate based on the fact that the company is in Financial Disarray and therefore unable to pay its creditors. Because the Company is struggling to pay its creditors they would rather Liquidate than taking part in Reckless Trading and therefore a company do not have to have any assets to apply for liquidation.

How will Liquidation affect the Directors of the company?

If the Directors of the Company signed surety in their personal capacity for any of the Company Debt, the Directors will be liable for those debt in their Personal Capacity.

The best way to get all the answers to your questions relevant to your specific needs will be to contact our office and speak to one of our Debt Specialist. We are happy to answer all your questions.


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