• The Official Receiver in Insolvency
    Insolvency • Bankruptcy

Liquidation by Court

What is it?

Liquidation is the process by which the management of the company’s affairs and control of its assets are taken out of its directors’ hands and vest in a liquidator. The assets are then realized by the liquidator and debts are paid out of the proceeds of sale in order of priority. Once the assets are sold and creditors paid, the Liquidator closes the company.

The law provides for three (3) modes in which liquidation of companies can be undertaken:

  1. Members’ voluntary liquidation
  2. Creditors’ voluntary liquation
  3. Liquidation by Court

Where a Liquidation Petition is presented to the Official Receiver the following actions shall be undertaken:

  1. State Counsel will go through the petition.
  2. If the petition is properly drawn, approve the petition and indicating the amount to be paid by the petitioner
  3. Direct the petitioner to make payment of statutory fees at the BRS accounts office.
  4. State Counsel generate a Certificate of Compliance
  5. Open a file.

Where a Liquidation Order is issued:

  1. Advertise the Order in the Kenya Gazette within 30 days.
  2. Require the company’s directors to file a Statement of Affairs where necessary
  3. Take up affairs of the company.
  4. Convene a creditors’ meeting where necessary.

 

Last updated 22nd November 2019

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