Being under debt review does not disqualify you as a company director. Section 69 of the Companies Act sets out what disqualifies a director, and debt review is not on the list. Sequestration is, which is why debt review is usually the safer route for a director who needs to restructure personal debt.
If you sit on a board and you are quietly drowning in personal debt, this is probably the question keeping you up at night: does sorting out my debt cost me my seat? It is a fair worry, because your income, your reputation, and sometimes your whole career are tied to that directorship. The short answer is reassuring, and the detail is worth getting right.
A director with personal debt and surety to think about? These cases need careful handling. Speak to a registered debt counsellor, confidentially and with no obligation.
What Section 69 Actually Says
Section 69 of the Companies Act 71 of 2008 lists the grounds that disqualify a person from being a company director. The main ones are being an unrehabilitated insolvent, being declared a delinquent director by a court, being prohibited by a court from being a director, and certain convictions for dishonesty offences like fraud or theft. Read the list and one thing stands out: debt review is not there. It is not an insolvency, not a court prohibition, and not a conviction. It is a restructuring of your personal debt under the National Credit Act.
So a person under debt review can be appointed as a director, and an existing director who goes under debt review keeps their seat. The Act simply does not treat debt review as a disqualifying event.
Why Sequestration Is the Real Danger, Not Debt Review
This is the part directors most need to understand, because the two are often confused. Sequestration makes you an unrehabilitated insolvent, and that status is expressly disqualifying under Section 69. A sequestrated person cannot serve as a director until they are rehabilitated, which can take years. Debt review carries none of that. For a director weighing the options, the choice often comes down to this single fact: sequestration can cost you the directorship, debt review does not. For most directors with restructurable debt, that makes debt review the obvious safer route. We cover the wider comparison in our guide on debt review vs sequestration.
Does My Debt Review Touch the Company?
No. A company is a separate legal person, and debt review deals only with your personal debts. The company's debts are a separate matter, handled through business rescue or liquidation if it ever comes to that. The bridge between the two is personal surety. If you signed surety for a company loan, that surety is your personal liability, and it can be drawn into your debt review. Beyond that link, your personal restructuring does not reach into the company's affairs.
The Surety Question Directors Always Ask
Most directors of small and medium companies have signed personal surety somewhere, often for the overdraft, the equipment finance, or the lease. Under debt review, surety that is already due is treated like any other personal debt and built into your plan. Surety that is contingent, meaning it only becomes payable if the company defaults later, is more nuanced and needs to be assessed case by case. The practical takeaway is to bring every surety document to your first assessment, because a counsellor cannot plan around a liability they do not know about.
Privacy: Will the Board Find Out?
Debt review is confidential. There is no public register and no Government Gazette notice, which is one more way it differs from sequestration. Your application sits between you, your debt counsellor, and your personal creditors. The company is not a party to it, so there is no automatic disclosure to your co-directors or shareholders. The debt review flag does appear on your personal credit profile, so anyone who runs a credit check on you with your consent would see it, but it is not broadcast to your board. For the full detail on who can and cannot see it, read can my employer know I am under debt review.
Professionals and Regulated Roles
If you are a registered professional as well as a director, an accountant, an attorney, a financial adviser, the worry doubles. The reassuring part is that debt review does not notify your professional body and is not an insolvency, which is the status most fit-and-proper rules actually care about. The honest caveat is that some regulated roles, especially financial-services roles under the FSCA and the FAIS Act, assess your broader financial soundness, so it is worth checking your specific body's requirements. In practice, taking structured steps to deal with your debt usually reads as responsibility, not a red flag.
The Bottom Line for Directors
Debt review lets you restructure personal debt while keeping your directorship, your privacy, and in most cases your professional standing intact. The areas that need care are surety and any regulated role you hold, and both are manageable with proper advice. If you have been avoiding dealing with the debt because you feared losing your seat, that fear is largely misplaced, and the alternative of letting it run to judgement or sequestration is the path that actually threatens the things you are trying to protect.
Frequently Asked Questions
Can a director be under debt review in South Africa?
Yes. Being under debt review does not disqualify you from being a company director. Section 69 of the Companies Act lists what disqualifies a director, such as being an unrehabilitated insolvent (sequestration), a court declaration of delinquency, or certain criminal convictions. Debt review is none of those. It is a debt-restructuring process under the National Credit Act, not an insolvency, so your directorship is unaffected.
What is the difference between debt review and sequestration for a director?
This is the distinction that matters most for directors. Sequestration makes you an unrehabilitated insolvent, which DOES disqualify you from being a director under Section 69 of the Companies Act until you are rehabilitated. Debt review does not. So for a director who wants to keep their seat on the board, debt review is usually the far safer route, because it restructures your personal debt without the insolvency status that costs you the directorship.
Will my fellow directors or shareholders find out?
Not through any official channel. Debt review is confidential. There is no public register and no notice in the Government Gazette (unlike sequestration, which is published). Your application is between you, your debt counsellor, and your personal creditors. The company itself is not party to your personal debt review, so there is no automatic disclosure to your co-directors or shareholders.
Does my personal debt review affect my company?
No. Debt review restructures your personal debts, not the company's. A company is a separate legal person, and its debts are dealt with separately (through business rescue or liquidation if needed). The one place they connect is personal surety: if you signed personal surety for a company loan, that surety debt is a personal debt and can be included in your debt review. Your counsellor will need the surety details to plan around it.
I signed personal surety for a business loan. What happens to it under debt review?
Personal surety you signed becomes your personal liability, so it can form part of your debt review like any other personal debt. The complication is that surety amounts can be large and sometimes only become payable if the company defaults. A registered debt counsellor will assess the surety, factor it into your restructured plan where it is already due, and advise how to handle contingent surety that has not yet been called up. This is exactly the kind of situation where getting proper advice early matters.
Will debt review affect my professional registration (SAICA, HPCSA, LSSA, FSCA)?
Debt review itself does not trigger a notification to professional bodies, and it is not an insolvency, which is the status most professional and fiduciary rules are concerned with. That said, some regulated roles (particularly financial-services roles under the FSCA and the FAIS Act, where honesty and integrity and financial soundness are assessed) may consider your broader financial position. The safest approach is to check your specific body's fit-and-proper requirements, but in most cases debt review is viewed as a responsible step rather than a disqualifying one.
