Insolvency Law South Africa | Du Toit’s Attorneys | Gauteng
Insolvency Law – A Business Lifeline in South Africa
Recession has caused hardships that recourse to insolvency law in South Africa could quite possibly have prevented. The common and totally mistaken belief that an insolvent state need be fatal or that it will lead inevitably to a stigma from which a business, particularly a small one, is unlikely ever to recover, is largely responsible for many of the unnecessary hardships experienced by business owners.
The unfortunate result of these widespread misconceptions has been that many of the country’s businessmen and women have been obliged, instead, to submit to the far more dire consequences of voluntary bankruptcy or, perhaps even worse, bankruptcy enforced upon them by their creditors. In either case, the road to financial recovery can often prove to be a long and arduous one that has left many of them unwilling to enter into further ventures, instead, seeking a full or part-time job or facing unemployment.
So what are the advantages offered to business owners by this legal avenue? To understand this we must first understand the conditions that may make such an action necessary.
The insolvent state takes one of two forms. It may either result from an imbalance between assets and liabilities in which the latter exceed the former or it may arise when the cash flow is insufficient to meet a company’s or natural person’s debts as they become due. Though neither state may spell immediate disaster, some action will be necessary to avoid a problem in the longer term.
The nation’s laws provide legal processes that may be followed to ensure that a company, faced with such circumstances, is able to discharge its debts and still continue to trade, without any need to liquidate its assets and close its doors.
To pursue this route, a preliminary financial assessment will be needed, and from the resulting data, a manageable plan to repay debts and meet operational expenses can be drawn up. Du Toit’s Attorneys are experts in these matters and able to negotiate with creditors to arrive at acceptable terms under the insolvency laws of South Africa.
Contact Details:
Website: http://www.dutoitsattorney.co.za
Tel: 012 643 1882
Email: johan@dutoitsattorneys.co.za
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