News
The Department of Justice and Constitutional Development
has issued a policy document on the appointment
of liquidators.
South Africa has adopted the UNCITRAL Model Law
on cross-border insolvency as an amendment to the
Insolvency Act 1936.
Currently
before Parliament is a Bankruptcy Act aimed at
covering the insolvency of all types of
entities – private individuals, close corporations,
companies and partnerships.
- Companies
Act 61/1973 – Chapter XIV
-
Close Corporations Act 69/1984 – Chapter
IX
-
Insolvency Act 24/1936
Personal
Insolvency Procedures
Bankruptcy proceedings of individuals
are currently provided for in the Insolvency
Act 1936. A debtor or his/her agent may
petition to the court for the debtor's
bankruptcy or a creditor may petition.
Creditors vote for the trustee. The Master
of the Court presides at the meeting.
The trustee must provide security for
the proper performance of his or her
duties and the cost of the provision
of this security is a cost of the administration.
Remuneration of the trustee is taxed
by the Master.
A debtor can also offer a composition
to his/her creditors.
The Insolvency Act also provides for
the bankruptcy of debtors who are members
of a partnership or who are spouses.
Corporate
Insolvency Procedures
Liquidation (members' voluntary, creditors'
voluntary and court windings up) of companies
and close corporations and judicial management
of companies are available in the law
of South Africa. The statutes were based
on English legislation.
Role
played by Government
The South African insolvency system
is supervised by the Court and the Master
of the Court. No public official fulfils
the role of regulator.
Role
played by private sector practitioners
Private sector practitioners may act
as trustees, liquidators or judicial
managers. It is up to the court to decide
which practitioners are appointed to
particular appointments. There are persons
who are disqualified from taking on specific
appointments but the general criterion
is that the practitioner is a 'fit and
proper' person. The Department of Justice
and Constitutional Development has issued
a policy document on the appointment
of liquidators and there is a panel of
practitioners who may be appointed. For
two years after being added to the panel,
the practitioner must be appointed in
conjunction with a more experienced practitioner.
The insolvency profession is still
developing in South Africa.
Role
played by the Court The
court has a general supervising role in bankruptcy
proceedings as well as making bankruptcy
orders.
The Master and the court have power to oversee
liquidation matters and the work of liquidators.
Does
the insolvency system in South
Africa allow
for:
1.
|
Different
procedures for the insolvency of individuals
and the insolvency of companies? |
|
 |
2.
|
Creditors
to accept an arrangement outside of formal
bankruptcy/liquidation proceedings? |
|
|
3.
|
Priority
payment for employee creditors? |
|
|
4.
|
Priority
payment for taxation debts? |
|
|
5.
|
Automatic
disqualification of directors of failed companies
from managing other companies? |
|
|
6.
|
Recognition
of insolvency proceedings being conducted
in another jurisdiction? |
|
|
7.
|
A
government agency to undertake insolvency
administration work? |
|
|
8.
|
Some
form of licensing of private sector practitioners? |
|
|
9.
|
A
review of the remuneration claimed by an
insolvency practitioner by either a court
or other government regulator? |
|
|
10.
|
A
mandatory scale of fees applicable to insolvency
practitioner remuneration? |
|
|
11.
|
Surveillance
of the work of private sector practitioners
by a government regulator? |
|
|
12.
|
Collation
of insolvency statistics by a government
regulator? |
|
|
|
