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{
    "id": 40827,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/40827/?format=api",
    "text_counter": 316,
    "type": "speech",
    "speaker_name": "The Assistant Minister for Industrialization (",
    "speaker_title": "",
    "speaker": null,
    "content": "Mr. Muriithi): Mr. Deputy Speaker, Sir, as I was seconding this Bill, I left at the point of explaining that if you look at the number of enterprises in Kenya, it is estimated that we have approximately five million to six million micro-enterprises. It is further estimated that we have over 500 million business names at the registry in the State Law Office and that we have 145,000 companies registered which are mainly private companies. In moving the economy forward, we need to graduate small businesses to become large businesses and micro-enterprises to become more formalized enterprises that are able to grow and create jobs. As I explained, around the world, 75 per cent of businesses start up and fail. They fail because of issues of working capital. Therefore, we need to modernize our law so that we make the distinction between a company that is insolvent; meaning it has run into difficulties with its cashflow and is unable to immediately service debts and a company or enterprise that is headed for bankruptcy or is not viable. Therefore, the whole purpose of this law is to, first of all, create that very clear distinction so that within a legal framework, as the private sector is going about its business, we are able to distinguish those companies that are insolvent. That is why the Bill makes the provision to provide a stay for creditors so that instead of where we are now, an insolvent enterprise typically moves directly to liquidation where we are selling assets. Once we have made that distinction, supposing then this enterprise must indeed be liquidated, this Bill makes a provision for independent administrators who take control of the process so that the liquidation maximizes the value that is able to be realized for creditors and other stakeholders. This is the purpose of the law; it is to help us do these things and give the liquidator time to be able to, in an orderly fashion, sell. If we do get to the point of liquidation of an enterprise, how do we ensure that things are done equitably between employees, sub-contractors and suppliers? Again, this is part of what the law is trying to accomplish. Mr. Deputy Speaker, Sir, one of the key provisions of this proposed law is to identify and provide a mechanism to punish managers or directors whose illegal actions may contribute to insolvency of a firm. We have seen this in many enterprises. Last"
}