Parliament on Wednesday passed the Insolvency Bill with amendments that include creation of the new office of the director of insolvency and the office of the receiver of applications to facilitate the process of liquidation.
The Insolvency Bill is among three crucial bills promoted by the World Bank to improve the business environment and attract more foreign direct investment.
Minister of Justice and Constitutional Affairs Samuel Tembenu welcomed the passing of the bill as vital for improving the business legal framework.
He said: “This [bill] replaces the outdated bankruptcy laws which were difficult to administer and which failed to allow businesses that were struggling to have an opportunity to rise again while under administration or liquidation.”
Minister of Industry and Trade Joseph Mwanamvekha said the director of insolvency has been created alongside the official receiver to facilitate the process.
He said up-to-date insolvency laws and institutions will bring many benefits to the economy.
Said Mwanamvekha: “This will also help us avoid pitfalls of integration of the national financial systems with the international financial system. Modern insolvency laws and institutions promote restructuring of viable businesses and efficient closure and transfer of assets of failed businesses.”
Other bills the World Bank and business community pushed were the Personal Property Bill and the Companies Act and while the two were passed in the previous sitting of the House, the Insolvency Bill was deferred after being referred to the Parliamentary Committee on Trade and Commerce which finally tabled a report on Wednesday, following differences over the initial draft.n