In Gauteng’s competitive and unpredictable business climate, financial distress can arise fast—from retrenchments and energy disruptions to supply chain breakdowns and post-pandemic recovery slumps. For companies on the brink, business rescue and liquidation remain two key legal options designed to offer structure, compliance, and closure. This guide explores both, grounded in current legislation and sector realities.
⚖️ What Is Business Rescue?
Business rescue is a formal reorganisation process governed by Chapter 6 of the Companies Act 71 of 2008. It offers viable but financially distressed companies time to restructure operations and debt under the supervision of a court-appointed practitioner—while temporarily suspending creditor actions.
Key Features:
- Legal protection from creditors
- Continued operations during rehabilitation
- Preservation of jobs, assets, and supplier relationships
- Opportunity to restore solvency without winding down
📌 Gauteng Case Examples:
- Edcon Group (Johannesburg): Entered business rescue in 2020; Jet Stores division was acquired and continues operating successfully
- African Bank (Midrand): Went into curatorship (a rescue-type intervention) in 2014 and returned to profitability
- Group Five subsidiaries (Bedfordview): While the parent company was liquidated, divisions like Everite were preserved through structured sale
🕳️ What Is Liquidation?
Liquidation is the legal dissolution of a company that can no longer meet its debt obligations. Governed by the Insolvency Act 24 of 1936 and the Companies Act, it enables creditors to recover value through asset sales, while directors exit in a compliant and structured manner.
Key Considerations:
- May be voluntary (initiated by directors) or compulsory (court-ordered)
- Limits directors’ exposure to personal liability for reckless trading
- Asset proceeds used to pay creditors based on priority
- Employees are entitled to UIF and severance under the Labour Relations Act 66 of 1995
📌 Regional Insight:
Manufacturing and logistics firms in Pretoria affected by Eskom-related delays and supplier collapse have increasingly opted for liquidation as a compliant exit route.
📊 Business Rescue & Liquidation Trends (2021–2025)
🗓️ South Africa Overview
| Year | Business Rescue Filings | Liquidations (Total) | Insights |
| 2021 | 257 | ~1,973 | Rescue filings peaked; Gauteng led with 67% |
| 2022 | ↓ Decline | ↑ 44.8% YoY increase | Late intervention reduced viability of rescues |
| 2023 | ↑ Uptick in rescues | ~1,657 | Agriculture, mining, and manufacturing sectors under strain |
| 2024 | ↓ 6.4% liquidations | 1,551 | Retail and tourism sectors most affected |
| 2025 (YTD) | Ongoing rescue filings | ↑ 32% in compulsory | 33 compulsory liquidations so far; voluntary filings remain common |
🏭 Gauteng Snapshot
- Most filings come from private companies (69%), followed by close corporations (29%)
- Sectors affected: retail, manufacturing, construction, aviation
- July 2021 unrest led to R1 billion in government relief funding, preserving 8,000 jobs across 77 Gauteng-based firms
🧠 Final Insight
Choosing the correct course of action, be it business rescue or company liquidation, requires timing, legal awareness, and careful assessment. Companies that act early, consult compliant resources, and align with professional support often preserve more than just profit. They protect people, reputations, and long-term viability.
📞 For more information about the Business Rescue and Liquidation in Gauteng or to explore whether it may be appropriate in your circumstances, you can contact Insolvency Care or reach out via WhatsApp at 073 071 3809 for a confidential discussion with a registered consultant.
Disclaimer: The article is for informative purposes only. It does not serve as legal advice, nor is it intended as such. Please speak to one of our panel attorneys before relying solely on the information herein to make any decisions.