- Because sequestration is a legally binding process your creditors can’t pursue you any further.
- Your future income is protected as creditors are prevented from garnishee your salary.
- You can repay your remaining creditors, interest free over monthly installments.
- You can address the financial obligations of your everyday living expenses with more ease.
Our Liquidation Services are designed to find debt solutions that suit your financial status
What is Liquidation?
Liquidation is the process in which a company voluntarily declares itself insolvent or where a creditor of the company files an application with the court to have the business declared insolvent. The result of liquidation is that the company may no longer operate its business. If the company conducts business while insolvent, the directors can be held liable for any debt incurred, so to safeguard against this the company must close.
When to apply for Liquidation?
When business owners register a new company, they do so with the intention of setting up and running a successful business. Regrettably, unforeseen situations can negatively impact the business, resulting in outstanding liabilities that are higher than the total value of the company’s assets and income. After a business has exhausted its alternatives, such as business rescue or compromise, and cannot compile a reasonable debt repayment plan with its creditors, it is recommended that the business apply for voluntary liquidation.
The South African Companies Act states that if the directors of a company have reasonable grounds to believe that the company is financially distressed or unable to pay its debts, they must either:
- Place the company under business rescue
- Liquidate the company, or
- Send notice to all shareholders, creditors, employees, and trade unions that the company is experiencing financial problems and explain why the company is not neither liquidated nor placed under business rescue.
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