Key changes brought by the Insolvency Amendment Act 2022
The President assented to the Insolvency Amendment Act 2022 on 7th September 2022. The amendments ease how regional trade is conducted and reduce individual periodic restrictions on people declared bankrupt to avoid the usual stigma. Reducing the years implies that any person declared bankrupt will no longer wait for too long to get on their feet again.
The Key changes brought by the Insolvency Amendment Act 2022 include the following:
Timeline for filing an Administration deed.
Administrators will be required to file an Administration deed in Court within 5 (Five) working days from the date of its execution and court will thereafter issue an Administrative order.
Qualifications of insolvency practitioners in Uganda.
According to the Insolvency Amendment Act 2022, the Minister has the mandate to prescribe additional qualifications for being an Insolvency Practitioner. The current qualifications for being an Insolvency practitioner are being a Lawyer or an accountant or a chartered secretary duly registered with the relevant Professional body.
Reduction on the duration of the Bankruptcy implications.
Restriction periods for a person declared bankrupt to run for office were reduced. The restrictions like not contesting as a Member of Parliament, not becoming a Judge et_cetera which are placed on any person declared bankrupt will last for 2 years as opposed to the former 5 (Five) years.
Borrowing by the supervisor of an arrangement.
If allowed by the creditors and court, the supervisor of an arrangement will be able to borrow money to execute the arrangement.
Timeline for calling of the Creditor’s meeting.
Upon commencement of provisional Administration, the Administrator will have 15 days within which to call a creditors meeting as opposed to the former 10 days.
Creditors given powers to apply for Interim protective orders.
Creditors are now mandated to apply for interim protective orders. Before the Amendment, before the amendment, this was a preserve of the Debtors. Creditors can also ask court to appoint a provisional administrator.
Introduction of a new offense.
The Insolvency Amendment Act 2022 introduced a new criminal offense of unlawful dealing with the assets of an insolvent person. Any person who commits such will on conviction be liable to imprisonment not exceeding five years or two hundred and fifty currency points or both.
Access to Company information.
The Insolvency Amendment Act 2022 grants a right to anyone to request information in possession of a trustee, receiver, liquidator, administrator or supervisor subject to the Access to Information Act, 2015 and the Data protection and privacy act, 2019.
In summation, herein above are the salient amendments brought about by the Insolvency Amendment Act 2022.