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60 Int'l J.L. & Mgmt. 2 (2018)

handle is hein.journals/ijlm60 and id is 1 raw text is: The current issue and full text archive of this journal is available on Emerald Insight at:
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The objectives of corporate
insolvency law: lessons
for Uganda
Chrispas Nyombi

Received 20 October 2013
Revised 9 November 2013
Accepted 30 December 2013

International Journal of Law and
Management
Vol. 60 No.1, 2018
pp. 2-18
© Emerald PublishingLimited
1754-243X
DOI 10.1108/JJLMA-10-2013{IX04

Abstract
Purpose - This paper aims to provide guidance to law reformers in Uganda on the best approach to
insolvency law reform and the objectives that should be furthered.
Design/methodology/approach - This paper provides a literature review.
Findings - A balance of various objectives serves the purpose of a modern insolvency law system.
Originality/value - These findings would enable future reforms in Uganda to be streamlined towards a
particular objective rather than a general approach to insolvency regulation.
Keywords Uganda, Companies Act 2012, Insolvency Act 2011
Paper type Conceptual paper
1. Introduction
The first ever Insolvency Act in Uganda was passed by Parliament in 2011. Prior to that,
corporate insolvency laws were found in the Companies Act 1961, the Bankruptcy Act 1931
and the Deed of Arrangements Act 1931. These were laws enacted by the Protectorate
Government when Uganda was still under British colonial rule. At the turn of the
twenty-first century, Uganda was still dependant on colonial laws that simply did not serve
the needs of the commercial sector. In 2000, the Uganda Law Reform Commission (ULRC)
took on the difficult task of reforming insolvency law in Uganda[1]. This culminated in the
Insolvency Bill 2009, titled:
An Act to provide for receivership, administration, liquidation, arrangements, bankruptcy, the
regulation of insolvency practitioners and cross border insolvency; to amend and consolidate the
law related to receiverships, administration, liquidation, arrangement and bankruptcy; and to
provide for other related matters.
The Bill provided an overhaul of insolvency law in Uganda by amalgamating the various
insolvency laws and introducing new insolvency procedures such as administration,
strengthening the rights and duties of insolvency practitioners and introducing provisions
in areas such as cross-border insolvency.
Insolvency law aims to serve the interests of all company constituents because corporate
failure impacts a range of company constituents such as creditors, employees Nyombi
(2013), shareholders and the economy. However, the challenge is how to balance a range of
interests at a time when the company does not have enough resources to meet the demands
of every constituent. It is vitally important that insolvency law serves the correct insolvency
objectives. For scholars and practitioners, without clarity over the aims and objections that
ought to be furthered, it is only possible to describe legal states of affairs and make
prescriptions based on insolvency ideas. Thus, the aims and objectives of insolvency law
have to first be established to evaluate the insolvency law reforms in Uganda. It is also not
feasible to set out a single rationale for corporate insolvency law; thus, a number of

IJLMA
60,1

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