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Article by listed AttorneyNanika Prinsloo

Read Also: Who can act as a Business Practitioner


Once appointed and licensed by CIPC (The Commercial and Intellectual Property Commission), the Business Rescue Practitioner has, during the Company’s Business Rescue Proceedings, certain powers and duties.

The Business Rescue Practitioner (“The Practitioner”):

(a)    has full management control of the Company in substitution for its Board and pre-existing management;

(b)    may delegate any power or function of the Practitioner to a person who was part of the Board or pre-existing management of the Company;

(c)     may remove from office any person who forms part of the pre-existing management of the Company; or

(d)    may appoint a person as part of the management of the Company, whether to fill a vacancy or not. (there are requirements however as to who may be appointed by the Practitioner).


The Business Rescue Practitioner is responsible to develop a Business Rescue Plan – in other words a Plan on how the Company is going to be rescued.  This Plan must be considered by “affected persons”. As we will discuss later, this plan must be discussed at a meeting to be held with affected persons.


During a Company’s Business Rescue Proceedings, the Practitioner is an officer of the Court, and must report to the Court in accordance with any applicable rules of, or orders made by the Court.

 The Practitioner also has the responsibilities, duties and liabilities of a director of the Company.


During the Business Rescue Process of the Company, the Practitioner is not liable for any act or omission in good faith in the course of the exercise of the powers and performance of the functions of Practitioner; but may be held liable for any act or omission amounting to gross negligence in the exercise of the powers and performance of the functions of Practitioner.

 The Practitioner may not be appointed as the liquidator of the Company if the Business Rescue Process fails and the Company is liquidated.

Investigation of affairs of the Company

As soon as it is possible after being appointed, the Practitioner must investigate the Company’s affairs, business, property, and financial situation.  Once the Practitioner has done this, he /she must consider if there is any reasonable prospect of the Company being rescued.

The Practitioner finds that the Company cannot be rescued

 If, at any time during Business Rescue proceedings, the Practitioner concludes that there is no reasonable prospect for the Company to be rescued, then the Practitioner must inform the Court, as well as the Company, and all affected persons of this fact.

The Practitioner must then apply to the Court for an order to discontinue the Business Rescue proceedings and the Company must be placed into liquidation.

 If there no longer are reasonable grounds to believe that the Company is financially distressed, the Practitioner must inform the Court, the Company, and all affected person.  

 If the Business Rescue process was confirmed by a court order, or initiated by an application to the Court, as opposed to a resolution by the Board, then the Practitioner must make application to the Court for an order to terminate the Business Rescue proceedings.  If not, then the Practitioner must file a notice of termination of the Business Rescue proceedings with CIPC.

The Practitioner finds voidable transactions or reckless trading

If the Practitioner finds evidence which indicate that, before the Business Rescue proceedings began, that the Company entered into voidable transactions, or finds that the Company or any director of the company failed to perform any material obligation relating to the Company, then the Practitioner must take any necessary steps to rectify the matter and may direct the management of the Company to take appropriate steps to fix the problem.

If the Practitioner during his/her investigation finds that any of the directors traded recklessly or committed fraud, or contravened any other law relating to the Company, then the Practitioner must  forward the evidence to an appropriate authority for further investigation and possible prosecution.  Apart from this, the Practitioner must also direct the management to take any necessary steps to rectify the matter, including recovering any assets of the Company that may have been misappropriated.

 Directors must assist and co-operate with the Practitioner

 Each director of a Company placed under Business Rescue must, as soon as possible after the business rescue proceedings has begun,  deliver to the Practitioner all books and records that he/she has in his/her possession and which relate to the affairs of the Company.   If a director knows where other books/records that relate to the Company are being kept, such a person must inform the Practitioner where it can be found.

Also, within five business days (the Practitioner can allow a longer period) after Business Rescue proceedings  have begun,  the directors of a Company must provide the Practitioner with a statement of affairs containing, at a minimum, particulars of any material transactions which occurred during the twelve months before the Business Rescue proceedings began.

Further, the directors must provide the Practitioner of a list of the assets and liabilities of the Company as well as its income and expenses, also for the preceding twelve months. 

The Practitioner must also be provided of details of the following information by the directors:

(a)   the number of employees, and any collective agreements or other agreements relating to the rights of employees;

(b)   a list of any debtors and their obligations to the company; and

(c)    any creditors and their rights or claims against the company.


The Practitioner is entitled to charge an amount to the Company for the remuneration and expenses of the Practitioner in accordance with the tariff prescribed in terms of the Companies Act. We are not going to discuss the amounts in this article.

 The Practitioner may propose an agreement with the Company providing for further remuneration, additional, to be calculated on the basis of a contingency (as it occurs) related to the adoption of a Business Rescue plan at all, or within a particular time, or the inclusion of any particular matter within such a plan; or the attainment of any particular result or combination of results relating to the Business Rescue proceedings.  


Within ten business days after publishing a Business Rescue Plan, the Practitioner must convene and preside over a meeting of creditors and any other holders of a voting interest.  The meeting held in terms of Section 151 is to determine the future of the Company and must be called by the Practitioner for the purpose of considering the plan.

Before the meeting is held, the Practitioner must give notice of the meeting to all affected persons at least five business days before the meeting.

This notice of the meeting must set out:

(a) the date, time and place of the meeting; 

(b) the agenda of the meeting; and

(c) a summary of the rights of affected persons to participate in and vote at the