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LML4806 ASSIGNMENT 02 ANSWERS semester 1 2024. This document contains well answered and unique answers that will help you score a very good mark, contact 0/6/7/1/1/8/9/0/5/9 for further assistance.$2.84
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LML4806 ASSIGNMENT 02 ANSWERS semester 1 2024. This document contains well answered and unique answers that will help you score a very good mark, contact 0/6/7/1/1/8/9/0/5/9 for further assistance.
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Course
LML4806 (LML4806)
Institution
University Of South Africa (Unisa)
1.1 Explain what business rescue is and indicate the circumstances in which business rescue proceedings may be used. (5)
Business rescue, as defined by Section 128(1)(b) of the Companies Act 71 of 2008 are proceedings aimed at facilitating the rehabilitation of a company that is financially dist...
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, QUESTION 1
1.1 Explain what business rescue is and indicate the
circumstances in which business rescue proceedings may be
used. (5)
Business rescue, as defined by Section 128(1)(b) of the Companies Act 71 of 2008
are proceedings aimed at facilitating the rehabilitation of a company that is financially
distressed by providing for – the temporary supervision of the company, and the
management of its affairs, business, and property, by a business rescue practitioner;
a temporary moratorium (stay) on the rights of claimants against the company or in
respect of property in its possession; and the development and implementation if
approved, of a business rescue plan to rescue the company by restructuring its
business, property, debt, affairs, other liabilities and equity (section 128(1)(b). 1
A company should commence business rescue proceedings at the first signs of it
being financially distressed, within the meaning of the Act. That is, either when it is
reasonably unlikely that a company will be able to pay its debts when they fall due
for payment in the immediately ensuing six months or when it is likely that the
company will become insolvent in the immediately ensuing six months. 2
1.2 Advise Jane and Steven how business rescue proceedings
may be commenced and indicate whether Jane and Steven, in
their capacity as employees, would have any means of
ensuring that the business rescue proceedings are
commenced.
There are two ways in which business rescue proceedings may be initiated, the first
one is by way of a resolution by the board of directors of the company in terms of s
129 of the Companies Act 71 of 2008 (the Act) and the second one is by way of
application to court by an affected person3.
In terms of section 129(1) of the Companies Act 71 of 2008, business rescue
proceedings will commence: When the board of the company resolves by means of
1
Section 128(1)(b) of the Companies Act 71 of 2008.
2
Section 128(1)(f) of the Companies Act 71 of 2008.
3
s 131 of the Act
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