Insolvency Law at Ghana
In Ghana, insolvency law is governed primarily by the Corporate Insolvency and Restructuring Act, 2020 (Act 1015). This Act replaced the outdated provisions under the Companies Act and is intended to modernize and streamline Ghana’s insolvency framework. Here's an overview of key aspects:
🔍 1. Purpose of the Insolvency Act (Act 1015)
Facilitate the rescue and restructuring of viable but distressed companies.
Provide mechanisms for liquidation of non-viable companies in an orderly manner.
Protect the interests of creditors, shareholders, and employees.
Promote good corporate governance and financial discipline.
🏢 Key Features of Act 1015
A. Administration and Restructuring
Administration allows companies in distress to be managed by a licensed insolvency practitioner, aiming for rehabilitation.
A moratorium is placed on legal actions against the company during this period.
B. Liquidation
If a company cannot be rescued, it may be liquidated (wound up).
Assets are sold, and proceeds distributed to creditors in a defined order of priority.
C. Insolvency Practitioners
Must be licensed by the Office of the Registrar of Companies (ORC).
Oversee restructuring, administration, and liquidation processes.
D. Voidable Transactions
Certain transactions made before insolvency (like undervalued transactions or preferences) can be set aside by the administrator or liquidator.
E. Creditor Rights and Committees
Creditors can vote on restructuring plans and form committees to oversee administration.
F. Cross-border Insolvency
Incorporates principles from UNCITRAL Model Law to handle cases involving foreign companies or assets.
👩🏽⚖️ Regulatory Oversight
The Office of the Registrar of Companies plays a major role in regulating insolvency practitioners and maintaining oversight of corporate insolvency proceedings.
📌 Recent Developments
Act 1015 is part of a broader reform under Ghana’s Companies Act, 2019 (Act 992).
Emphasizes business rescue rather than automatic liquidation.
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