CRS Business Rescue
In-depth analysis of the business rescue provisions contained in Chapter 6 of the Companies Act No. 71 of 2008 and the Companies Amendment Act No. 3 of 2011

Section 133: General moratorium on legal proceedings against company

as amended by section 84 of the Companies Amendment Act No. 3 of 2011

(1) During business rescue proceedings, no legal proceeding, including enforcement action, against the company, or in relation to any property belonging to the company, or lawfully in its possession, may be commenced or proceeded with in any forum, except—

(a) with the written consent of the practitioner;

(b) with the leave of the court and in accordance with any terms the court considers suitable;

(c) as a set-off against any claim made by the company in any legal proceedings, irrespective of whether those proceedings commenced before or after the business rescue proceedings began;

(d) criminal proceedings against the company or any of its directors or officers;

(e) proceedings concerning any property or right over which the company exercises the powers of a trustee; or

(f) proceedings by a regulatory authority in the execution of its duties after written notification to the business rescue practitioner.

(2) During business rescue proceedings, a guarantee or surety by a company in favour of any other person may not be enforced by any person against the company except with leave of the court and in accordance with any terms the court considers just and equitable in the circumstances.

(3) If any right to commence proceedings or otherwise assert a claim against a company is subject to a time limit, the measurement of that time must be suspended during the company’s business rescue proceedings.

Comments on amendment

The addition of section 133 (1)(f) means that the moratorium is not applicable in the case of proceedings by a regulatory authority in the execution of its duties after written notification to the business rescue practitioner.  This raises the fear that there will be no moratorium on SARS collecting taxes owed to it.


Business rescue legislation

Other legislation cited by Chapter 6


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Business rescue provisions in the Companies Acts and Regulations

Business rescue provisions in Chapter 6 of the Companies Act No. 71 of 2008 pdf (323k).

Ondernemingreddingbepalings in Hoofstuk 6 van die Maatskappywet No. 71 of 2008 pdf (333k).

Business rescue provisions in Chapter 6 of the Companies Amendment Act No. 3 of 2011 pdf (279k).

Business rescue provisions in Chapter 6 of the Companies Amendment Act No. 3 of 2011 (English/Afrikaans version) pdf (792k).

Business rescue provisions in Chapter 6 of the unofficial LexisNexis Consolidated Companies Act pdf (105k).

Business rescue provisions in Chapter 6 of the Companies Regulations, 2011 pdf (62k).

Companies Acts and Regulations

Companies Act No. 71 of 2008 pdf (829k).

Mastskappywet No. 71 of 2008 pdf (545k).

Companies Amendment Act No. 3 of 2011 pdf (2 000k).

Companies Amendment Act No. 3 of 2011 (English/Afrikaans version) pdf (5 920k).

Unofficial LexisNexis Consolidated Companies Act pdf (945k).

Companies Regulations, 2011 pdf (951k).