Corporate Insolvency and Restructuring Acts (CIRA) will turn fortunes of Ghanaian Businesses-Registrar General

The Registrar General, Mrs. Jemima Oware has indicated that the operationalization of the new Corporate Insolvency and Restructuring Acts(CIRA) for companies has the potential to turn in the positive light, the fortunes of Ghanaian Businesses.

She indicated that CIRA will provide fresh and wider opportunities for distressed Businesses.

“The Companies Act, 2019 (Act 992) was a major business reform Act closely followed in time of passage by the Corporate Insolvency and Restructuring Act, 2020 (Act 1015) (CIRA). These Acts when implemented have the potential to turn the fortunes of businesses in Ghana in a positive direction,” she noted.

“Where the rescue and turn around option is impossible, the CIRA provides a clearer process for bringing the business of an insolvent company to an end,” she added.

She made this known at the launch of a User Guide on the Corporate Insolvency and Restructuring Act(CIRA), 2020(Act 1015) in Accra on September 20, 2021.

The User Guide will better enlighten the Business community on the Act and demystify’ corporate insolvency and restructuring.

Also, it will better aid stakeholders to enable them to comply with the CIRA

The CIRA replaces the Bodies Corporate (Official Liquidation) Act, 1963 (Act 180). The latter solely set out a framework for the liquidation of insolvent companies however made little or no provision for the Rescue of such insolvent companies.

Therefore, the CIRA is the main legislation for corporate restructuring and insolvency in Ghana.

Mrs. Oware moreover indicated that Businesses such as insurance companies, banks, and Metropolitan, Municipal, and District Assemblies, were not covered under the CIRA. This is because they have special legislation. However except where the special legislation did not specifically provide for a rescue provision.

A distressed Company is one that is unable to pay its debts or current obligations when they are due (insolvency); or when the company has a negative net worth(total liabilities exceeding the total assets of the company).

The Registrar-General’s Department is mandated per CIRA, to establish Insolvency Services Division.

Additionally, Mrs. Oware noted that the qualification to become an Insolvency Practitioner would be monitored. This is to ensure that only qualified individuals were appointed as liquidators.

Meanwhile, the Registrar General’s Department has urged the Ghanaian Business community to acquaint themselves with CIRA’s provisions to help reduce collapse.