Business rescue and turnaround support for distressed companies
When a South African company is financially distressed, the right response depends on whether the problem is a short-term cash gap, a structural trading issue, or a tax debt that has outgrown the business. This service covers viability assessment, cash-flow recovery, governance and implementation — led by Chad Thompson, a licensed business rescue practitioner. It distinguishes statutory business rescue, informal turnaround and tax-debt resolution so the route follows the facts, not a label.
Three different responses, often confused
Statutory business rescue is a formal process under Chapter 6 of the Companies Act with a duly appointed practitioner. Informal turnaround restructures the business without that appointment. Resolving a SARS debt — a payment arrangement or compromise — is separate again. Choosing the wrong one wastes time a distressed company does not have. The assessment establishes which applies before any step is taken.
Financially distressed, with a reasonable prospect of rescue
A company is “financially distressed” under the Companies Act where it appears reasonably unlikely to be able to pay all of its debts as they fall due over the ensuing six months, or where it is insolvent. Business rescue aims to maximise the chance of the company continuing in existence, or a better return for creditors than immediate liquidation. Whether rescue is viable is a fact-dependent assessment — there is no binary online test, and no outcome is promised.
Financially distressed
A company is financially distressed where it appears reasonably unlikely to pay all debts as they fall due over the next six months, or where it is insolvent. The threshold is fact-dependent, not a single ratio.
Reasonable prospect of rescue
Business rescue aims to maximise the chance of the company continuing in existence, or a better return for creditors than immediate liquidation. Whether rescue is viable is assessed on the facts — no outcome is promised.
A formal statutory process
Chapter 6 of the Companies Act governs the process, overseen by a duly appointed business rescue practitioner. It is distinct from informal turnaround and from resolving a SARS debt.
Signs a board, management team or creditor should act
Distress rarely arrives in one event. These are the signals that warrant a structured review before options narrow.
A structured turnaround engagement
The scope below is advisory and implementation support. Statutory filings and practitioner appointments are undertaken by the correctly authorised person where they are required.
Financial and commercial diagnosis
A structured review of the trading position, debt profile and cash position to establish where the distress originates and whether it is reversible.
13-week cash flow (where data allows)
A short-horizon cash-flow view built from available records to identify the funding gap and the timing of creditor pressure, where the data is sufficient to support it.
Revenue, collection and cost review
Examination of revenue, debtor collection cycles and cost structure to find realistic levers — not generic cuts that damage the business.
Contract and supplier prioritisation
Identifying which contracts and supplier relationships are critical to preserve and where terms can be renegotiated without losing the franchise.
Programme and operating-model recovery
A practicable recovery roadmap covering operations, governance and reporting — calibrated to the size and complexity of the business.
Governance, information and stakeholder engagement
Coordinated engagement with creditors, employees and advisers, with clear management information so decisions are taken on current facts.
Business Rescue & Turnaround Lead
Chad Thompson leads this service as a licensed business rescue practitioner. He is described here as a Business Rescue & Turnaround Consultant. Holding a licence is distinct from being appointed as the practitioner to a particular company’s proceedings; an appointment to a specific company is a separate statutory step. Read his full factual profile for qualifications, programme experience and how he works.
Qualifications & standing
- Advanced Business Rescue Practice (UNISA / LSSA-aligned training)
- Current CIBA membership and business accountancy practice
- Licensed business rescue practitioner status
- Governance and international project recovery experience
Tax-related strengths
- Financial reconciliations and account reconstruction
- Cash-flow and collections reviews against SARS statements
- Tax-debt viability assessment within the wider creditor picture
- Coordinated SARS arrangements under appropriate professional support
Selected programme experience
| Organisation | Scope | Nature of work |
|---|---|---|
| PRASA | R750m distressed programme | Programme recovery and controls work on a distressed public-sector programme. |
| Aon | R50m remediation | Remediation and controls review on a financial-services engagement. |
| Standard Bank | Controls | Controls and governance work within a large banking environment. |
| WesBank | R200m change | Change and controls work on a major vehicle-finance programme. |
| Southern Water (UK) | £1.8bn supplier/contract controls | Supplier and contract controls on a large infrastructure programme. |
These are programme and recovery roles on the named engagements. They are distinguished from formal business rescue practitioner case outcomes, and do not imply that these former clients endorse Tax Relief SA.
A five-stage engagement
The stages describe advisory and implementation support. Where statutory business rescue is indicated, the formal appointment and filings are handled by the correctly authorised person.
- 1
Confidential scoping and authority
A confidential discussion of the entity, the distress signals and who has authority to instruct. No sensitive documents are needed to begin.
- 2
Documents and financial analysis
Once a written scope is agreed, the relevant financial records, SARS position and creditor picture are assembled and analysed.
- 3
Feasible route and responsibilities
A realistic route is identified — informal turnaround, statutory business rescue, tax-debt resolution or another lawful option — with the responsibilities of each party set out.
- 4
Legal / CIPC / BRP interface where needed
Where statutory business rescue is indicated, the formal appointment and filings are handled by the correctly authorised person under the Companies Act.
- 5
Management reporting and execution
Ongoing reporting against the roadmap, with execution support for management and coordinated engagement with creditors and advisers.
Which route fits the facts
The decision is driven by the facts, the management position and the appropriately appointed professionals — not by a preference for one label.
| Route | What it involves |
|---|---|
| Informal turnaround | Restructuring the business — cash flow, costs, contracts and governance — without a statutory appointment. Suitable where distress is operational and the company can still meet debts. |
| Statutory business rescue | A formal Chapter 6 process with a duly appointed business rescue practitioner, a published plan and a moratorium on claims where the Act provides one. Suitable where the company is financially distressed but has a reasonable prospect of rescue. |
| Tax-debt payment or compromise | A SARS payment arrangement or compromise addresses the tax debt specifically, without restructuring the wider business. Suitable where the tax debt is the main issue and the business is otherwise viable. |
| Insolvency / liquidation | Where rescue is not feasible, an orderly winding-up may give creditors a better or equivalent outcome than continued trading. A last resort, assessed against the other routes. |
| Other lawful options | Depending on the facts, other lawful mechanisms may apply. The route is chosen on the facts, the management position and the appropriately appointed professionals. |
What helps, and what to gather
A high-level overview is enough to start the conversation. Depending on the matter, our team may request further information or supporting records during the assessment or subsequent work, and will explain what is needed and how to provide it.
What this work is — and is not
What this work is
- Advisory and implementation support for boards, management and stakeholders of distressed companies.
- Financial and commercial diagnosis, cash-flow recovery and governance support.
- Coordination with a lawfully appointed business rescue practitioner where statutory rescue is indicated.
- Coordinated engagement with SARS on tax debt within the appropriate professional framework.
What this work is not
- A claim that business rescue automatically stops SARS collections, improves tax compliance or protects directors — any moratorium is fact-dependent and governed by the Act.
- An automatic appointment as business rescue practitioner; appointment to a particular company is a separate statutory step.
- A guarantee of rescue, continued trading, or a particular return for creditors.
- Legal representation; Tax Relief SA is not a law firm and court process is handled by a duly admitted legal practitioner under a separate mandate.
Professional boundary: Under Chapter 6 and section 138 of the Companies Act, appointment as a business rescue practitioner requires appropriate professional standing and a CIPC licence. Advanced Business Rescue Practice training does not by itself establish current CIPC licensure, and a business recovery consultant is not automatically the appointed practitioner. Tax Relief SA is not a law firm; where legal pleadings or court process are required, they are handled by a duly admitted practising legal practitioner under a separate mandate.
Questions about business rescue and turnaround
What is business rescue in South Africa?
A formal process under Chapter 6 of the Companies Act for a financially distressed company, aimed at maximising the chance of continuing in existence or a better return for creditors than liquidation. It is overseen by a duly appointed business rescue practitioner. It is distinct from informal turnaround and from resolving a SARS debt.
Does the company have to be insolvent?
No. A company can be financially distressed — reasonably unlikely to pay its debts as they fall due over the next six months — without being balance-sheet insolvent. Early intervention is often more effective than waiting until insolvency.
Is tax debt a reason to consider rescue?
It can be, where tax arrears are part of wider distress. But a SARS debt alone is often better addressed through a payment arrangement or compromise than full business rescue. The assessment distinguishes the two before any route is chosen.
Can rescue work without court proceedings?
Yes. A company can place itself into business rescue by board resolution without court proceedings, where the statutory requirements are met. Informal turnaround also proceeds without court involvement. Court-driven rescue is one route among several, not the only one.
Who can act as a business rescue practitioner?
A person with appropriate professional standing and a CIPC licence, appointed in terms of the Companies Act. Advanced Business Rescue Practice training alone does not establish current licensure, and a consultant is not automatically the appointed practitioner. Appointment to a specific company is a separate statutory step.
How are SARS arrears handled?
SARS arrears are addressed as part of the wider creditor picture. Depending on the route, that may involve a payment arrangement, a compromise, or coordination with SARS within the statutory framework. SARS collection is not automatically halted by an enquiry; any moratorium is fact-dependent and governed by the Act.
How do we begin?
With a confidential assessment — a high-level overview of the entity, the SARS position and the creditor picture. Depending on the matter, our team may request further information or supporting records during the assessment or subsequent work, and will explain what is needed and how to provide it. A written scope and fee quotation are agreed before any detailed work begins.
Source
Business rescue is governed by Chapter 6 of the Companies Act and CIPC guidance; SARS payment arrangements apply where tax debt intersects with distress. Listing a source is a reference check, not professional advice on your company's position.
- Business Rescue (CIPC)
Companies and Intellectual Property Commission — Statutory business rescue practitioner appointment requires appropriate professional standing and a CIPC licence; training alone does not establish current licensure · checked 2026-10-20
- Companies Act 71 of 2008 — Chapter 6 (Business Rescue) and s138
South African Legislature (via LawLibrary) — Chapter 6 governs business rescue for financially distressed companies; s138 sets practitioner appointment requirements · checked 2026-10-20
- How do I make payment arrangements?
South African Revenue Service — Where a taxpayer has defaulted on a previous arrangement, reasonable and valid reasons for the default must be supplied before another deferment request; SARS can decline · checked 2026-10-20
Primary sources are listed so you can verify the underlying material. Listing a source is a check of the reference, not professional advice on your matter.
Assess the route before the options narrow
A confidential assessment establishes whether informal turnaround, statutory business rescue or tax-debt resolution fits your company — before any step is taken. Our team will guide you on what is needed to begin.