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Local Government: Municipal Finance Management Act, 2003 (Act No. 56 of 2003)

Chapter 10 : Municipal Entities

Part 6 : General

109. Financial problems in municipal entities


If a municipal entity experiences serious or persistent financial problems and the board of directors of the entity fails to act effectively, the parent municipality must either—

(a) take appropriate steps in terms of its rights and powers over that entity, including its rights and powers in terms of any relevant service delivery or other agreement;
(b) impose a financial recovery plan, which must meet the same criteria set out in section 142 for a municipal financial recovery plan; or
(c) liquidate and disestablish the entity.