Business rescue can save jobs, preserve supplier relationships and give a struggling company breathing room, since creditors generally can't pursue legal action while it's under rescue. But it's not automatic protection — the rescue plan needs creditor buy-in, and if it fails, the company can still end up in liquidation anyway. Understanding this option early, rather than waiting until the company is already insolvent, is what makes it useful.
Source: Companies and Intellectual Property Commission (CIPC)
Frequently Asked Questions
Who can put a company into business rescue?
The company's own board can resolve to do so, or creditors can apply to court to place the company under rescue.
Does business rescue stop creditors from suing the company?
Yes — a general moratorium on legal proceedings against the company applies once business rescue begins, with limited exceptions.
What happens if the rescue plan fails?
If creditors reject the plan or it can't be implemented, the company typically moves into liquidation, similar to where it would have ended up without attempting rescue.