A Critical analysis of section 129 of the companies act 71 of 2008
Barends, Richard Heinz
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A company forms an important part of a community in which it conducts business. It, therefore, has a direct impact on the economic and thus the social well-being of that community through its employees, suppliers and distributors. Consequently, the failure of a company has a large effect on society than merely its employees and creditors. In some instances this may lead to companies being liquidated. Granting an order of liquidation, results in the demise of the corporate entity and the attendant loss of jobs. This is further protracted by an unsatisfactory pro rata share in the residue for unsecured creditors, and the abandonment of claims when such are not proved. Having a corporate rescue procedure in place can prevent or even limit the amount of job losses, or provide an alternative measure as opposed to liquidation of companies. Corporate rescue affords a company a second chance, after having once failed, to restructure its financial affairs and once again become a successful concern.