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SOS for business rescue

04 September 2013   (0 Comments)
Posted by: Author: Mazars
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Author: Mazars (Moneywebtax)

The Companies and Intellectual Property Commission (CIPC) recently released some interesting figures relating to Business Rescue in South Africa. The statistics indicate that companies are, in fact, benefiting from Chapter 6 of the Companies Act 71 of 2008 that came into effect in 2011.  This is reflected in the 24.5% decrease in the number of voluntary liquidations and 16.8% reduction in compulsory liquidations in 2012.

"Initially, unfavourable tax demands, stringent legal regulations, unviable business plans and the skills-set of the appointed practitioners, contributed to the low success rate of business rescue attempts," says Daniel Terblanche, Business Rescue Services Director at global audit, tax and advisory firm Mazars.

The success rate for businesses that applied for Business Rescue during 2012 was just eight percent. The latest statistics circulated by the CIPC shows that the real rate of success of all businesses that have concluded their rescue operations, is between 12% and 15%.  

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Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.


The Act requires that a minimum academic and practical requirments be set to register with a controlling body. Click here for the minimum requirements of SAIT.

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