Directors’ duties to a company when considering business rescue
Should directors neglect their duties by continuing to operate without proper consideration for a weakening financial position, they could be held liable for the losses as a result.
Schindlers Attorneys explains more in this story https://www.schindlers.co.za/2020/directors-duties-to-a-company-when-considering-business-rescue
With the enactment of the Companies Act 71 of 2008 (the “Act”) and the introduction of business rescue proceedings, ‘rescue culture’ has become solidified in South African company law.
What is business rescue?
Business rescue is a process which aims to recover and preserve financially distressed companies. When considering whether a business should be placed into business rescue, there are two main considerations that must be had, namely whether the company is financially distressed and whether there are any reasonable prospects of the business once again being profitable.