Overview of Legal and Regulatory System for Insolvency/Restructuring/ Liquidation
1.1 Legal Framework
Financial restructurings, reorganisations, liquidations and insolvencies of business entities and partnerships in Kenya are predominantly governed by the Insolvency Act 2015 (IA). Other specialised statutory regimes include:
- the Companies Act 2015 (CA), on compromises, arrangements, reconstructions and amalgamations of companies and directors’ duties during these financial processes;
- the Capital Markets Act, on the restructuring and reorganisation of publicly traded companies;
- the Kenya Deposit Insurance Act (Cap 487C);
- the Banking Act (Chapter 488); and
- the Central Bank of Kenya Act (Chapter 491), on the administration, receivership and liquidation of banking, finance and insurance companies.
Despite being repealed, laws such as the Bankruptcy Act, Section 89 of the Law of Succession and the Companies Act (repealed) continue to apply to any past event or steps that preceded the coming into effect of the relevant parts of the IA.
1.2 Types of Insolvency
Restructuring, reorganisation and insolvency proceedings may be either voluntary (commenced by the company or directors) or involuntary (instigated by a regulator or creditors), depending on the company’s financial position, its objectives and applicable laws.
Read the Kenyan chapter here.
Download the full guide here.
