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ACTS SUPPLEMENT No. 8 23rd September, 2011. ACTS SUPPLEMENT to The Uganda Gazette No. 57 Volume CIV dated 23rd September, 2011. Printed by UPPC, Entebbe, by Order of the Government. |
Act 14 |
Section. |
1. 2. |
3. 4. 5. 6. 7.
10. 11. 12. 13. 14. 15. 16. 17. 18. 19.
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Insolvency Act THE INSOLVENCY ACT, 2011. |
2011 |
ARRANGEMENT OF SECTIONS. Part I—Preliminary. Commencement. Interpretation. Part II—Inability To Pay Debts: Creditors’ Claims: Voidable Transactions. Inability to pay debts. Statutory demand. Setting aside a statutory demand. Creditor’s claims. Ascertaining amount of claim and interest. Fines and penalties. Claim of an unascertained amount. Mutual credit and set-off. Claims by unsecured creditors. Claims by secured creditors. Preferential debts. Non-preferential debts. Surplus assets. Voidable transactions. Preferences. Transactions at undervalue. Voidable charges. Insider dealings. Procedure for setting aside voidable transactions. Part III—Individual Insolvency. Petition for bankruptcy. Statement of affairs. Public examination of debtor. Inquiry into debtor’s dealings and property. |
1 |
Act 14 Section. 24. 25. 26. 27. 28. 29. 30. 31. 32. |
33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45. |
46. 47. |
48. 49. 50. |
Insolvency Act 2011 |
Official receiver’s notice of commencement of bankruptcy and creditor’s first meeting. Appointment of trustee. Trustee’s notice of bankruptcy and particulars. Effect of bankruptcy order. Special manager of bankrupt’s estate. Duties of a trustee. Trustee’s notice to creditors. Bankrupt’s estate. Bankrupt’s estate. Property acquired after commencement of bankruptcy. General powers of trustees and conduct of bankruptcy. Trustee’s power to obtain documents. Trustee’s power to allow bankrupt to manage property. Trustee’s power to disclaim onerous property. Official name of trustee. Vacation of office by trustee. Duties of a bankrupt. Compliance order. Search and seizure. Termination of bankruptcy. Discharge. Effect of discharge. Annulment, revocation or setting aside of bankruptcy order. Consequences of bankruptcy. Rights of creditors. Creditor’s meetings during bankruptcy. Committee of inspection. Declaration and distribution of bankrupt’s estate. Declaration and distribution of dividends. Final distribution. Second bankruptcy. |
2 |
Act 14 Section. |
Insolvency Act |
2011 |
Supervision and enforcement by the court.
Bankruptcy offences.
Part IV—Corporate Insolvency Liquidation.
Voluntary liquidation.
Consequences of voluntary liquidation.
Members’ voluntary liquidation.
3 |
Act 14 Section. |
66. 67. 68. |
69. 70. 71. 72. 73. 74. 75. 76. 77. |
78. 79.
82. 83. 84. 85. 86. |
87. 88. 89. 90. |
Insolvency Act 2011 |
Duty of liquidator to call general meeting at end of each year. Final meeting and dissolution. Alternative provisions as to annual and final meetings in case of insolvency. Creditors’ voluntary liquidation. Meeting of creditors. Appointment of liquidator. Appointment of committee of inspection. Proceedings of committee of inspection. Fixing of liquidator’s remuneration and cessation of directors’ powers. Power to fill vacancy in office of liquidator. Power of liquidator to accept shares etc in a creditors’ voluntary liquidation. Duty of liquidator to call meetings of company and of creditors at end of each year. Final meeting and dissolution. Members’ and creditors’ voluntary liquidation. Members’ and creditors’ voluntary liquidation. Distribution of the property of a company. Powers and duties of liquidator in voluntary liquidation. Power of court to appoint and remove liquidator in voluntary liquidation. Notice by liquidator of his or her appointment. Arrangement when binding on creditors. Power to apply to court to have questions determined or powers exercised. Costs of voluntary liquidation. Saving for rights of creditors and contributories. Liquidation subject to supervision by court. Power to order liquidation subject to supervision. Effect of petition for liquidation subject to supervision. Power of court to appoint or remove liquidators. Effect of supervision order. |
4 |
Act 14 Section. |
91. 92. 93. 94. 95. 96. 97. 98.
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101. 102. 103. 104. 105. 106. 107. 108. 109.
113. 114. |
115. 116. |
117. 118. |
Insolvency Act 2011 |
Liquidation by court. Jurisdiction. Circumstances in which court may appoint liquidator. Commencement of liquidation by court. Provisional liquidator. Notice of liquidation. Notice of appointment and of liquidation. Effect of liquidation. Special manager of company. Fundamental duties of a liquidator. General duties of liquidator. General provisions relating to liquidation. General powers of liquidator. Liquidator’s preliminary report. Liquidator’s interim reports. Liquidator’s final report. Liquidator’s powers to obtain documents. Liquidator’s power to examine and obtain information. Liquidator’s power to disclaim onerous property. Pooling of assets of associated companies. Vacation of the office of liquidator. Duties of directors, secretary and employees. Compliance order. Search and seizure. Absconding, during or pending liquidation. Completion of liquidation. Rights of creditors and shareholders. Creditors’ or shareholders’ meetings during liquidation. Committee of inspection during liquidation. Supervision and enforcement by the court. Court supervision of liquidation. Enforcement of liquidator’s duties. |
5 |
Act 14 Section. |
Insolvency Act |
2011 |
Part V—Arrangement in Respect of Individuals. Interim order
Arrangement
Supervision and enforcement by the court.
Part VI—Administration in Respect of Companies.
Provisional administration.
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6 |
Act 14 Section. |
145. 146. 147. 148. 149. 150. 151. 152. |
153. 154. 155. 156. 157. 158. 159.
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162. 163. 164. 165. 166. 167. 168. 169. 170. |
171. 172. |
Insolvency Act 2011 |
Duration of provisional administration. Creditors’ meeting to consider appointment of provisional administrator. Provisional administrator’s proposals. Creditors’ meeting to consider proposals. Requirements of administration deed. Execution of administration deed. Notice of termination of provisional administration. Transition to liquidation. Conduct of provisional administration. Powers of provisional administrator. Provisional administrator’s relationship with third parties. Role of director’s and secretary during provisional administration. Compliance order. Disposal of charged property during provisional administration. Liabilities of provisional administrator. Provisional administrator’s right to indemnity. Relief from liability for provisional administrator. Provisional administrator’s reports to the official receiver. Administration. Commencement of administration. Notice of administration. Effect of administration. Function of administrator. Creditors’ meetings during administration. Variation of administration deed by creditors. Termination of administration. Termination of administration by court. Notice on termination of administration. Provisional administrators and administrators. Remuneration of provisional administrator or administrator. Vacation of the office of provisional administrator or administrator. |
7 |
Act 14 Section. |
173. 174. |
175. 176. 177. 178. 179.
183. 184. 185. 186. 187. 188. 189. 190. 191. 192. 193. 194. 195. 196. 197. |
198. 199. 200. |
Insolvency Act 2011 |
Court supervision of provisional administrator or administrator. Enforcement of provisional administrator’s or administrator’s duties. Part VII—Corporate And Individual Receivership. Application of receivership provisions to foreign companies. Commencement of receivership. Liability for invalid appointment of receiver. Notice of receivership. Fundamental duty of receiver. General duties of receiver. Powers of receiver. Receiver’s relationship with third parties. Role of grantor in receivership. Rights and obligations of a grantor in receivership. Compliance order. Liabilities of receiver. Receiver’s right to indemnity. Relief from liability for receiver. Receiver’s preliminary report. Receiver’s other reports. General provisions on reports. Priorities for application of proceeds of receivership. Vacation in office of receiver. Powers of receiver on liquidation or bankruptcy. Court supervision of receiver. Enforcement of receiver’s duties. Termination of receivership by court. Part VIII—Official Receiver And Regulation of Insolvency Practitioners. Official receiver. Appointment of official receiver. Powers of the official receiver. official receiver’s seal. |
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Act 14 Section. |
Insolvency Act |
2011 |
Companies liquidation account.
Other provisions regarding insolvency practitioners.
Part IX—Cross-Border Insolvency. Reciprocity with other states or territories.
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Act 14 Insolvency Act 2011 Section. |
General provisions
Access of foreign representative and creditors to High Court.
Recognition of a foreign proceeding and relief.
Cooperation with foreign courts and foreign representatives.
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10 |
Act 14 Section. |
Insolvency Act |
2011 |
Concurrent proceedings.
Part X—General
SCHEDULES. First Schedule—Currency point. Second Schedule—Prescribed amount. Third Schedule—Proceedings at meetings of creditors. Fourth Schedule—Liquidation of assets of foreign company. |
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Act 14 |
Insolvency Act |
2011 |
THE INSOLVENCY ACT, 2011 An Act to provide for receivership, administration, liquidation, arrangements, bankruptcy, the regulation of insolvency practitioners and cross border insolvency; to amend and consolidate the law relating to receiverships, administration, liquidation, arrangements and bankruptcy; and to provide for other related matters. Date of Assent: 8th August, 2011. Date of Commencement: See section 1. Be it enacted by Parliament as follows: Part I—Preliminary.
This Act shall come into force on a date appointed by the Minister by statutory instrument and different dates may be appointed for different provisions.
In this Act, unless the context otherwise requires— “administrative receiver” means—
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Act 14 Insolvency Act 2011
“administrator” means a person specified as administrator in an administration deed under section 162; “admissible” with respect to a claim, means a claim that may be admitted in liquidation or bankruptcy; “appointing document” means the writing by or under which an appointment is made and includes a court order; “arrangement” means a composition in satisfaction of an individual’s debts or a scheme of arrangement of an individual’s affairs or other arrangement in respect of which an arrangement order is made under section 125; “arrangement order” means an order made to give effect to an arrangement; “asset” means an asset of a company in liquidation or in the estate of a bankrupt; “associated company” means a company or other business organisation in which the insolvent company holds majority or controlling shares ; “bankrupt” means an individual in respect of whom a bankruptcy order has been made under section 20; “bankruptcy debt”, means any of the following—
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Act 14 Insolvency Act 2011
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and in determining for the purposes of this Act, whether a liability in tort is a bankruptcy debt, the bankrupt is deemed to become subject to that liability by reason of an obligation incurred at the time when the cause of action arose; “bankruptcy’s estate” has the meaning under section 31; “bankruptcy order” means an order adjudicating an individual bankrupt; |
charge” |
means an interest in— |
(a) |
a chattel paper; |
(b) |
a document of title; |
(c) |
goods; |
(d) |
an intangible; |
(e) |
money; |
(f) |
a negotiable instrument; or |
(g) |
a security, |
created or provided by a transaction that in substance secures payment or performance of an obligation, without regard to the form of the transaction or the identity of the person who has title to the collateral and includes a mortgage or lien; “claim” means a claim in a liquidation or bankruptcy; “committee of inspection” means a committee of inspection appointed under sections 47, 71 or 116; “company” has the meaning assigned to it in the Companies Act; “court” means the High Court or a court presided over by a chief magistrate; |
14 |
Act 14 Insolvency Act 2011 “currency point” has the value assigned to it in the First Schedule; |
“debt” means a debt or liability, present or future, certain or contingent and includes an ascertained debt or liability for damages; “director” means—
“document” includes an invoice, order, letter, record, summons, notice, order other legal process, register, index, report, certificate or accounts, in any form, including any writing, material and information stored by means of any mechanical or electronic device and any material derived from the device; “foreign company” means a foreign company registered under the Companies Act; “grantor” means a person in respect of whose property a receiver is or may be appointed; “individual” with respect to Parts II, III and V, means a debtor in respect of whom a bankruptcy order is subsequently made; “insolvency” includes bankruptcy; 15 |
Act 14 Insolvency Act 2011 “insolvency practitioner” means a person who is not an official receiver who is qualified to act as an insolvency practitioner within the meaning of section 203; “instrument of incorporation” means the documents used to incorporate a company under the Companies Act; “lifting the veil” means the power which the court has where the shareholders or directors of the company in question or a person in a similar position have used their business to defraud creditors of the business or to do some other wrongful or illegal act, and the court ignores the protection from liability offered by the corporation or limited liability status of the business and makes the shareholders or directors or other person personally liable for debts, liabilities and obligations of the company; “liquidator” means a liquidator of a company appointed under sections 62 or 70; and includes a provisional liquidator; “Minister” means the Minister responsible for Justice; “official receiver” means a person appointed under section 198; “preferential debts” means the debts referred to in section 12 (4), (5) and (6) ; “prescribed amount” means the amount specified in the Second Schedule; “property” includes money, goods, things in action, proceeds, land and includes every description of property wherever situated, obligations, interest, whether present, future,, vested or contingent, arising out of or incidental to property; “proceeds” means identifiable or traceable personal property in any form derived directly or indirectly from any dealing with the collateral or proceeds of the collateral, and includes— |
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Act 14 Insolvency Act 2011
“property in receivership” means property in respect of which a receiver is appointed; “provisional administrator” means a provisional administrator appointed under section 139; “provisional liquidator” means a provisional liquidator appointed under section 94; “public notice” means notice given in accordance with section 256; “receiver” means a receiver or a manager and includes a receiver and manager or administrative receiver in respect of any property and any person appointed as receiver—
whether or not the person appointed is empowered to sell any of the property in receivership; “registrar” has the meaning assigned to it in the Companies Act; “secretary” in relation to a company means a person appointed to perform the duties of secretary under the Companies Act; “secured creditor” means a creditor who holds in respect of a debt or obligation a charge over property; 17 |
Act 14 Insolvency Act 2011 “security interest” means a right that is enforceable against persons generally, arising out of an interest in a chattel paper, a document of title, goods, an intangible, money, or a negotiable instrument and includes—
which secures payment or performance of an obligation; without regard to the form of the transaction and without regard to the identity of the person who has title to the collateral, including where title to the collateral is in the secured party. “shareholder” has the meaning assigned to it in the Companies Act; “special resolution” has the same meaning as in the Companies Act; |
“statutory demand” means a demand made in accordance with section 4; |
18 |
Act 14 Insolvency Act 2011 “transaction” includes a gift, settlement, agreement or arrangement and references to entering into a transaction are construed accordingly; “transferee company” means a company to which a transfer is being made; “transferor company” means the company effecting a transfer; “trustee”, in relation to bankruptcy means the trustee of the bankrupt’s estate; “working day” means any day other than a Saturday, Sunday or a public holiday; Part II—Inability to Pay Debts, Creditors’ Claims and Voidable Transactions.
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Act 14 Insolvency Act 2011
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Act 14 Insolvency Act
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2011 |
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Act 14 Insolvency Act 2011
Creditor’s claims.
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Act 14 Insolvency Act 2011
A fine or other monetary penalty imposed, whether before or after the commencement of the liquidation or bankruptcy, in respect of an offence committed before the commencement of the liquidation or bankruptcy and costs ordered to be paid with respect to proceedings for the offence, is admissible in liquidation or bankruptcy.
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Act 14 Insolvency Act 2011
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Act 14 Insolvency Act 2011
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Insolvency Act 2011
realise the asset subject to the charge and pay the secured reject the claim in whole or in part, and
within twenty working days after receipt of the notice, if he or she intends to rely on the security.
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Act 14 (b) |
(c) |
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Act 14 Insolvency Act 2011
and shall be paid accordingly out of those assets.
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27 |
Act 14 Insolvency Act 2011
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Act 14 Insolvency Act
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2011 |
Where there is a surplus after making the payments referred to in section 13—
Voidable transactions.
(1) A transaction involving a transfer of property by a company or individual to another person shall be voidable on the application of the creditor, receiver, liquidator or trustee where the transfer—
unless the debt was incurred in the ordinary course of the company’s or individual’s business and the transfer was made not later than forty five working days after the debt was incurred. 29 |
Act 14 Insolvency Act 2011
A transaction entered into by a company or individual is voidable on the application of the creditor, receiver, member or contributory, liquidator or trustee if—
30 |
Act 14 Insolvency Act 2011
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31 |
Act 14 Insolvency Act 2011
may apply to the court for an order that the transaction should not be set aside.
32 |
Act 14 Insolvency Act 2011
transaction, claim for the value of the benefit as a creditor in the liquidation or bankruptcy;
33 |
Act 14 Insolvency Act 2011
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Part III—Individual Insolvency
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34 |
Act 14 Insolvency Act 2011 make a bankruptcy order in respect of the debtor.
35 |
Act 14 Insolvency Act 2011 submission of the debtor’s statement of affairs under section 20.
36 |
Act 14 Insolvency Act 2011 court considers expedient.
The official receiver shall, within fourteen days after the commencement of the bankruptcy—
The creditors’ first meeting shall, appoint a trustee and vest the bankrupt’s estate in the trustee.
The trustee shall, within five working days after his or her 37 |
Act 14 Insolvency Act 2011 appointment, give public notice of—
38 |
Act 14 Insolvency Act 2011 receiver has been appointed.
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39 |
Act 14 Insolvency Act 2011 be prejudicial to the bankruptcy; or
Bankrupt’s estate
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40 |
Act 14 |
Insolvency Act 2011 |
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his or her family; or |
(c) |
property held by the bankrupt in trust for any other person; |
(d) |
the matrimonial home of the bankrupt; and |
(d) |
any other property of a value to be prescribed that the court |
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may exempt. |
“matrimonial home” means a building or part of a building in which a bankrupt and his or her spouse or, as the case may be, spouses, and their children, if any ordinarily reside together and includes—
“ordinarily resides” means residing in a place with some degree of continuity apart from accidental or temporary absences; and a bankrupt is ordinarily resident in a place when he or she intends to make that place his or her home for an indefinite period.
41 |
Act 14 Insolvency Act 2011 notice of the bankruptcy, or
General powers of trustee and conduct of bankruptcy.
42 |
Act 14 Insolvency Act 2011 charge over property of the bankrupt.
A trustee may appoint the bankrupt—
43 |
Act 14 Insolvency Act 2011 rights or liabilities of any other person.
The official name of a trustee in bankruptcy shall be ‘the trustee of the property of a bankrupt’, with an insertion of the name of the bankrupt and by that name the trustee may exercise any of the trustee’s functions, powers and duties under this Act.
44 |
Act 14 Insolvency Act 2011 trustee until a successor is appointed under subsection (2).
as the trustee may reasonably require for the purposes of carrying out his or her functions under this Act.
Where a person does not comply with a requirement of the trustee under section 33, the court may, on the application of the trustee, order the person to comply and may make ancillary orders as it thinks fit.
45 |
Act 14 Insolvency Act 2011 in or on that place or thing and deliver them to the trustee.
46 |
Act 14 Insolvency Act 2011 proceedings and any other matters court may consider pertinent.
the bankruptcy which is not satisfied at the date of discharge; or
to be paid out of the future earnings of the bankrupt or property acquired after the bankruptcy ,in such manner and subject to such conditions as the court may direct.
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47 |
Act 14 Insolvency Act 2011
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48 |
Act 14 Insolvency Act 2011 the certificate shall be subject to appeal.
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49 |
Act 14 Insolvency Act 2011 subject to appeal. |
Rights of creditors.
and the decision of a trustee to decline a request to call a creditors’ meeting may be reviewed by the court on the application of any one or more creditors.
50 |
Act 14 Insolvency Act 2011 trustee;
Declaration and Distribution of bankrupt’s estate
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51 |
Act 14 Insolvency Act 2011
52 |
Act 14 Insolvency Act 2011 days after the giving of the notice; and
Where—
any property which immediately before the subsequent order was in the bankrupt’s estate, shall vest in the trustee in the subsequent |
53 |
Act 14 Insolvency Act 2011 bankruptcy or administration in bankruptcy. Supervision and enforcement by the court.
54 |
Act 14 Insolvency Act 2011 application or the order is made.
by
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55 |
Act 14 Insolvency Act 2011 the trustee may appear and be heard at the hearing.
Bankruptcy offences.
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56 |
Act 14 Insolvency Act 2011
57 |
Act 14 Insolvency Act 2011 carried on business, the omission was honest and excusable. Part IV—Corporate Insolvency Liquidation
The liquidation of a company may be—
Voluntary liquidation.
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58 |
Act 14 Insolvency Act 2011 resolution passed under subsection (1).
Consequences of voluntary liquidation.
Any transfer of shares, not being a transfer made to or with the sanction of the liquidator and any alteration in the status of the members of the company, made after the commencement of a 59 |
Act 14 Insolvency Act 2011 voluntary liquidation, is void. Members’ voluntary liquidation.
liquidators.
consideration for sale of property of company.
60 |
Act 14 Insolvency Act 2011 transferor company, may—
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61 |
Act 14 Insolvency Act 2011 shall not be valid unless sanctioned by the court.
insolvency.
each year.
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62 |
Act 14 Insolvency Act 2011 company was disposed of; and (b) call a general meeting of the company to present the account and to give any required explanation.
and if the copy of the account is not sent or the return of the meeting is not made in accordance with this subsection, the liquidator shall be liable to a fine not exceeding five currency points for every day during which the default continues.
63 |
Act 14 Insolvency Act 2011 seven days after the making of the order.
Where a liquidator calls a meeting in accordance with section 65, sections 66 and 67 shall not apply, and sections 76 and 77 shall apply to the liquidation of the company as if the liquidation were a creditors’ voluntary liquidation and not a members’ voluntary liquidation, but that the liquidator shall not be required to call a meeting of creditors under section 76 at the end of the first year of the commencement of the liquidation unless the meeting held under section 65 is held more than three months before the end of that year. Creditors’ voluntary liquidation.
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64 |
Act 14 Insolvency Act 2011
the company, directors or director, shall be liable to a fine not exceeding fifty currency points, and, in the case of default by the company, every officer of the company who is in default shall be liable to a similar penalty.
65 |
Act 14 Insolvency Act 2011 by the company shall be the liquidator.
Subject to section 71, the following shall apply to the proceedings of 66 |
Act 14 Insolvency Act 2011 a committee of inspection—
67 |
Act 14 Insolvency Act 2011 committee of inspection.
Where a vacancy occurs, by death, resignation or otherwise in the office of a liquidator other than a liquidator appointed by or by the direction of, the court, the creditors may fill the vacancy.
Section 64 shall apply to creditors’ voluntary liquidation and to members’ voluntary liquidation, except that the powers of the liquidator under that section shall not be exercised without the approval of the court, or of the committee of inspection in substitution for the approval by special resolution.
68 |
Act 14 Insolvency Act 2011 currency points.
and if the copy of the account is not sent or the returns of the meetings are not made in accordance with this subsection, the liquidator shall be liable to a fine not exceeding five currency points for every day for which the default continues.
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69 |
Act 14 Insolvency Act 2011 called but that no quorum was realised.
Members’ and creditors’ voluntary liquidation.
Sections 79 to 86, apply to both members’ and creditors’ voluntary liquidation.
Subject to the provisions of this Act on preferential payments, the assets of a company shall, on its liquidation, be applied in satisfaction of its liabilities simultaneously and equally, and, subject to that application, shall unless the articles of association otherwise provide, be distributed among the members according to their rights and interests in the company.
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70 |
Act 14 Insolvency Act 2011
voluntary liquidation.
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71 |
Act 14 Insolvency Act 2011 appointment in the prescribed form.
72 |
Act 14 Insolvency Act 2011 fit.
All costs, charges and expenses properly incurred in the liquidation, including the remuneration of the liquidator, shall be payable out of the assets of the company in priority to all other claims.
The voluntary liquidation of a company shall not bar the right of any creditor or contributory to have it liquidated by court, but in the case of an application by a contributory, the court shall be satisfied that the rights of the contributories will be prejudiced by a voluntary liquidation. Liquidation subject to supervision by court.
Where a company passes a resolution for voluntary liquidation, the court may make an order that the voluntary liquidation shall continue, subject to the supervision of court and with the liberty for the creditors, contributories or other interested persons, to apply to court and generally on such terms and conditions as the court may think just.
An application for the continuance of a voluntary liquidation subject to the supervision of the court shall, for the purpose of giving jurisdiction to the court over actions, be taken to be a petition for |
73 |
Act 14 Insolvency Act 2011 liquidation by the court.
71. Liquidation by court.
The jurisdiction in liquidation matters shall be exercised by the High |
74 |
Act 14 Insolvency Act 2011 Court.
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(a) |
the company; |
(b) |
a director of the company; |
(c) |
a shareholder of the company; |
(d) |
a creditor of the company; |
(e) |
a contributory; or |
(f) |
the official receiver. |
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75 |
Act 14 Insolvency Act 2011 liquidation.
The provisional liquidator shall, within fourteen days after the commencement of the liquidation—
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76 |
Act 14 Insolvency Act 2011
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77 |
Act 14 Insolvency Act 2011 address.
the assets or the proceeds of the assets of the company in accordance with this Part and Part VIII.
78 |
Act 14 Insolvency Act 2011 assets than would be effected in a liquidation.
Without prejudice to section 99, a liquidator shall have all the other functions and duties specified in this Act and shall in particular—
records of the company, to be inspected by—
A liquidator shall have all the powers necessary to carry out the functions and duties of liquidator under this Act and may delegate the |
79 |
Act 14 Insolvency Act 2011 powers to his or her appointed agent.
and shall make the report available at his or her address for inspection by every known creditor, shareholder or contributory.
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80 |
Act 14 Insolvency Act 2011
81 |
Act 14 Insolvency Act 2011 company in respect of a debt for services rendered to the company before the commencement of the liquidation.
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82 |
Act 14 Insolvency Act 2011 unless that person is, at the time of the appearance or assistance, an employee of the company.
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83 |
Act 14 Insolvency Act 2011 commits an offence and is liable on conviction to a fine not exceeding twenty four currency points or imprisonment not exceeding one year or both.
On application of the liquidator or any creditor or shareholder, the court may, if satisfied that it is just and equitable to do so, lift the veil 84 |
Act 14 Insolvency Act 2011 of any associated company on terms and conditions as it may consider fit to facilitate and ensure due completion of the liquidation process in a just and equitable manner and may order that—
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85 |
Act 14 Insolvency Act 2011
Where a person does not comply with a requirement of a liquidator under section 105 or 110 the court may, on the application of the liquidator, order the person to comply and make ancillary orders as it thinks fit.
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86 |
Act 14 Insolvency Act 2011 within fourteen days after the date of issue of the warrant;
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87 |
Act 14 Insolvency Act 2011 accounts of the liquidation and a statement indicating that—
Rights of creditors and shareholders.
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88 |
Act 14 Insolvency Act 2011
the liquidator shall refer the matter to the court for a decision.
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89 |
Act 14 Insolvency Act 2011 those costs shall be deemed to be expenses properly incurred in the liquidation.
Supervision and enforcement by the court.
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90 |
Act 14 Insolvency Act 2011 or validly assumed custody or control of any property; or |
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91 |
Act 14 Insolvency Act 2011 (c) remove the liquidator from office. |
Part V—Arrangement in Respect of Individuals. Interim order |
92 |
Act 14 Insolvency Act 2011
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93 |
Act 14 |
Insolvency Act |
2011 |
Subject to sections 123(2) and (3), an interim order ceases to have effect at the end of fourteen working days after the making of the order.
Upon the court making an interim order, the debtor shall submit to the proposed supervisor—
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94 |
Act 14 |
Insolvency Act |
2011 |
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95 |
Act 14 Insolvency Act 2011 creditors’ meeting to consider the debtor’s proposed arrangement.
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96 |
Act 14 Insolvency Act 2011
Arrangement.
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97 |
Act 14 |
Insolvency Act |
2011 |
Immediately after the arrangement order is made, the supervisor shall—
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98 |
Act 14 Insolvency Act 2011 from realising or dealing with charged property except so far as the arrangement provides for a secured creditor who voted in favour of the resolution resulting in the arrangement.
The supervisor shall supervise the implementation of the arrangement and he or she shall on the day of his or her appointment notify the official receiver in writing of the appointment.
A supervisor is entitled to—
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99 |
Act 14 |
Insolvency Act |
2011 |
An arrangement terminates if—
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100 |
Act 14 |
or |
Insolvency Act |
2011 |
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101 |
Act 14 Insolvency Act 2011 discriminatory against, one or more creditors; or
Where an arrangement is terminated, the supervisor shall—
Supervision and enforcement by the court.
the court may, review or fix the remuneration of the supervisor at a level which is reasonable in the circumstances.
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102 |
Act 14 Insolvency Act 2011 supervisor to refund the amount. |
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103 |
Act 14 |
Insolvency Act |
2011 |
Part VI—Administration in Respect of Companies.
Provisional administration.
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104 |
Act 14 Insolvency Act 2011 this section the company must by special resolution agree that the company needs to make a settlement with the company’s creditors.
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105 |
Act 14 |
Insolvency Act |
2011 |
Without prejudice to section 140, a provisional administrator shall perform other functions and duties specified in this Act and shall—
|
106 |
Act 14 Insolvency Act 2011
the provisional administrator shall be registered with the official receiver and registrar.
|
107 |
Act 14 Insolvency Act 2011 levied against the company or its property; and |
|
108 |
Act 14 Insolvency Act 2011
|
109 |
Act 14 Insolvency Act 2011
110 |
Act 14 Insolvency Act 2011 provisional administration; and |
An administration deed shall specify—
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111 |
Act 14 |
Insolvency Act |
2011 |
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151. Notice of termination of provisional administration. |
Where— |
|
(a) |
the deed is not executed within the period of execution |
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specified in section 150(2); |
(b) |
the creditors resolve that the provisional administration |
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should end; or |
(c) |
the creditors don’t pass a resolution under section 148, |
the provisional administrator shall as soon as practicable give public |
112 |
Act 14 Insolvency Act 2011 notice and send notice to the official receiver, registrar and court indicating that the provisional administration has ended without the execution of an administration deed.
Conduct of provisional administration.
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113 |
Act 14 |
Insolvency Act |
2011 |
A person paying money or giving other consideration to a provisional administrator shall not be required to enquire whether the provisional administrator was validly appointed or authorised to act as provisional administrator.
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114 |
Act 14 |
Insolvency Act |
2011 |
Where—
court may order the director or secretary to comply and may make ancillary orders as it thinks fit.
A provisional administrator shall not dispose of property subject to a charge unless—
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115 |
Act 14 Insolvency Act 2011
the provisional administrator shall be personally liable, to the extent specified in subsection (4), for rent and any other payments becoming due under the agreement.
whichever is the earlier, but the court may further limit or excuse the liability of the provisional administrator.
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116 |
Act 14 Insolvency Act 2011 any agreement in subsection (3); or |
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117 |
Act 14 |
Insolvency Act |
2011 |
Administration.
|
118 |
Act 14 Insolvency Act 2011 administration deed by the company in a general meeting. |
Immediately after the commencement of the administration, the administrator shall—
|
119 |
Act 14 Insolvency Act company’s property; and |
2011 |
The administrator shall supervise the implementation of the administration deed.
|
120 |
Act 14 Insolvency Act 2011 court may, on the application of a creditor or the administrator, cancel or confirm the variation, in whole or in part and subject to conditions as it thinks fit and may make other order as it thinks appropriate.
An administration shall be terminated where—
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121 |
Act 14 Insolvency Act 2011 |
material to creditors in deciding whether to vote in favour of the administration was not given to them; or |
Where an administration has been terminated the administrator shall—
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122 |
Act 14 Insolvency Act 2011 company’s creditors; |
Provisional administrators and administrators.
administrator. |
123 |
Act 14 |
Insolvency Act |
2011 |
|
124 |
Act 14 Insolvency Act 2011 functions of the provisional administrator or administrator. |
|
125 |
Act 14 Insolvency Act 2011
Part VII—Corporate and Individual Receivership.
|
126 |
Act 14 |
Insolvency Act |
2011 |
|
127 |
Act 14 Insolvency Act 2011
|
128 |
Act 14 Insolvency Act 2011 property in receivership;
|
129 |
Act 14 Insolvency Act 2011 separate from other money received in the course of, but not relating to, the receivership and separate from other money held by or under the control of the receiver;
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130 |
Act 14 Insolvency Act 2011 who is an administrative receiver may— |
A person paying money or giving other consideration to a receiver shall not be required to inquire whether the receiver was validly appointed or is authorised to act as a receiver.
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131 |
Act 14 Insolvency Act required by the receiver. |
2011 |
|
132 |
Act 14 Insolvency Act 2011 shall lapse after fourteen days but court may, in appropriate cases, entertain informal applications for relief inter partes.
Where a person does not comply with section 183 or with a request of the receiver made under that section, on the application of the receiver, the court may order the grantor or any director or secretary, to comply and may make ancillary orders as it thinks fit.
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133 |
Act 14 Insolvency Act 2011 shall be personally liable— |
a receiver shall be personally liable, to the extent specified in subsection (4) for rent and any other payments due under the agreement.
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134 |
Act 14 Insolvency Act 2011
|
135 |
Act 14 Insolvency Act 2011 appointment of the receiver; or |
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136 |
Act 14 Insolvency Act 2011
A receiver shall, within twenty working days after—
prepare and send to the persons referred to in section 191(2) a further report with particular reference where relevant, to the matters |
137 |
Act 14 Insolvency Act 2011 required in the preliminary report, summarising the status of the property under receivership at the specified dates and the conduct of the receivership, including all amounts received and paid during the period to which the report relates.
within five working days after its preparation.
receiver shall send the copy of the report to the person requesting for it, upon payment of a prescribed fee to the receiver.
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138 |
Act 14 Insolvency Act 2011 receiver’s office during regular business hours. |
the receiver shall apply the property subject to the security interest at the date of the appointment of the receiver first, in respect of the receiver’s indemnity in full under section 187, to the extent that full payment cannot be made out of other property forming part of the property in receivership.
|
139 |
Act 14 |
Insolvency Act |
2011 |
so—
|
140 |
Act 14 |
Insolvency Act |
2011 |
during or after receivership the court may—
|
141 |
Act 14 Insolvency Act 2011 found by the court to be unreasonable in the circumstance, order the receiver to refund the amount;
|
142 |
Act 14 Insolvency Act 2011
|
143 |
Act 14 |
Insolvency Act |
2011 |
Part VIII—Official Receiver and Regulation of Insolvency Practitioners. Official receiver.
An official receiver shall be appointed by the Minister to perform the functions of official receiver under this Act.
The official receiver shall—
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144 |
Act 14 Insolvency Act 2011
The official receiver shall have an official seal.
An account, to be called the companies liquidation account, shall be kept by the official receiver with a bank prescribed by the Minister by regulations and all monies received by the official receiver in respect of proceedings under this Act shall be paid into that account.
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145 |
Act 14 Insolvency Act 2011 bank prescribed by the Minister. |
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(1) Insolvency practitioner means a person who acts as— |
(a) |
a receiver; |
(b) |
a provisional administrator; |
(c) |
an administrator; |
(d) |
a provisional liquidator; |
(e) |
a liquidator; |
(f) |
a proposed supervisor of a voluntary arrangement; |
(g) |
a supervisor of a voluntary arrangement; or |
(h) |
a trustee in bankruptcy. |
|
146 |
Act 14 Insolvency Act 2011 insolvency practitioner unless— |
|
147 |
Act 14 Insolvency Act 2011
The following persons shall not be appointed or act as liquidators, provisional liquidators, provisional administrators or administrators—
The following persons shall not be appointed or act as receiver—
|
148 |
Act 14 Insolvency Act 2011
A creditor of an individual may not be appointed or act as a supervisor of an individual’s arrangement or as trustee of his or her estate.
the court shall make a prohibition order with a duration of not more than five years or as the court thinks fit.
|
149 |
Act 14 Insolvency Act 2011
Other provisions regarding insolvency practitioners.
Where two or more insolvency practitioners are appointed, they may act jointly and severally to the extent that they share the same powers unless expressly provided to the contrary in the appointing document.
An insolvency practitioner shall have qualified privilege in any proceedings for defamation in respect of any matter included in any report or other document prepared under this Act. Part IX—Cross-border Insolvency. Reciprocity with other States or territories.
150 |
Act 14 Insolvency Act 2011
Where a bankruptcy or any appointment of a special manager or interim receiver, has been made in any reciprocating territory in bankruptcy proceedings against a debtor with property in Uganda, the order or appointment shall, subject to this Part, have the same effect as if it had been made in bankruptcy proceedings against the debtor in Uganda and the debtor and his or her creditors shall be taken to be in the same position, with the same rights and privileges and subject to the same disqualifications, restrictions, obligations and liabilities in every respect as if the order or appointment was made under this Act.
Where a bankruptcy order of adjudication is made by a reciprocating court, the property of the bankrupt situated in Uganda shall, by virtue of the order, vest in the trustee of the property of the bankrupt in the reciprocating state, in the same manner as if the bankruptcy order and the appointment of trustee had been made in Uganda and the superintendence of the trustee shall continue to be exercised by the committee of inspection appointed in the reciprocating state or, if there is no such committee, by the reciprocating court. |
151 |
Act 14 Insolvency Act 2011
state in insolvency matters.
|
152 |
Act 14 Insolvency Act 2011 property except as agent.
in Uganda.
|
153 |
Act 14 Insolvency Act 2011 is filed under subsection (3) within a prescribed time.
The official receiver in Uganda shall remit the proceeds of the realisation of the property of the bankrupt and all other money of the estate coming into his or her hands as an agent to the person for whom he or she is acting, after deducting the expenses that may have been properly incurred by him or her, in accordance with the law of the reciprocating State in which the bankruptcy order was made.
Where an order of bankruptcy has been made in a reciprocating State and the official receiver of Uganda is acting as an agent, proof of debts contracted by the debtor in Uganda may be filed with the local official receiver in Uganda in the form prescribed by the law of the reciprocating state and in such cases it shall be his or her duty to receive, deal with and forward in the manner prescribed by the rules made under this Part proof to the official receiver or trustee, of the reciprocating state.
On the application of the official receiver, any creditor or other interested person, where it appears to court that bankruptcy proceedings have been instituted in a reciprocating court against a debtor with property situated in Uganda, the court may, where no proceedings have been instituted in Uganda, regarding the person, property and affairs of the debtor, exercise all the powers to stay the pending proceedings and to grant any other necessary interim relief or to arrest the debtor or seize any documents, records, money or |
154 |
Act 14 Insolvency Act 2011 goods or the debtor.
Any order or warrant made or issued by a reciprocating court shall be enforced by the court in Uganda in the same manner, in all aspects as if the order or warrant had been made or issued in Uganda.
Subject to this section, a court in a reciprocating State shall have sole jurisdiction in all matters in or arising out of any bankruptcy proceedings taken before the court against a debtor with property in Uganda and a court in Uganda shall not entertain any suit, application or other matter arising in or out of such proceedings except—
155 |
Act 14 Insolvency Act 2011 sine dine;
|
156 |
Act 14 Insolvency Act 2011 the debtor would have been administered under subsection (6), if the order was not made.
the official receiver, trustee, interim receiver or special manager appointed under this Act shall take all steps as may be lawful in a reciprocating state for the proper administration of any property of the debtor or bankrupt situated in that state.
157 |
Act 14 Insolvency Act 2011 things in the reciprocating territory as may be lawful for the administration of the estate.
|
158 |
Act 14 Insolvency Act 2011 on business in a reciprocating State who has an interest in bankruptcy proceedings instituted in Uganda against a debtor with property in the reciprocating State. General provisions.
“establishment” means any place of operations where the debtor carries out a permanent economic activity; “foreign proceeding” means collective judicial or administrative proceeding in a foreign State and includes an interim proceeding, under the law of insolvency, where the assets and affairs of the debtor are subject to control or supervision by a foreign court, for the purpose of reorganisation or liquidation; “foreign main proceeding” means a foreign proceeding taking place in the State where the debtor has the centre of its main interests; “foreign non-main proceeding” means a foreign proceeding other than a foreign main proceeding, taking place in a State where the debtor has an establishment; “foreign representative” means a person or body, including one appointed on an interim basis, authorized in a foreign proceeding to administer the reorganisation or the liquidation of the debtor’s assets or affairs or to act as a representative of the foreign proceeding; “foreign court” means a judicial or other authority competent to control or supervise a foreign proceeding; “proceedings in this Part of the Act” means liquidation or bankruptcy proceedings. |
159 |
Act 14 Insolvency Act 2011
Sections 228 to 252 apply where—
Where any provision of this Part conflicts with an obligation of Uganda arising out of any treaty or other form of agreement to which it is a party with one or more States, the treaty or agreement shall prevail.
A liquidator or trustee is authorised to act in a foreign State in a proceeding under this Part of the Act as permitted by the applicable foreign law.
|
160 |
Act 14 |
Insolvency Act |
2011 |
Nothing in this Part limits the power of a court or a trustee or liquidator to provide additional assistance to a foreign representative under the other laws of Uganda. Access of foreign representative and creditors to the High Court.
Upon recognition of a foreign proceeding by the High court, the foreign representative shall be entitled to participate in a proceeding regarding the debtor under this Act.
|
161 |
Act 14 Insolvency Act 2011
creditors, the notification shall—
Recognition of a foreign proceeding and relief.
|
162 |
Act 14 |
Insolvency Act |
2011 |
|
163 |
Act 14 |
Insolvency Act |
2011 |
From the time of filing the application for recognition of the foreign proceeding, the foreign representative shall immediately inform the court of—
of a foreign proceeding.
|
164 |
Act 14 Insolvency Act 2011 jeopardy; or
|
165 |
Act 14 Insolvency Act 2011 the interests of the creditors, the court may, at the request of the foreign representative, grant any appropriate relief, including—
|
166 |
Act 14 Insolvency Act 2011 information required in that proceeding. |
Upon recognition of foreign proceedings the foreign representative may, with the leave of court where the requirements of the law of Uganda are met, intervene in any proceedings in which the debtor is a party. Cooperation with foreign courts and foreign representatives.
|
167 |
Act 14 Insolvency Act 2011
Cooperation referred to in sections 245 and 246 of this Act may be achieved by any appropriate means, including—
|
168 |
Act 14 |
Insolvency Act Concurrent proceedings. |
2011 |
When a foreign proceeding and a proceeding under this Act regarding the same debtor are taking place concurrently regarding the same debtor, the court shall seek cooperation and coordination under sections 245, 246 and 247 as follows—
|
169 |
Insolvency Act 2011
reviewed by the court and shall be modified or
in granting, extending or modifying relief granted to a
In an application for recognition of foreign proceeding under section
|
Act 14 |
(c) |
170 |
Act 14 Insolvency Act 2011 terminate relief for the purpose of facilitating coordination of the proceedings.
In the absence of evidence to the contrary, recognition of a foreign main proceeding is, for the purpose of commencing a proceeding under this Act, proof that the debtor is unable to pay his or her debts.
A creditor who receives part-payment in respect of a claim in a proceeding under a law relating to insolvency in a foreign State may not receive a payment for the same claim in a proceeding under this Act regarding the same debtor, where the payment to the other creditors of the same class is proportionately less than the payment the creditor has already received, except for secured claims or rights in rem. Part X—General
|
171 |
Act 14 Insolvency Act 2011
|
The acts of— |
|
(a) |
an insolvency practitioner; |
(b) |
the official receiver; |
(c) |
a creditors’ committee; or |
(d) |
a committee of inspection, |
shall be valid notwithstanding any defect in the appointment to office, election or qualifications of the person or any member of the committee as the case may be.
A person required to give public notice of any matter shall do so by inserting notice of the matter—
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172 |
Act 14 Insolvency Act 2011 Uganda in the official language. |
In a liquidation by the court, any disposition of the property of the company, including things in action and any transfer of shares or alteration in the status of the members of the company, made after the commencement of the liquidation shall unless the court otherwise orders, be void.
Where insolvency proceedings are commenced against a company which is listed on any stock exchange, the company shall within fourteen working days notify the Capital Markets Authority in writing of the fact of the commencement of the proceedings.
Any person who commits an offence under this Act, for which no other penalty is specifically provided, is on conviction liable, to a fine not exceeding twenty four currency points or imprisonment not exceeding two years and shall, in addition, pay a default fine.
|
173 |
Act 14 Insolvency Act 2011 of proceedings under this Act; |
The Minister may, with the approval of cabinet, by statutory instrument, amend the Schedules.
The following enactments are repealed—
Where any case, relating to receivership, liquidation or bankruptcy, was pending before the court prior to the coming into force of this Act, that case shall continue to be heard by that court until completion.
The rules of equity and common law applicable to corporate 174 |
Act 14 Insolvency Act 2011 insolvency and bankruptcy of individuals and receivership shall continue in force except as they are inconsistent with this Act. |
SCHEDULES. |
FIRST SCHEDULE. CURRENCY POINT |
Section 2 |
One currency point is equivalent to twenty thousand shillings. |
175 |
Act 14 |
Insolvency Act |
2011 |
SECOND SCHEDULE |
sections 2, 4 |
prescribed amount |
The prescribed amount for the purposes of section 4 is fifty currency points in the case of an individual and one hundred currency points in the case of a company |
176 |
Act 14 |
Insolvency Act |
2011 |
THIRD SCHEDULE Sections 24(b), 46(2), 69(1)(b), 115(2), 124(4), 146(3), 148(1), 166(3), 172(4) proceedings at meetings of creditors.
|
|
177 |
Act 14 Insolvency Act 2011 meeting to be held under paragraph 1(a) or (b) or (c), |
shall be given to every creditor entitled to attend the meeting and to any liquidator not less than ten working days before the meeting.
|
178 |
Act 14 Insolvency Act 2011
|
179 |
Act 14 Insolvency Act 2011 and the number of votes cast by each creditor in favour of the resolution; and
|
180 |
Act 14 |
Insolvency Act |
2011 |
FOURTH SCHEDULE. Section 56(1) LIQUIDATION OF ASSETS OF FOREIGN COMPANIES. 1. Part IV applies to the liquidation of the property in Uganda, of a foreign company, with the following modifications and exclusions:
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181 |