- Title
- A critical analysis of the application of South African business rescue provisions on small to medium enterprises (SMEs)
- Creator
- Peteni, Ushimin https://orcid.org/ 0000-0001-6478-9862
- Subject
- Small business
- Subject
- Business enterprises
- Subject
- Business failures--Law and legislation
- Date
- 2021-09
- Type
- Master's theses
- Type
- text
- Identifier
- http://hdl.handle.net/10353/20328
- Identifier
- vital:45655
- Description
- Small to Medium sized Enterprises (SMEs) play an essential role and can be described as the crucial bread and butter of the South African economy. They have the potential to create employment and skills development opportunities pertinent for sustainable economic growth. The unfortunate part is that South African Small to Medium sized Enterprises have the lowest survival rates in the world, resulting in high rates of business failure and job losses. This is because the South African economy does not favour SMEs, which are often burdened with structural hurdles including access to funding, lack of access to markets, inadequate skills, uncompetitive regulatory frameworks and technological disruptions. A developing economy such as South Africa cannot grow if companies facing financial difficulty are constantly liquidated. This is because the liquidation system does not offer companies an opportunity to restructure and possibly function within the context of raised concerns. In order to facilitate sustainable SMEs growth, the legislature has come up with statutory mechanisms to support SMEs and save them from total liquidation. Most recently, the Companies Act 71 of 2008 Chapter 6 introduces a business rescue mechanism applicable to all business structures established under the Act. The purpose of business rescue is to provide companies in financial distress with opportunities to reorganise, strategize and come up with useful corporate reorganisation measures which are useful and efficient in saving the financially distressed company and possibly yielding a better return for the creditors than would have been the case if the company was liquidated. This new enactment is seen as both an improvement and necessary reform from its predecessor, judicial administration which has widely been condemned as a failure. However, despite this improvement, the application of the current business provisions to SMEs is questionable. Although Chapter 6 of the Act makes provision for SMEs, it also presents a number of stumbling blocks, including the fact that services of business rescue practitioners are out of reach for most SMEs in South Africa. The purpose of this study is to consider challenges faced by SMEs in the practical application of the current business rescue provisions. This study further emphasizes the importance of South African SMEs, whilst looking at their challenges and how the Companies Act 71 of 2008 provisions, regarding business rescue, assists SMEs. The study looks at the impediments of certain provisions of business rescue and proposes recommendations.
- Description
- Thesis (MA) (Laws) -- University of Fort Hare, 2021
- Format
- computer
- Format
- online resource
- Format
- application/pdf
- Format
- 1 online resource (85 pages)
- Format
- Publisher
- University
- Publisher
- Faculty of Law
- Language
- English
- Rights
- University of Fort Hare
- Rights
- All Rights Reserved
- Rights
- Open Access
- Hits: 1120
- Visitors: 1153
- Downloads: 108
Collections
UFH Nelson R Mandela School of Law
| Thumbnail | File | Description | Size | Format | |||
|---|---|---|---|---|---|---|---|
| View Details | SOURCE1 | A CRITICAL ANALYSIS OF THE APPLICATION OF SOUTH AFRICAN BUSINESS RESCUE PROVISIONS ON SMALL TO MEDIUM ENTERPRISES.pdf | 729 KB | Adobe Acrobat PDF | View Details |