Insolvency Law in South Africa

Tue, 07 Jul 2026 00:00:00 +0000

Introduction

South African insolvency law comprises two distinct regimes: the traditional sequestration and liquidation procedures under the Insolvency Act 24 of 1936, and the business rescue proceedings introduced by Chapter 6 of the Companies Act 71 of 2008. The law aims to balance the interests of creditors in recovering debts with opportunities for debtors to obtain financial relief and, in appropriate cases, to rehabilitate financially distressed companies.

The Insolvency Act 1936

The Insolvency Act 24 of 1936, although amended significantly over the years, remains the primary legislation governing the sequestration of individuals and partnerships, and the liquidation of companies in certain circumstances. The Act provides for the surrender of estates (voluntary sequestration) and the sequestration of estates by creditors (compulsory sequestration).

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Insolvency Law in South Africa

Introduction

The Insolvency Act 1936