The Corona Crisis leads worldwide to critical situations for companies.
In light of this, Digitorney has asked lawyers from various countries specialized in restructuring law for recommendations on what needs to be done and which solutions are at hand to weather the Corona Crisis.
This part of our series focuses on South Africa:
1) When does a company need to file for insolvency in South Africa?
As a general rule, the creditors of a South African company initiate the process of a debtor company’s compulsory liquidation after having demanded payment, but having received none, in the form of a court application. A company may itself apply for the process of voluntary liquidation. MORE
2) What liability risks exist for the management in South Africa in a corporate crisis?
As a result of the national lockdown, many companies are unable to fulfil their contractual obligations, including the delivery of goods, the rendering of services and the payment of outstanding debts. It is recommended that companies review their contractual terms of breach and take steps aimed at mitigating these risks. MORE
3) Is there any state aid available for companies in South Africa due to the Corona crisis?
It is recommended that any South African company in financial dire straits as a result of losing business due to the national lockdown seek assistance from its creditors. South Africa’s banks are currently offering various debt relief options to consumers and businesses alike, aimed at helping consumers and businesses weather the storm. MORE
4) What immediate measures should a company in South Africa take if it is affected by the Corona crisis?
The full extent of the financial impact of COVID-19 on consumers and businesses alike remains unknown. Businesses are urged to ensure compliance with health and safety regulations, travel restrictions and the communications of government. MORE
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