With the sway and stop of our current economic standing, many former successful companies have had to make the hard decision or engaging in business rescue. It is an overwhelming and distressing choice, but, what do we actually understand about business rescue and does it deserve the shivers of apprehension that usually accompanies its mention? Let’s take an abridged look at business rescue is its simplest form.
Business rescue is the process of aiding a financially failing company with its restructure
, varying from overseeing the company as a whole; the reorganization of their finances, or the overall running of the business until such a time that decisions are made and actions taken regarding the business.
The business rescue process is ultimately just that, a process – it is the understanding and review of the company’s financial and administrative functions and coming to a conclusion that either the company, with changes can continue to do business profitably, or if it is best that the company liquidates.
Q: What is the role of a business rescue practitioner? A: A business rescue practitioner is a person appointed to overseeing and temporarily managing the company. This includes all financial decisions and responsibilities as well administrative functions.
Q: Who would business rescue assist? A: According to the companies act, business rescue would best suit any company in financial distress. Financial distress can be identified as when a company’s income flow is less than that of its expenses and is unable to meet the company’s necessary financial obligations.
Q: Why would it be a good opportunity for companies in need? A: Because it is more a restructure than a shutdown, there is opportunity and hope that a once flailing company can return to its profitable state and continue to operate, securing it’s product or services supply and demand and its staff in employment.
For more of a detailed read and insight into business rescue and its practitioners, click the link below
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