Short Description of the Designation:
The Business Rescue Practitioner (BRP) assists companies who are technically insolvent from trading out of the state insolvency back to solvency.
Some of the duties of a Business Rescue Practitioner are:
- To liaise with creditors of the company.
- To negotiate a compromise agreement with their outstanding creditors in order that the company may continue to trade; e.g., by making an offer of 10c or 20c in the rand as an example.
- To negotiate with current creditors, including Banks, to continue to supply the company with goods and services at a full rate in order for the company to trade.
- To ensure the prompt settlement of all outstanding debts by the companies debtors.
- To negotiate with all staff members (and trade unions) on their condition of employment, and their continued employment or any staff reductions if it is deemed necessary for the continuance of the business.
- To fully determine what caused the company to enter into business rescue and how the business rescue is initiated. It is important to understand the terms and provisions including the definition as contained in chapter 6 of the Companies Act No.71 of 2008.
- To manage the company during business rescue operations and assist the company to trade out of its difficulties.
Criteria for obtaining the Professional Designation
In terms of Section 138(1) (chapter 6) of the Companies Act 71 of 2008, a person who is a member in good standing of a Recognized Controlling Body (RCB) with CIPC may be appointed as a Business Rescue Practitioner, provided that the person has a qualification in law, accounting or business management.
It is important that the Business Rescue Practitioner must also have practical experience of running a business. It is difficult at this stage to say what number of years of experience is needed, however, it would be preferable if the person has had business experience in different fields of business rather than have had many years of experience in one particular area.
To have completed a qualification in Law, Accounting or a Business Management with a minimum
SAQA rated NQF level 6 (pre 2009) and NQF 7 (Post 2009).
Practical / Workplace Experience
The Act does not prescribe the minimum number of years of experience required however it must be taken into account that this Act, although passed in 2008, only became effective on 1 May 2011.
We also note that CIPC only implemented this section of the Act in 2012. Taking this into account it indicates that no Business Rescue Practitioner has had more than 5 years practical experience as a BRP.
It could be argued that persons (Lawyers, Trustees etc.) provided a service for sequestration of companies for many years, but the Business Rescue aspect is a completely new concept and in actual fact contrary to liquidations.
It is therefore proposed by the IAC that an applicant should have at least 5 years practical experience as a Practicing Accountant / Commercial Lawyer or a Business Manager.
Board Examination/Competency Assessment
The IAC has set an entrance / evaluation being a 4 hour assessment (2.50 hours written and 1.50 hours oral) covering the following:
1. The administrative requirements for the BRP with CIPC, i.e., the completion and timeous submission of the various forms required by CIPC.
2. Principles of Management.
4. Company and Commercial Law
5. The Law of Insolvency (Insolvency Act )
Continuous Professional Development (CPD Requirements)
(In order to ensure the currency of professional knowledge and to retain the Professional Designation, the professional must comply with the following minimum requirements)
It was agreed between CIPC and the Controlling Bodies during May 2017 that the minimum CPD Hours would be as follows:
20 hours per year in total, of which:
12 hours must be verifiable / structured
- 4 hours must be business rescue related
- 8 hours non-core but have the elements of Tax, Finances, Company and Commercial Law
8 hours not verifiable / unstructured, e.g., reading material, etc.
The following proposal was made regarding CPD Hours:
1. The qualification and / experience of the presenter
2. Contents of the presentation split into:
- Technical / Practical
3. Assessment (Assignment and questionnaire)
4. Length of time
5. NQF level of the programme
The committee recommended that the renewable period of the license be done every 3 years, and therefore an evaluation need to done every 3 years.
Professional Indemnity Insurance
1. In order to comply and fall within the scope of the IAC, all Business Rescue Practitioners registered with the IAC are required to have satisfactory PII for each and every business rescue appointment accepted by such member.
2. The Member has the right to elect any Insurance Company as their chosen provider of PII, or use the R5m cover provided by the IAC PI Insurance through AON; the. The purpose of this Clause is merely for the provision of satisfactory PI Insurance Cover for each business rescue appointment rather than using a particular Insurance Company.
3. Failure on the Members part to acquire PII Cover will be strictly regarded as a violation of IAC membership conditions and as a result the Member may be subjected to disciplinary charges.
4. In the case where the Member has refused or neglected to acquire Professional Indemnity Insurance, the member hereby indemnifies the IAC against any claims which may arise due to the Member’s failure or negligence or any other cause of whatever nature or reason.
5. By signature hereto the Member acknowledges and confirms that he /she has a valid and satisfactory PI Insurance Cover for each and every business rescue appointment.
- Should there be any claims instituted against the IAC for whatsoever reason or nature relating to a Member’s negligence, and if the said Member cannot produce proof of satisfactory PII cover, he /she, will be held personally liable for any damages that may arise due to such failure or negligent claim.
- Each Member personally indemnifies the IAC for any damage or loss that may be incurred in the event of any Claim concerning failure of cover or the difference in cover for the variable loss that cannot be recovered by the Claimant.
Code of Conduct
The code of conduct of IAC members are set out in the Institutes By-Laws. In addition to that, all IAC
members are required to sign the IAC covenant, and keep it displayed in their office or practice.
Covenant of an IAC Member
An IAC Member Shall:
1) Strive to the best of their ability to serve the needs of their clients efficiently and professionally.
2) Conduct themselves in a manner consistent with the high standards and good reputation of Accountants and the Institute. They shall act with fairness and integrity towards all persons with whom their work is connected, towards other members and in compliance with the letter and the spirit of current statutory and other legal requirements.
3) In regard to the affairs of the client, act and perform their professional functions in good faith, honestly and diligently.
4) Always maintain objective, professional standards and ensure that the legitimate interest of the client being advised is paramount in any recommendations and advice given. Always ensure that the clients’ interest will rank ahead of any other business pressure on or business commitment they may have.
5) Not attempt to sway the clients judgments to obtain commercial or pecuniary benefit for their employer, associates or themselves.
6) Only accept that number of clients as an Accounting or partnership of Accounting Officers, may effectively and professionally service.
7) When requested or by law required to do so, to advise a client on the financial management of a close corporation, company or business entity;
8) Not act recklessly or maliciously injure, or attempt to injure, whether directly or indirectly, the professional reputation of another person or company.
9) Not disclose any aspect of the business affairs of a client to a third party except as required by law or underwritten authority granted by the client.
10) Ensure that any privileged information from my clients or other relevant source in the course of any assignment is kept confidential.
11) Report to the client any dishonest or criminal activity discovered in the course of their professional duties.
12) Have proper regard for the professional standards expected of them and shall not continue in work for which they are not competent without first obtaining such or assistance as is necessary to enable the work to be carried out competently.
13) Maintain professional independence at all times without control of influence from others and, in event of any potential or current conflict of interest arising, inform all interested parties and offer to withdraw.
14) Not allow any person to use their practice number even if they are in partnership with such a person;
15) Only charge a client for professional services rendered or charge a client fees for professional services at a rate markedly higher than the average rate of fees charged by Professional Accountants for such services;
16) Not use any information gained during the provision of professional services to a client, for
personal gain either for themselves or for any other person whatsoever;
17) Improperly obtain or attempt to obtain work; including failing to send a letter of professional
courtesy to the previous accountant of any new or prospective client I may engage.
18) Not discriminate against any client, or any employee or contractor of a client, on the basis of
race, gender, sex, medical status, marital status, ethnic or social origin, colour, age,
disability, religion, culture or language.
19) I will uphold the honour and integrity of the IAC as a professional body and in so doing
undertake to pay my membership subscriptions within 14 days of being invoiced or by no
later than 31 December each year, for the ensuing year.
20) Not display or use my membership certificate in any way that would imply that I am still a
member of the Institute, and not be entitled to use any designatory communication of an IAC
member with immediate effect should my membership lapse or be terminated for any reason.
Should it be brought to the attention of the Institute that the membership certificate or
designatory communication was used after my membership has lapsed; the Institute has the
right to invoke legal action against such practice.
The IAC Board has decided that no extra charge will be levied to our existing Accounting Officers as far as subscription fees is concerned for this Designation, if you wish to apply and add it to your existing Designations, but there will be a fee of R1000.00 plus VAT for the Letter of Application of Good Standing, which will be valid for one calendar year.
For those members who are not Accounting Officers of the IAC and require this Designation, the subscription fee will be R6011, 58 which is inclusive of PI insurance (R5 million incl. VAT) and you will further be required to pay R1000. 00 plus VAT for the Application "Letter of Good Standing" from the Institute.