In a bid to cushion businesses, governments worldwide have come up with measures, most of which have been geared towards addressing liquidity shortages and enhancing access to capital. The Insolvency Act, 2015, was enacted with the view of reforming the manner in which individuals and companies in financial distress are dealt with. Central to this aim is the need to ensure a balance between preserving viable businesses and quickly liquidating companies that are not viable and redistribute capital to those that are more viable. To achieve this objective, the Act introduced administration as an alternative to the liquidation of companies. Administration offers a new lease of life to companies because of the protective measures it avails.

Source: The Star December 07, 2020 00:56 UTC