bankruptcy law in kenya
UNIVERSITY OF NAIROBI
COLLEGE OF HUMANITIES AND SOCIAL SCIENCES
SCHOOL OF LAW
LL.B. III MODULE 2: DAY
TERM PAPER: GPR 317:BANKRUPTCY AND COMMERCIAL SECURITIES
AUGUST 2013
G34/36801/2010
QUESTION: Critically examine the salient features, reforms and innovations relating to individual insolvency as enshrined in the Kenyan Insolvency Bill 2012 as contrasted with the Bankruptcy Act, cap 53, Laws of Kenya.
INTRODUCTION
The Kenyan Insolvency Bill 2012 is an act of parliament to: amend and consolidate the law relating to the insolvency of natural persons and incorporated and unincorporated bodies; to provide alternative procedures to bankruptcy that will enable the affairs of insolvent natural persons to be managed for the benefit of their creditors; to provide for the liquidation of incorporated bodies (including solvent ones); to provide as an alternative to liquidation procedures that will enable the affairs of such of those bodies as become insolvent to be administered for the benefit of their creditors; and to provide for related and incidental matters
Individual insolvency refers to the inability of a debtor to pay his debts as and when they fall due. The individual status refers to natural persons only and not corporations.
BACKGROUND
The bill was enacted to streamline regulation and ownership of businesses in Kenya by introducing international best practices on corporate law and management of insolvency1. The Insolvency Bill was set to repeal the outdated Bankruptcy Act Cap 53 by simplifying insolvency proceedings.
This major reform was a reaction to the wind of change in the wake of the country’s position in “Ease of doing business” in East Africa, with Kenya dropping to 3rd position in “Doing Business 2013” ranking in the region. The Companies Bill now the Companies Act 2012 was also set forward to reformulate and improve the business climate in Kenya2.
The bill primarily seeks to provide independent administrators with
COLLEGE OF HUMANITIES AND SOCIAL SCIENCES
SCHOOL OF LAW
LL.B. III MODULE 2: DAY
TERM PAPER: GPR 317:BANKRUPTCY AND COMMERCIAL SECURITIES
AUGUST 2013
G34/36801/2010
QUESTION: Critically examine the salient features, reforms and innovations relating to individual insolvency as enshrined in the Kenyan Insolvency Bill 2012 as contrasted with the Bankruptcy Act, cap 53, Laws of Kenya.
INTRODUCTION
The Kenyan Insolvency Bill 2012 is an act of parliament to: amend and consolidate the law relating to the insolvency of natural persons and incorporated and unincorporated bodies; to provide alternative procedures to bankruptcy that will enable the affairs of insolvent natural persons to be managed for the benefit of their creditors; to provide for the liquidation of incorporated bodies (including solvent ones); to provide as an alternative to liquidation procedures that will enable the affairs of such of those bodies as become insolvent to be administered for the benefit of their creditors; and to provide for related and incidental matters
Individual insolvency refers to the inability of a debtor to pay his debts as and when they fall due. The individual status refers to natural persons only and not corporations.
BACKGROUND
The bill was enacted to streamline regulation and ownership of businesses in Kenya by introducing international best practices on corporate law and management of insolvency1. The Insolvency Bill was set to repeal the outdated Bankruptcy Act Cap 53 by simplifying insolvency proceedings.
This major reform was a reaction to the wind of change in the wake of the country’s position in “Ease of doing business” in East Africa, with Kenya dropping to 3rd position in “Doing Business 2013” ranking in the region. The Companies Bill now the Companies Act 2012 was also set forward to reformulate and improve the business climate in Kenya2.
The bill primarily seeks to provide independent administrators with