Corporate Insolvency Bill, 2019 passed by Ghana’s Parliament

Parliament has passed the Corporate Insolvency Bill, 2019 to provide a framework for the regulation of insolvency practitioners and also facilitate access to timely, efficient and impartial insolvency proceedings either directly or through the creditor’s committees.

 The Act will promote
efficient closure and transfer of assets of businesses which are no longer viable,
and a proper winding up of businesses where the members for other reasons,
decide to cease operations.

The Act is also expected to reduce the burden of insolvency
through potentially higher and equitable distribution of assets of failed
companies to creditors, as well as permit insolvency practitioners to accept
appointment as liquidators of insolvent companies.

 The passage of the
Bill came after it had undergone intensive amendments at the Consideration
Stage after it was first laid and read the first time before the House on
Wednesday March 27, 2019 seeking to provide effective and efficient insolvency
laws and institutions which are critical for economic growth.

 The Majority Leader
and the Minister for Parliamentary Affairs, Hon. Osei Kyei-Mensah-Bonsu laid
the Bill on the floor of the House on behalf of the Minister responsible for
Justice and Attorney General, Honourable Gloria Akuffo.

 The Speaker of
Parliament Rt. Hon. Prof. Aaron Mike Oquaye subsequently referred it to the
Parliamentary Select Committee on Constitutional, Legal and Parliamentary
Affairs chaired by MP for Offinso South Hon. Banda Ben Abdallah, for
consideration and Report.

The green light given the Bill followed the approval by the
House on Wednesday April 1, 2020 after agreeing that most companies faced
serious financial problems and also that most financial institutions carried
huge non-performing loan portfolios.

Prior to the passage of the Bill, the Majority Leader and MP
for Suame Hon. Osei Kyei-Mensah-Bonsu, moved the motion for it to be read the
third time and it was seconded by the Minority Leader and the Member for Tamale
South Constituency Hon. Haruna Iddrisu.

 The Majority Leader
said in Ghana it is imperative that effective insolvency laws and institutions
are established to help improve the quality of legal regime for corporate
bodies and administration when they become solvent.

 The Bill will be forwarded to His Excellency the President Nana Addo Dankwa Akufo-Addo who is expected to give the Presidential Assent.

Source: Parliament of Ghana

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Source : African Media Agency (AMA)