Liquidation or business rescue: which one fits?
Liquidation closes a company that cannot pay its debts. Business rescue tries to save or restructure a company that may still have a reasonable chance of continuing. The right route depends on whether the business can realistically recover.
Choose liquidation when the business cannot recover
Directors’ voluntary liquidation is usually considered when the company is insolvent and there is no realistic plan to return it to a sustainable position. The directors pass a resolution, the filing is lodged with CIPC and a liquidator takes control of the company’s affairs.
Choose business rescue when recovery may be possible
Business rescue is intended to give a financially distressed company time and professional oversight to restructure its affairs. It may suit a business that has a workable operation, but needs breathing room or a formal plan to deal with debt.
The practical difference
- Liquidation is about closing the company and dealing with its assets and debts.
- Business rescue is about trying to keep the company operating or achieve a better result than immediate liquidation.
- Liquidation places control with a liquidator; business rescue places the company under a business rescue practitioner.
- A company with no realistic path back to solvency may only add cost and delay by choosing rescue first.
This is general information, not advice for a particular company. We check your application before asking you to proceed.
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Apply online. We check the details first and confirm whether voluntary liquidation fits your company.
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