GHANA Trends and Developments Contributed by: Victoria Bright and Maxwell Amihere, Addison Bright Sloane
distress to continue in existence as a going concern; • the provision of temporary management of the affairs, business and property of a dis - tressed company; and • in appropriate cases, the placement of a tem - porary freeze on the rights of creditors and claimants against the company. These remedies were previously unavailable under the Bodies Corporate (Official Liquida - tion) Act, 1963 (Act 183), which only catered for winding-up procedures in the case where a company’s liabilities exceeded its assets or it was unable to pay its debts. The measuring yardstick for insolvency remains the ability or otherwise of a company to meet its financial obligations when they fall due. Act 1015 allows a distressed company some protection to reorganise its affairs without being burdened with the threat of liquidation from its creditors. The administration of a company begins when an administrator is appointed. Only a natural person can be appointed as an administrator and they must be duly qualified as an insolvency practi - tioner. The next stage after administration is for creditors of the company to execute a restructur - ing agreement. The restructuring officer (RO) has the responsibility to implement the restructuring agreement with appropriate notifications to the creditors and the Registrar of Companies. The restructuring agreement provides for the terms and conditions of the restructured debt such as moratorium period and payment plans. Another novelty introduced by the Act is the introduction of the regime for insolvency prac - titioners as well as the insolvency division at the Office of the Registrar of Companies. Pre - viously, there existed no professional regula - tor nor standards for insolvency practice. As a
basic prerequisite, a person is qualified to be an insolvency practitioner if that person is a chartered accountant, lawyer or banker who is in good standing with their professional asso - ciation. The Registrar of Companies must also certify or license an individual as such. The law further requires practitioners to have the requi - site professional indemnity insurance to enable them to practise as an insolvency practitioner. In December 2021, the Ghana Association of Insolvency Advisors (GARIA) and the Office of the Registrar of Companies ushered in the first batch of insolvency practitioners to help in the administration of businesses, properties and affairs of distressed companies in the country. In the same vein, GARIA inducted the second batch of insolvency practitioners as part of the Office of the Registrar of Companies’ objective to respond to the local needs of distressed com - panies. Plans are underway to ensure that the ORC is self-financing to carry out its mandate, which includes the establishment of the Insol - vency Services Division. The Insolvency Services Division was created under Act 1015 to regulate insolvency prac - tice, oversee the administration, restructuring and insolvency proceedings of companies, and make recommendations to the Registrar on any changes deemed necessary to the relevant laws on insolvency in Ghana. Another important feature of Act 1015 is the introduction of cross-border insolvency proce - dures. Cross-border insolvency proceedings have been established to promote co-operation between a court and other competent authorities of Ghana and those of foreign states involved in cases involving both or multiple countries. The provisions in the Act are reflective of the United Nations Commission on International Trade Law
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