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{
    "id": 575518,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/575518/?format=api",
    "text_counter": 341,
    "type": "other",
    "speaker_name": "",
    "speaker_title": "",
    "speaker": null,
    "content": "The Bill makes it possible to liquidate unregistered companies. For the first time, a company that has not been registered can be liquidated. This Bill recognises that there are unregistered companies that are operating. If you are one of them, this law applies to you and your company can be liquidated. The procedures for such liquidation are provided in the Bill. The Bill also provides for an administrator of insolvent companies to manage the company and pay off its debts. This is a new provision that does not exist in our current laws. This is what is called ‘Chapter 11’ in the US. It will ensure that companies do not disintegrate completely when they are placed under receivership. The Bill also provides for voluntary arrangement by a company that is potentially insolvent. The directors of a company may make proposals to its creditors for a voluntary arrangement under which the company enters into a composition in satisfaction of its debts or a scheme for arranging its financial affairs. We have known very many creditors who when they see that a company is suffering financially will apply to court to declare that company bankrupt. For the first time, the law allows the directors of a company that is potentially insolvent to enter into some arrangement with its creditors to ensure that they discharge their debt. There is a framework that is already provided in the Bill. The Bill also provides the general legal guidelines that a company must adhere to while in liquidation, such as lodging documents with the Registrar of Companies and the circumstance and procedure through which the Official Receiver, or any person, may make an application for injunction against the action or omission of a company. The Bill also seeks to establish and maintain public registers for bankrupt and other insolvent persons. The Bill also provides for the enforcement of the provisions of the United Nations Commission on International Trade Law (UNCITRAL), what we call the modern law on cross-border insolvency. It is famously referred to by its acronym UNCITRAL law. It is a model law by the United States. This law did not previously apply in Kenya. For the first time, this proposed legislation imports some provisions of UNICITRAL into our own laws. Previously, international treaties and agreements with relation to insolvency did not have legal force in Kenya. In line with our constitutional arrangement, the Bill seeks to adopt such law as part and parcel of Kenyan legislation. In conclusion, the Bill provides for publication of orders by courts in their website to ensure that one knows who has been placed under receivership or declared insolvent. These are matters that courts are now obligated to disclose to the public. The relevant office holders are also required to inform and notify all creditors of the prescribed steps taken during the entire insolvency period. I thank you, Hon. Temporary Deputy Speaker."
}