Section 643 of Insolvency Act CAP 53: What steps company's directors have to take to obtain a moratorium
(1) Deleted by Act No. 1 of 2021
(2) If the directors of an eligible company wish to obtain a moratorium, they shall— (a) prepare—
(i) a document setting out why a moratorium is desirable, which may include evidence that it will assist in agreeing an informal restructuring or other agreement with creditors or entering a formal insolvency procedure which could lead to the rescue or efficient liquidation of the company;
(ii) a statement of the company's financial position containing such particulars of its creditors and of its debts and other liabilities and of its assets as may be prescribed by the insolvency regulations for the purposes of this section, and such other information as may be so prescribed; and
(b) appoint as its monitor an authorised insolvency practitioner who has consented to supervise
it;
(3) The directors shall submit the documents required under subsection (2) to the monitor for consideration and comment.
(4) If the monitor requires them to do so, the directors shall provide such other information necessary to enable the monitor to comply with subsection (5).
(5) The monitor shall submit to the directors a statement indicating whether or not, in that monitor's opinion—
(a) the proposed moratorium has a reasonable prospect of achieving its aim;
(b) the company is likely to have sufficient funds available to it during the proposed moratorium to enable it to carry on its business; and (c) deleted by Act No. 1 of 2021.
(6) In forming an opinion on the matters referred to in subsection (5), the monitor is entitled to rely on the information contained in the document and statement submitted under subsection (2), and provided in accordance with subsection (4), unless that monitor has reason to doubt its accuracy.
(7) The reference in subsection (5)(b) to the company's business is to that business as the company proposes to carry on during the proposed moratorium.
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- Section 644 - What directors have to do to obtain moratorium
(1) To obtain a moratorium, the directors of a company shall lodge with the Court—
(a) the documents referred to in section 643(2)(a);
(b) a statement to the effect that the company is eligible for...
- Section 645 - Duration of moratorium
(1) A moratorium takes effect when the documents specified in section 644(1) are lodged with the Court.
(2) A moratorium ends after thirty days from and including the day on which the moratorium...
- Section 646 - What happens when moratorium takes effect
(1) When a moratorium takes effect in respect of a company, the directors of the company shall immediately give notice of that fact to the monitor.
(2) If subsection (1) is not complied with, each of...
- Section 647 - Duty of monitor to publish and give notice that moratorium has taken effect
(1) As soon as practicable after being notified that a moratorium has taken effect, the monitor shall— (a) publish—
(i) once in the Gazette;
(ii) once in at least two newspapers circulating in the...
- Section 648 - Notification of end of moratorium to be given by monitor
(1) Within fourteen days after a moratorium has come to an end, the monitor shall— (a) publish—
(i) once in the Gazette;
(ii) once in at least two newspapers circulating in area in which the company...
- Section 649 - Effect of moratorium on creditors and others
(1) While a moratorium has effect in respect of a company—
(a) an application for liquidation of the company may not be made; (b) a meeting of the company may be convened or requisitioned—
(i) only...
- Section 651 - Security not to be enforced unless it would benefit the company
Security given by a company at a time when a moratorium has effect in relation to the company can be enforced only if, at that time, reasonable grounds existed for believing that the security would...
- Section 652 - Application of sections 653 to 657 to company in respect of which a moratorium has effect
(1) Sections 653 to 657 apply to a company in respect of which a moratorium currently has effect.
(2) The fact that a company enters into a transaction in contravention of a provision of sections 653...
- Section 653 - Company invoices and other documents to state monitor's name and that moratorium has effect
(1) A company in respect of which a moratorium has effect shall ensure that every invoice, order for goods or services, business letter or order form (whether in hard copy, electronic or any other...
- Section 654 - Restrictions on company obtaining credit during moratorium
(1) A company in respect of which a moratorium has effect may not obtain credit exceeding twentyfive thousand shillings from a person who has not been informed that a moratorium has effect in respect...
- Section 655 - Restrictions on disposal of property and making payments by company
(1) Subject to subsection (2), a company in respect of which a moratorium has effect may dispose of any of its property only if—
(a) there are reasonable grounds for believing that the disposal will...
- Section 656 - Restriction on company paying debts and other liabilities
(1) Subject to subsection (2), a company in respect of which a moratorium has effect may make a payment in respect of a debt or other liability of the company that was in existence before the...
- Section 657 - Circumstances in which company may dispose of property and goods that are subject to a security or held under credit purchase transaction
(1) This section applies to—
(a) property of the company that is subject to a security; and
(b) goods that are in the possession of the company under a credit purchase transaction.
(2) A company...
- Section 658 - Monitor's to monitor activities of company during moratorium
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- Section 659 - Withdrawal of monitor's consent to act
(1) Except with the approval of the Court, a provisional supervisor may withdraw consent to monitor a moratorium only if, during the moratorium—
(a) the monitor concludes that the company will not...
- Section 660 - Creditors and others may challenge monitor's conduct during moratorium by application made to the Court
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- Section 661 - Creditor may pursue claim against monitor for loss
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- Section 662 - Replacement of monitor by the Court
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- Section 669 - Extension of moratorium
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- Section 670 - Conditions for extension of moratorium
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- Section 671 - Decisions to extend or further extend moratorium
(1) If the Court extends, or further extends, the moratorium, the monitor shall within seven days of the order, lodge a copy of the order with the Registrar for registration.
(2) Deleted by Act No. 1...
- Section 674 - Member or creditor of company may challenge actions of directors
(1) This section applies to and in relation to acts or omissions of the directors of a company during a moratorium.
(2) A creditor or member of the company may apply to the Court for an order under...
- Section 675 - Offences under this Division
(1) This section applies to a company in respect of which a moratorium has or had effect.
(2) A person who, at any time during the twelve months immediately preceding the date on which the moratorium...
- Section 677 - Interpretation: Part X
In this Part—
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"relevant office-holder" means—
(a) in relation to a company under administration, the...
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(2) If a person has control over money, documents or other property to which the company appears to be entitled,...
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(2) This section applies to the following persons—
(a) those...
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(2) In this section, "relevant time" has the meaning given by section 684.
(3) On forming the reasonable belief...
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- Section 684 - What "relevant time" means in sections 682 and 683
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- Section 685 - Orders under sections 682 and 683: ancillary provisions
(1) An order under section 682 or 683 with respect to a transaction or preference entered into or given by a company may, subject to subsection (
2)—
(a) require property transferred as part of the...
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(2) The relevant office-holder may...
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(a) an...
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- Section 689 - Supply of utility services to companies in liquidation or under administration
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(2) In this...
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- Section 691 - Enforcement of company's obligations to lodge documents with, or give notice to, the Registrar of Companies
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(b) to give notice to the Registrar of any matter, the...
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- Section 694 - Offences by bodies corporate
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(b) the offence is proved to have been committed with the consent or connivance of, or to be attributable to...
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- Section 696 - Legal proceeding under this Act not to be invalidated or set because of a defect unless person detrimentally affected
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(2) Except as otherwise expressly provided by this Act, a notice of...
- Section 700 - Suspension of bankruptcy, liquidation or administration pending determination of appeal
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- Section 701 - Appointment of Official Receiver and others
(1) The Cabinet Secretary shall, as and when necessary, appoint suitably qualified persons to the positions of—
(a) Official Receiver; and
(b) one or more Deputy Official Receivers.
(2) The...
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