Business Liquidation & Corporate Insolvency in Johannesburg

A Formal Process for Insolvent Companies

When a company can no longer meet its financial obligations, liquidation may be the most responsible step forward. Hugh Raichlin Attorneys provides clear, professional guidance through voluntary and compulsory liquidation, ensuring compliance with the Companies Act and creditor protection.

Discuss Your Company’s Situation

The End of a Business Journey

Liquidation Is Complex — Legal Support Is Essential

Placing a company into liquidation is a final and irreversible step with profound consequences for its directors, employees, and creditors. Navigating the process without expert legal counsel can expose directors to personal liability and result in a disorderly and value-destructive end to the business. Our role is to ensure the winding-up is managed correctly and in full compliance with the law.

Corporate liquidation involves multiple stakeholders, legal obligations, and financial risks. Our attorneys help directors, shareholders, and creditors navigate the process with transparency, ensuring all actions comply with the Companies Act (No. 71 of 2008) and Insolvency Act (No. 24 of 1936).

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We Assist With:

Voluntary and compulsory liquidations

Creditors’ claims and asset recovery

Shareholder and director liability matters

Liquidator appointments and reporting

Alternative restructuring or business rescue

Understanding Your Options

Voluntary vs Compulsory Liquidation: Two Legal Paths to Liquidation

1. Voluntary Liquidation
Initiated by directors or shareholders when the company is insolvent or wishes to cease operations responsibly.
Benefits:
– More control over timing and process.
– Allows negotiation with creditors.
– Often faster and less costly than court-ordered liquidation.

2. Compulsory Liquidation
Initiated by creditors through the High Court when debts remain unpaid.
Considerations:
– Court-driven and subject to judicial oversight.
– May impact director credit records or liability exposure.

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30+ Years • Accredited Expertise • Proven Results

Why Businesses Trust Hugh Raichlin Attorneys

With over three decades of insolvency and corporate law experience, Hugh Raichlin Attorneys provides trusted, strategic guidance for businesses navigating financial distress.

Expertise in the Companies Act: We have a deep, technical understanding of the legal framework governing corporate insolvency in South Africa.
Advice for All Stakeholders: We are equipped to advise directors, shareholders, and creditors on their respective rights and obligations.
Focus on Director Compliance: We provide clear guidance to directors to ensure they meet their legal duties during liquidation, protecting them from personal liability.
Exploring Alternatives: Liquidation is final. We provide an expert assessment on whether Business Rescue might be a viable alternative to save the company.
Accredited Mediation Expertise: Qualified under the Gauteng directive for insolvency disputes.
Strategic Approach: Early intervention and practical alternatives to liquidation.
Director Protection: Ensuring compliance and risk mitigation.
Confidential Support: Sensitive handling of corporate insolvency matters.

How Corporate Liquidation Works

Navigating the Winding-Up Procedure

Timeline: Typically 4–12 months, depending on complexity and creditor engagement.

Initiation: The process begins either by a special resolution of the shareholders (Voluntary Liquidation) or by an application to the court by a creditor or the company itself (Compulsory Liquidation).
Court Application (if required) and Granting of the Order: File petition for winding up. The High Court grants a provisional, and then a final, liquidation order.
Appointment of a Liquidator: The Master of the High Court appoints a liquidator who takes full control of the company, its assets, and its bank accounts.
Creditors’ Meetings: The liquidator convenes meetings for creditors to formally prove their claims against the company.
Realisation of Assets: The liquidator sells all the company’s assets to generate cash.
Investigation: The liquidator investigates the company’s affairs and the conduct of its directors prior to liquidation.
Accounts & Distribution: The liquidator drafts the Liquidation and Distribution (L&D) Account for the Master’s approval and then distributes the proceeds to creditors.
Final Account & Deregistration: The company is finally deregistered with the CIPC, and removed from CIPC register.
Learn About Insolvency Law Overview →

Transparency • Accountability • Compliance

Protecting Directors Through the Process

Directors have a legal duty to act honestly and in the company’s best interests during financial distress. We advise on compliance to prevent personal liability under the Companies Act and Insolvency Act.

We Advise On:

Duties to notify creditors and shareholders
Avoiding reckless trading
Filing for liquidation at the right time
Cooperation with liquidators and the Master’s Office
Preparing reports and statements of affairs
Learn About Corporate Governance →

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Recovery • Resolution • Continuity

Avoid Liquidation Through Negotiation

In some cases, liquidation can be avoided through mediation or business rescue. We work with directors and creditors to explore alternative settlements under the Gauteng High Court’s mandatory mediation directive.

We Facilitate:

Creditor negotiations and repayment plans
Business rescue applications under Chapter 6
Voluntary asset sales to reduce liability
Out-of-court settlements
Learn About Business Rescue →

Common Pitfalls & Mistakes for Directors

Mistakes That Complicate Liquidation

Reckless Trading: Continuing to rack up debt when you know the company is insolvent can lead to directors being held personally liable for those debts.
Disposing or Transfer of Assets: Attempting to sell or hide company assets just before or after liquidation is illegal and can have severe legal consequences.
Failing to Cooperate: Directors have a legal duty to assist the liquidator. Failure to do so can result in legal action.
Ignoring the Warning Signs, Delaying Filing: Delaying the decision to liquidate can often worsen the financial situation and increase the risk of personal liability for directors.
Failure to Communicate with Creditors – Increases litigation risk.
Improper Record Keeping – Leads to compliance penalties.
Ignoring Mediation – The Gauteng directive promotes early dispute resolution.
Court-Linked Mediation Explained →

Attorneys with specialist expertise

Our team brings accredited skills across property, family, commercial, labour, and mediation law.

Over 30 Years Of Experience

Trusted by generations of clients since 1993.

500+ Family & Divorce Cases Resolved

Guiding families through sensitive matters with compassion and clarity.

Reported High Court & Supreme Court of Appeal Judgments

Our cases have shaped South African common law and set lasting precedents.

Answers for Business Owners & Creditors

Corporate Insolvency FAQs

When is a Company Insolvent?

A company is legally insolvent if it meets either of these two tests:
Factual Insolvency: Its total liabilities are greater than its total assets.
Commercial Insolvency: It is unable to pay its debts as and when they fall due (i.e., it lacks cash flow).

What happens to employees during liquidation?

The contracts of employment are automatically suspended upon liquidation and will ultimately be terminated. Employees become creditors of the company for any unpaid salaries and severance pay.

Who gets paid first in liquidation?

Secured creditors, then preferent creditors (e.g., employees), then unsecured creditors. There is a strict legal order of preference. Secured creditors (like a bank with a bond) are paid first from the proceeds of their security. Then, preferent creditors (like employees and SARS) are paid before concurrent (ordinary) creditors.

As a director, can I start another company?

Generally, yes. Being a director of a liquidated company does not automatically disqualify you from being a director of another company, unless you have been declared a delinquent director by a court due to your conduct.

What is the liquidator’s main duty?

The liquidator’s primary duty is to act in the best interests of the general body of creditors. Their job is to recover and sell all company assets to realise the maximum possible value for distribution.

How long does the liquidation process take?

A simple liquidation can take 6-12 months, but complex cases involving multiple assets, legal challenges, or investigations can take several years to finalise.

Can a company apply for its own liquidation?

Yes — through voluntary winding-up by resolution of directors or shareholders.

What is the difference between liquidation and business rescue?

Liquidation ends operations; business rescue aims to restructure and save the company.

Can liquidation be stopped?

Yes — via settlement, withdrawal, or successful business rescue.

Is mediation mandatory before liquidation?

Yes — the High Court’s mandatory mediation directive requires attempts at mediation before litigation.

Get Expert Legal Support for Business Liquidation

Navigate the Liquidation Process with Expert Legal Counsel

Whether you are a director considering your options or a creditor seeking to recover a debt, you need expert legal advice. Contact our Johannesburg office today to schedule a confidential consultation.

If your company is facing financial pressure, Hugh Raichlin Attorneys provides clear legal guidance — from liquidation to restructuring — with confidentiality, compliance, and care.

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Here\’s how you can contact us for any questions or concerns.

1 The Avenue, Norwood, Johannesburg 2192

011 010 8336

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reception@raichlin.co.za

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