CRS Business Rescue

In-depth analysis of the business rescue provisions contained in the Companies Regulations

Regulation 133: Qualifications for person to be appointed as practitioner

(1) Within two years after the effective date, the Board must recommend to the Minister minimum qualifications for accreditation of persons as business rescue practitioners.

(2) Until the promulgation, by regulation, of minimum qualifications contemplated in sub-regulation (1), a person may be appointed as the business rescue practitioner of a company if—

(a) the company is a state owned or public company, or a company that is required, in terms of Regulation 29(1)(a) or (b), to have its annual financial statements audited, and the person—

(i) is an attorney, who has been admitted to practice as such for at least 10 years, and has engaged predominantly in commercial practice during that time;

(ii) is a member in good standing of a professional body that is a member of the International Federation of Accountants, who has been admitted to practice as such for at least 10 years, and has engaged predominantly in commercial practice during that time;

(iii) is a practising liquidator, or business turn-around practitioner, registered as such for at least 10 years; or

(iv) has a recognised degree in law, commerce or business management, and has at least 10 years experience in conducting business rescue proceedings; or

(b) the company is a company not contemplated in paragraph (a), and the person has at least 5 years standing or experience in respect of any of the qualifications set out in that paragraph.

(3) If a juristic person or partnership is appointed as the business rescue practitioner of a company, ~~auditor,~~ the individual determined by that juristic person or partnership to be responsible for performing the functions of practitioner in terms of Chapter 6 of the Act must satisfy the requirements of this regulation.

Note: These draft business rescue regulations will be replaced by new draft regulations - publication date by government unknown.

Regulation 29

(1) In addition to public companies and state owned companies, a company that falls within any of the following categories with respect to any particular financial year must have its annual financial statements for that financial year audited:

(a) Any profit or non-profit company if, in the ordinary course of its activities, it holds assets in a fiduciary capacity for a broad group of persons who are not related to the company, whether it does so –

(i) as its primary activity; or

(ii) incidental to its primary activity in any manner contemplated in terms of section 65 (2) of the Consumer Protection Act, 2008.

(b) Any non-profit company, if it –

(i) was incorporated -

(aa) directly or indirectly by the state, an organ of state, a state-owned company, an international entity, a foreign state entity or a foreign company; or

(bb) primarily to perform a statutory or regulatory function in terms of any legislation, or to carry out a public function at the direct or indirect initiation or direction of an organ of the state, a state owned company, an international entity, or a foreign state entity; or

(ii) it solicits or accepts donations from the general public and –

(aa) its assets, as reported on its annual financial statement for the immediately preceding year, exceeded R 60 Million; or

(bb) its current expenditures, as reported on its annual financial statement for the immediately preceding year, exceeded R120 million.

(c) Any profit or non-profit company that is subject to a compliance notice, in accordance with Regulation 32 (5)(b)(ii), requiring it to have its annual financial statement for that particular year audited.