Business Rescue Practitioner Categories
If you are considering Business Rescue then you might be wondering what Business Practitioner is required for your business. If you are considering that question then you are in the right place, so let’s dive right in.
So when considering what Business Practitioner is required you need to understand that Business Rescue Practitioners fall into 3 categories:
- Senior Practitioner – actively engaged with business rescue for a period of at least 10 years.
- Experienced Practitioner – actively engaged with business rescue for a period of at least 5 years
- Junior Practitioner – actively engaged with business rescue for a period of at least 5 years
Company Classification
Companies undergoing business rescue fall into 3 categories
1. Large Companies
A company other than a state-owned enterprise with a public interest score greater than 500
2. Medium Companies
a. A public company with a public interest score of less than 500
b. A company other than a state-owned enterprise with a public interest score greater that 100 but less than 500
3. Small companies
A company other than a state-owned enterprise with a public interest score less than 100
Appointment Criteria
A Junior Practitioner may be appointed as a BRP to a small company
An Experienced Practitioner may be appointed as a BRP to a Small or Medium company. An
experienced BRP may also be appointed to a large company or state-owner enterprise but must be
assisted by a Senior Practitioner
A Senior Practitioner may be appointed as a BRP to any company
Public Interest Score
The public interest score is defined in the Companies Act and is calculated as the sum of
- Number of points equal to the average number of employees during the year
- One point for every R1 million of third-party liability at the financial year end
- One point for every R1 million turnover during the year
- One point for every individual who, at the financial year end, is known to the company
- In the case of a profit company to, directly or indirectly have a beneficial interest in any issued securities of the company
- In the case of an NPO to be a member of the company or a member of an association who is a member of the company.
Business Rescue Practitioner Rates
In terms of the companies Act a BRP can charge a company in business rescue for remuneration and expenses according to a tariff prescribed by the Minister.
The BRP may also propose additional remuneration – a contingency/success fee based on
- The acceptance of a business plan (within a certain timeframe) or certain matters being included in the plan
- The attainment of a certain result/s
The BRP rates are specified in the Companies Act Regulations; however, these rates have not been adjusted for a number of years and it is normal when negotiating a fee with a client for these fees to be adjusted for inflation.
The basic remuneration as per the current tariff prescribed by the Minister stipulates that the remuneration cannot exceed:
Small Companies – R1 250/hour or R15 625/day (incl. VAT)
Medium Companies – R1 500/hour or R18 750/day (incl. VAT)
Large Companies – R2 000/hour or R25 000/day (incl. VAT)
In addition to above the BRP can be reimbursed for any expenses they incur in performing their duties.
