A critical analysis of the application of South African business rescue provisions on small to medium enterprises (SMEs)
- Peteni, Ushimin https://orcid.org/ 0000-0001-6478-9862
- Authors: Peteni, Ushimin https://orcid.org/ 0000-0001-6478-9862
- Date: 2021-09
- Subjects: Small business , Business enterprises , Business failures--Law and legislation
- Language: English
- Type: Master's theses , text
- Identifier: http://hdl.handle.net/10353/20328 , vital:45655
- Description: Small to Medium sized Enterprises (SMEs) play an essential role and can be described as the crucial bread and butter of the South African economy. They have the potential to create employment and skills development opportunities pertinent for sustainable economic growth. The unfortunate part is that South African Small to Medium sized Enterprises have the lowest survival rates in the world, resulting in high rates of business failure and job losses. This is because the South African economy does not favour SMEs, which are often burdened with structural hurdles including access to funding, lack of access to markets, inadequate skills, uncompetitive regulatory frameworks and technological disruptions. A developing economy such as South Africa cannot grow if companies facing financial difficulty are constantly liquidated. This is because the liquidation system does not offer companies an opportunity to restructure and possibly function within the context of raised concerns. In order to facilitate sustainable SMEs growth, the legislature has come up with statutory mechanisms to support SMEs and save them from total liquidation. Most recently, the Companies Act 71 of 2008 Chapter 6 introduces a business rescue mechanism applicable to all business structures established under the Act. The purpose of business rescue is to provide companies in financial distress with opportunities to reorganise, strategize and come up with useful corporate reorganisation measures which are useful and efficient in saving the financially distressed company and possibly yielding a better return for the creditors than would have been the case if the company was liquidated. This new enactment is seen as both an improvement and necessary reform from its predecessor, judicial administration which has widely been condemned as a failure. However, despite this improvement, the application of the current business provisions to SMEs is questionable. Although Chapter 6 of the Act makes provision for SMEs, it also presents a number of stumbling blocks, including the fact that services of business rescue practitioners are out of reach for most SMEs in South Africa. The purpose of this study is to consider challenges faced by SMEs in the practical application of the current business rescue provisions. This study further emphasizes the importance of South African SMEs, whilst looking at their challenges and how the Companies Act 71 of 2008 provisions, regarding business rescue, assists SMEs. The study looks at the impediments of certain provisions of business rescue and proposes recommendations. , Thesis (MA) (Laws) -- University of Fort Hare, 2021
- Full Text:
- Date Issued: 2021-09
- Authors: Peteni, Ushimin https://orcid.org/ 0000-0001-6478-9862
- Date: 2021-09
- Subjects: Small business , Business enterprises , Business failures--Law and legislation
- Language: English
- Type: Master's theses , text
- Identifier: http://hdl.handle.net/10353/20328 , vital:45655
- Description: Small to Medium sized Enterprises (SMEs) play an essential role and can be described as the crucial bread and butter of the South African economy. They have the potential to create employment and skills development opportunities pertinent for sustainable economic growth. The unfortunate part is that South African Small to Medium sized Enterprises have the lowest survival rates in the world, resulting in high rates of business failure and job losses. This is because the South African economy does not favour SMEs, which are often burdened with structural hurdles including access to funding, lack of access to markets, inadequate skills, uncompetitive regulatory frameworks and technological disruptions. A developing economy such as South Africa cannot grow if companies facing financial difficulty are constantly liquidated. This is because the liquidation system does not offer companies an opportunity to restructure and possibly function within the context of raised concerns. In order to facilitate sustainable SMEs growth, the legislature has come up with statutory mechanisms to support SMEs and save them from total liquidation. Most recently, the Companies Act 71 of 2008 Chapter 6 introduces a business rescue mechanism applicable to all business structures established under the Act. The purpose of business rescue is to provide companies in financial distress with opportunities to reorganise, strategize and come up with useful corporate reorganisation measures which are useful and efficient in saving the financially distressed company and possibly yielding a better return for the creditors than would have been the case if the company was liquidated. This new enactment is seen as both an improvement and necessary reform from its predecessor, judicial administration which has widely been condemned as a failure. However, despite this improvement, the application of the current business provisions to SMEs is questionable. Although Chapter 6 of the Act makes provision for SMEs, it also presents a number of stumbling blocks, including the fact that services of business rescue practitioners are out of reach for most SMEs in South Africa. The purpose of this study is to consider challenges faced by SMEs in the practical application of the current business rescue provisions. This study further emphasizes the importance of South African SMEs, whilst looking at their challenges and how the Companies Act 71 of 2008 provisions, regarding business rescue, assists SMEs. The study looks at the impediments of certain provisions of business rescue and proposes recommendations. , Thesis (MA) (Laws) -- University of Fort Hare, 2021
- Full Text:
- Date Issued: 2021-09
The adoption of the twin peaks model in the regulation of South African financial markets : a comparative analysis.
- Marange, Patience https://orcid.org/ 0000-0003-4405-2702
- Authors: Marange, Patience https://orcid.org/ 0000-0003-4405-2702
- Date: 2021-09
- Subjects: Financial services industry , Financial services industry--Law and legislation
- Language: English
- Type: Master's theses , text
- Identifier: http://hdl.handle.net/10353/21278 , vital:48175
- Description: Over two decades ago, a number of countries have changed their financial regulatory models. The growing complexity of financial products, the increasing challenge of regulating large financial conglomerates, and the repercussions of the 2008 Global Financial Crisis, amongst other factors, have made regulatory reform a key priority for many economies. A move towards the Twin Peaks model of financial regulation has been one of the trends in recent years. This model sees regulation split into two broad functions which are market conduct regulation and prudential regulation. South Africa adopted the Twin Peaks financial regulatory model in 2017 as a way of strengthening its financial regulatory model. By adopting the Twin Peaks model, South Africa has become the eighth and the first developing country to adopt the financial regulatory model. The adoption of the Twin Peaks financial regulatory model in South Africa was mainly inspired by the effects of the 2008 Global Financial Crisis. This study undertakes a comparison of the Twin Peaks model structure in South Africa with the structure of its counterparts, which are Australia, United Kingdom and the Netherlands. In doing so, the study identifies the strengths and possible weaknesses of the model in South Africa. The study discusses the extent to which the South African Twin Peaks model reflects international experience. The study traces the evolution of the financial markets and its regulation. It also delves into the main models of the regulation of financial services industry including the Twin Peaks model, which is the focus of the study. The rationale of South Africa’s adoption of the Twin Peaks model is also considered. The Twin Peaks model was introduced in South Africa through the enactment of the Financial Sector Regulatory Act. This legislation reveals that South Africa has drawn increasingly on international experience, particularly the structural design and the cooperation and collaboration of the regulators. It also reveals similarities, notable differences as well as characteristics that might be regarded as unique to South Africa. The similarities reveal that the South African Twin Peaks greatly aligns with that of its counterparts. This is exemplified through the cooperation and coordination between the regulators and the relationship between the regulators and the government amongst others. The study explores insights and lessons to South Africa which can be learnt from its counterparts like the need for effective coordination amongst the Twin Peak regulators. Thereafter, the study puts forward recommendations for reform, which can enable the effective implementation of the Twin Peaks financial regulatory architecture. , Thesis (MA) (Laws) -- University of Fort Hare, 2021
- Full Text:
- Date Issued: 2021-09
- Authors: Marange, Patience https://orcid.org/ 0000-0003-4405-2702
- Date: 2021-09
- Subjects: Financial services industry , Financial services industry--Law and legislation
- Language: English
- Type: Master's theses , text
- Identifier: http://hdl.handle.net/10353/21278 , vital:48175
- Description: Over two decades ago, a number of countries have changed their financial regulatory models. The growing complexity of financial products, the increasing challenge of regulating large financial conglomerates, and the repercussions of the 2008 Global Financial Crisis, amongst other factors, have made regulatory reform a key priority for many economies. A move towards the Twin Peaks model of financial regulation has been one of the trends in recent years. This model sees regulation split into two broad functions which are market conduct regulation and prudential regulation. South Africa adopted the Twin Peaks financial regulatory model in 2017 as a way of strengthening its financial regulatory model. By adopting the Twin Peaks model, South Africa has become the eighth and the first developing country to adopt the financial regulatory model. The adoption of the Twin Peaks financial regulatory model in South Africa was mainly inspired by the effects of the 2008 Global Financial Crisis. This study undertakes a comparison of the Twin Peaks model structure in South Africa with the structure of its counterparts, which are Australia, United Kingdom and the Netherlands. In doing so, the study identifies the strengths and possible weaknesses of the model in South Africa. The study discusses the extent to which the South African Twin Peaks model reflects international experience. The study traces the evolution of the financial markets and its regulation. It also delves into the main models of the regulation of financial services industry including the Twin Peaks model, which is the focus of the study. The rationale of South Africa’s adoption of the Twin Peaks model is also considered. The Twin Peaks model was introduced in South Africa through the enactment of the Financial Sector Regulatory Act. This legislation reveals that South Africa has drawn increasingly on international experience, particularly the structural design and the cooperation and collaboration of the regulators. It also reveals similarities, notable differences as well as characteristics that might be regarded as unique to South Africa. The similarities reveal that the South African Twin Peaks greatly aligns with that of its counterparts. This is exemplified through the cooperation and coordination between the regulators and the relationship between the regulators and the government amongst others. The study explores insights and lessons to South Africa which can be learnt from its counterparts like the need for effective coordination amongst the Twin Peak regulators. Thereafter, the study puts forward recommendations for reform, which can enable the effective implementation of the Twin Peaks financial regulatory architecture. , Thesis (MA) (Laws) -- University of Fort Hare, 2021
- Full Text:
- Date Issued: 2021-09
- «
- ‹
- 1
- ›
- »