Deed of Company Arrangement Template for South Africa

A Deed of Company Arrangement is a legally binding rescue plan that helps struggling South African companies avoid liquidation. It outlines how a business will pay its debts and restructure its operations to become viable again, working similarly to a business rescue plan under the Companies Act 71 of 2008.

Once creditors approve the deed, it creates a clear pathway for the company's recovery. The arrangement typically includes payment schedules, debt restructuring terms, and specific steps to restore profitability. This gives businesses a second chance while protecting both creditor interests and jobs.

Consider a Deed of Company Arrangement when your South African business faces serious financial difficulties but still has potential for recovery. This solution works best when your company needs breathing room from creditors while implementing a turnaround strategy, especially if liquidation seems likely without intervention.

The deed becomes particularly valuable when you have supportive creditors and a viable business model at the core. It's most effective for companies with temporary cash flow problems, manageable debt levels, and clear paths to future profitability. Timing is crucial - initiate the process before the financial situation becomes irreversible.

• Standard Payment Deed: Most common type of Deed of Company Arrangement, focusing on structured debt repayment over time
• Asset Sale Deed: Involves selling specific company assets to satisfy creditors while maintaining core operations
• Creditor Compromise Deed: Allows for partial debt forgiveness in exchange for immediate partial payment
• Operations Restructuring Deed: Combines debt management with business model changes and operational reforms
• Holding Deed: Temporarily freezes creditor claims while a more detailed arrangement is negotiated

• Business Rescue Practitioners: Lead the development and implementation of the Deed of Company Arrangement, acting as independent experts
• Company Directors: Provide essential information and cooperate in creating the arrangement while remaining accountable for implementation
• Creditors: Vote on and become bound by the terms, often forming a creditors' committee to represent their interests
• Shareholders: May need to approve certain arrangements, especially those affecting company ownership or structure
• Legal Advisors: Draft and review the deed to ensure compliance with South African company law and protect all parties' interests

• Financial Assessment: Gather detailed company financials, including debt schedules, cash flow projections, and asset valuations
• Creditor Information: List all creditors, amounts owed, and security arrangements
• Business Plan: Create a realistic turnaround strategy showing how the company will return to profitability
• Timeline Planning: Set clear milestones for debt repayment and business restructuring goals
• Stakeholder Input: Collect feedback from key creditors and shareholders before finalizing the arrangement
• Documentation: Use our platform to generate a legally compliant deed that includes all essential elements

• Company Details: Full legal name, registration number, and registered address of the distressed company
• Administrator Appointment: Details of the business rescue practitioner and their powers
• Debt Structure: Complete breakdown of creditor claims and payment priorities
• Implementation Plan: Specific steps and timeline for business restructuring
• Moratorium Terms: Protection period details and restrictions on creditor actions
• Termination Conditions: Clear criteria for deed completion or termination
• Binding Provisions: Statements ensuring the arrangement binds all affected parties

A Deed of Company Arrangement differs significantly from an Accountability Agreement in both purpose and scope. While both documents establish responsibilities, their contexts and legal effects are quite distinct.

• Legal Framework: A Deed of Company Arrangement operates under business rescue provisions of the Companies Act, while Accountability Agreements function within general contract law
• Binding Effect: DOCAs bind all creditors and company stakeholders, even those who didn't vote for it; Accountability Agreements only bind specifically named parties
• Duration: DOCAs typically remain active until the rescue plan is completed; Accountability Agreements often have fixed terms
• Modification Process: DOCAs require creditor approval for changes; Accountability Agreements can be modified through mutual consent of signing parties
• Enforcement: DOCAs have statutory enforcement mechanisms; Accountability Agreements rely on standard contract remedies