If you want to sell your business, you need to publish a notice to the effect according to Section 34 of the Insolvency Act No. 24 of 1936. As such, if your business is in trouble and you hope to sell it and from the proceeds of sale, pay off creditors, you need to first speak to liquidation experts.

According to the Insolvency Act, you must publish a notice of intended transfer of goodwill, goods, and property forming part of the business or as security for a debt payment. If you do not do so, the sale is void against your creditors for a period of six months after the transfer has taken place. This also means it is void against the estate trustee in the instance where your estate is sequestrated within the six months. Considering the implications of such, you can agree it is best to speak to liquidation experts first before you sell your business to pay off part of your debts.


The notice is intended to warn creditors of the transfer of the business. This provides the creditors time to claim debts that the business owes them before the business is transferred. It also serves to ensure that the buyer does not end up having to deal with the debts made by the seller. The creditors might find it difficult to hold the buyer responsible for the debts incurred by the seller before sale of the business.

Liquidation experts help to avoid mistakes, such as not publishing a notice of the intention to transfer business. They help you to publish the notice in two issues of an Afrikaans and English newspaper and in the Government Gazette. Such liquidation experts also see to it that the notice is published not more than 60 days and not less than 30 days before the business transfer. If you thus plan to sell your business immediately in order to prevent further losses, first speak to liquidation experts. Such a sale and transfer cannot be done immediately, as you must first publish the notice of intended transfer.


Every liability related to the business is immediately payable. This means that the creditors can demand that you immediately pay such debts.


You can approach liquidation experts to help with an application to liquidate the business. If your business owes substantial amounts, this may be the best route to follow. Keep in mind that you must decide on a last day of trading. Once the decision has been made to liquidate with the help of liquidation experts and the last day of trading is set, you must keep to it. The implication is that you cannot make any payments to creditors from that day forward. If you do, you benefit one creditor over the others. This means that other creditors can object and the creditor that has received the payment may have to give it back.

It thus makes sense to follow the guidance of liquidation experts, even if you just want to close doors and sell the assets of the business. This is true even if your business does not owe money. Make sure you follow correct procedure as to prevent creditors bringing claims against the estate at a later stage.


Once your business is under liquidation, it cannot carry on any trade other than that required for winding up. It is thus essential to make use of liquidation experts whether you want to sell, close down, or voluntary liquidate the business. They help you through the process, ensuring full compliance with all legal requirements.

As part of the liquidation process, a liquidator is appointed to oversee the selling of the assets and distribution of benefits to creditors, as well as the distribution of residue to former shareholders of the business. The liquidator then officially closes the business.

The business is deprived of any contractual rights when it is closed down and deregistered. However, when the business undergoes liquidation, contracts made remain in place. The liquidator decides which contracts to terminate and which ones to keep.

With so many aspects to consider when closing down, selling, or liquidating a business, it is best to seek guidance from our liquidation experts to help avoid legal pitfalls.

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Call on our attorneys for legal advice, rather than relying on the information herein to make any decisions. The information is relevant to the date of publishing.