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 operation.
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.
It seeks to provide effective and efficient insolvency laws and institutions which are critical for economic growth.
The Majority Leader and Minister of Parliamentary Affairs, Osei Kyei-Mensah-Bonsu, laid the Bill on the floor of the House on behalf of the Minister responsible for Justice and Attorney General, Ms Gloria Akuffo.
The Speaker of Parliament, Prof Aaron Mike Oquaye, subsequently referred it to the Parliamentary Select Committee on Constitutional, Legal and Parliamentary Affairs chaired by MP for Offinso South Banda Ben Abdallah, for consideration and a report.
The greenlight was given to the Bill followed the approval by the House on Wednesday, April 1, 2020 after agreeing that most companies face 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, 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 of Parliament for Tamale South Constituency Haruna Iddrisu.
The Majority Leader said in Ghana,t it is imperative that effective insolvency laws and institutions are established to help improve the quality of the legal regime for corporate bodies and administration when they become solvent.
The Bill will be forwarded to President Nana Addo Dankwa Akufo-Addo for presidential assent.