16 C
Mossel Bay
29th May 2023
Community & LivingUncategorised

Does your business have a fever?

You may be missing some critical distress signals in your business that may put your business in intensive care or even worse, in the morgue! What symptoms do I look for and what remedies can be applied?
The Companies Act no 71 of 2008 defines a Company that is in financial distress as follows:
if it appears to be reasonably unlikely that the company will be able to pay all of its debts as they fall due and payable within the immediately ensuing six months; or
it appears to be reasonably likely that the company will become insolvent within the immediately ensuing six months.
One can translate this into a few practical questions:
1. Does your business have enough cash to pay its suppliers, staff and SARS as and when their payments become due from the profits generated by the business?
2. Should one or two of the main customers of your business close down and not be able to settle their accounts, will your business be in a position to pay all of its expenses and continue trading?
3. Are all your SARS submissions and payments up to date?
4. Does your business meet all Regulatory requirements, including those specific to your industry?
5. As per the requirements of the Labour Relations Act, does your business have personnel files for all staff members including owners and managers that are employed by your business, containing leave applications, disciplinary procedures and induction documents?
If your answer is NO to any of the questions above, your business may be destined for troubled times and on its way to either intensive care or even worse, the morgue. Should your business fall within the Companies Act definition of financial distress, the Companies Act stipulates that there is an obligation on the Business Owner of a distressed company, to take the necessary remedial action through a Business Rescue process.
Rauch Gertenbach Attorneys Inc. have a team of specialists with an impeccable record of successful Business Rescues available to assist and advise on your unique set of circumstances.
Simple tips that can be followed:
Know and understand the financial drivers and numbers in your business, daily, weekly, monthly;
Cash is King – and that does not mean profit! Is your cash flow positive?
Have a clear business- and strategic plan in writing, that provides guidelines of the “Who”, “What”, “Why” and “How” questions in your business;
Make swift and brutal decisions where necessary;
Get the advice of a specialist to help you make the correct decisions in your business going forward.
For more information, please contact Danie Acker or Basson Piek at Rauch Gertenbach Attorneys Tel 044 601 9900

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