2. Short title and commencement Interpretation 288 No. 9 of 2017] Corporate Insolvency “ account fairly stated ” means the annual accounts stated in a manner that ensures sufficient disclosure, reasonable detail and absence of bias; “ accounting records ” include— (a) invoices, receipts, orders for the payment of money, bills of exchange, cheques, promissory notes, vouchers and other documents of prime entry; and (b) such working papers and other documents as are necessary to explain the methods and calculations by which the accounts are made up; “ affected person ” includes a regulator, shareholder, member, director, creditor or an employee, a former employee of a company, registered trade union representing employees of the company and the Registrar; “ Agency ” means the Patents and Companies Registration Agency established in accordance with the Patents and Companies Registration Agency Act, 2010; “ agent of the company ” includes any banker or legal practitioner of the company and any person appointed by the company as auditor; “ annual accounts ” means the annual financial statements of a company that give a true and fair view of the financial performance, financial position and cash flows of the company, including the consolidated financial statements for a group of companies that give a true and fair view of the group of companies’ financial performance, financial position and cash flows; “ auditor ” has the meaning assigned to the word in the Accountants Act, 2008; “ bailiff ” means an officer appointed in accordance with the Sheriffs Act; “ bank ” has the meaning assigned to the word in the Banking and Financial Services Act, 2017; “ beneficial owner ” has the meaning assigned to the word in the Companies Act, 2017; “ body corporate ” has the meaning assigned to the word in the Companies Act, 2017; “ book ” has the meaning assigned to the word in the Companies Act, 2017; Act No. 15 of 2010 Act No.13 of 2008 Cap. 37 Act No. 7 of 2017 Act No. 10 of 2017 Act No. 10 of 2017 Act No. 10 of 2017 Corporate Insolvency [No. 9 of 2017 289 “ board of directors ” means the board of directors of a company and “ board ” shall be construed accordingly; “ business ” includes a trade or profession; “ business rescue administrator ” means a person qualified in accordance with section 30 and appointed as an administrator for purposes of business rescue proceedings; “ business rescue plan ” means a plan provided for in accordance with section 41; “ business rescue proceedings ” means the process of facilitating the rehabilitation of a company that is financially distressed by providing for — (a) the temporary supervision of the company and management of its affairs, business and property; (b) a temporary moratorium on the rights of claimants against the company or in respect of property in its possession; or (c) the development and implementation, if approved in accordance with this Act, of a plan to rescue the company by restructuring its affairs, business, property, debt and other liabilities and equity in a manner that maximises the likelihood of the company continuing in existence on a solvent basis or, if it is not possible for the company to so continue in existence, results in a better return for the company’s creditors or shareholders than would result if the company was to be liquidated; “ charge ” has the meaning assigned to the word in the Companies Act, 2017; “ committee of inspection ” means a committee of inspection appointed in the course of a winding up in accordance with this Act; “ company ” has the meaning assigned to the word in the Companies Act, 2017; “ contingent creditor ” means a prospective or anticipated Act No. 10 of 2017 Act No. 10 of 2017 creditor; “ control ” means the control of a company by a person who— (a) beneficially owns more than twenty-five percent of the issued share capital of the company; (b) is entitled to vote a majority of the votes that may be cast at a general meeting of the company, or has the ability to control the voting of a majority of those votes, either directly or through a controlled entity of that person; 290 No. 9 of 2017] Corporate Insolvency Act No. 10 of 2017 (c) is able to appoint or to veto the appointment of a majority of the directors of the company; (d) is a holding company and the company is a subsidiary of that company as provided for in the Companies Act, 2017; (e) in the case of a company that is a trust, has the ability to control the majority of the votes of the trustees, to appoint the majority of the trustees or to appoint or change the majority of the beneficiaries of the trust; or (f) has the ability to materially influence the policy of the company in a manner comparable to a person who, in ordinary commercial practice, can exercise an element of control referred to in paragraphs (a) to (e); “ corporate ” means an entity, including a company or body corporate, that is separate and distinct from its owners and which is recognised as such by law and acts as a single entity; “ Court ” means the High Court for Zambia; “ creditor ” means a person who is entitled to claim that debt is owing to that person by a company and includes a person entitled to enforce a final judgment or order of the Court; “ creditors ’ voluntary winding up” means a voluntary winding up of a company by the creditors where no declaration of insolvency was made; “ current liability ” means a liability that would, in the ordinary course of events, be payable within twelve months after the end of the financial year to which the accounts of a company or group of companies relate; “ debenture ” means a document issued by a corporate that evidences or acknowledges a debt of the corporate, whether or not it constitutes a charge on property of the corporate, in respect of money that is or may be deposited with or lent to the corporate, other than a document of the following kinds: (a) a document acknowledging a debt incurred by the corporate in respect of money that is or may be deposited with or lent to the corporate by a person— Corporate Insolvency [No. 9 of 2017 291 (i) in the ordinary course of a business carried on by the person; and (ii) in the ordinary course of such business of the corporate as is not part of a business of borrowing money and providing finance; (b) a document issued by a bank in the ordinary course of its banking business that evidences or acknowledges indebtedness of the bank arising in the ordinary course of that business; (c) a cheque or order for the payment of money or bill of exchange; and includes— (i) a unit of a debenture; (ii) debenture stock; (iii) a bond; and (iv) any other security issued by a company, whether constituting a charge on the assets of the company or not; “ debenture holder ” includes a debenture stockholder; “ declaration ” means a declaration of insolvency made by the Official Receiver; “ declaration of solvency ” means a declaration made in accordance with section 91; “ deed of appointment ” means the instrument by which the holder of a charge appoints a receiver; “ dissolution ” means the termination of a company’s legal existence by liquidation in accordance with this Act; “ director ” means a person appointed as a director of a company in accordance with the Companies Act, 2017 and the words “the directors” means the directors acting collectively; “ establishment ” means any place of operations where a debtor carries out non-transitory economic activity; “ financial institution ” has the meaning assigned to the word in the Banking and Financial Services Act, 2017; “ financially distressed ” means a company is likely to be insolvent within the immediately ensuing six months; “ financial year ” has the meaning assigned to the word in the Companies Act; Act No. 10 of 2017 Act No. 7 of 2017 Act No. 10 of 2017 292 No. 9 of 2017] Corporate Insolvency “ foreign Court ” means a judicial or other authority competent to determine foreign proceedings; “ foreign main proceeding ” means proceedings taking place in the State where the debtor’s main interests are situated; “ foreign non-main proceeding ” means foreign proceedings, other than a foreign main proceeding, taking place in a State where the debtor has an establishment; “ foreign proceeding ” means a judicial or administrative proceeding in a foreign State, including an interim proceeding, pursuant to a law relating to insolvency in which the assets and affairs of the debtor are subject to determination by a foreign Court, for the purpose of re- organisation or liquidation; “ foreign representative ” means a person or body, including one appointed on an interim basis, authorised in a foreign proceeding to administer the re-organisation or the liquidation of the debtor’s assets or affairs or to act as a representative for the foreign proceedings; “ general meeting ” means an annual general meeting or an extraordinary general meeting; “ goods ” includes personal property; “ liquidator ” means a person appointed to wind up the affairs of a company; “ judgment receiver” means a receiver who collects or diverts funds from a judgment debtor to the creditor; “ independent creditor ” means a person who is— (a) a creditor of the company, including an employee of the company; and (b) not related to the company, a director, or the business rescue administrator; “ insolvency practitioner ” means the Official Receiver or a person who is qualified to be appointed— (a) a receiver, receiver manager or judgment receiver; (b) a liquidator; or (c) business rescue administrator; of a company, as specified in sections 139 and 142; “ insolvency proceeding ” means a judicial or administrative proceeding relating to bankruptcy, liquidation, receivership, judicial or statutory management or voluntary administration; Corporate Insolvency [No. 9 of 2017 293 “ insolvent ” means having liabilities that exceed the value of assets, having stopped paying debts in the ordinary course of business or being unable to pay them as they fall due; “ liquidation ” means the process of converting the property of a company into cash in order to settle the company’s’ debt and other liabilities; “ member ” means a shareholder or stockholder of a company or a subscriber to a company limited by guarantee; “ members voluntary winding-up ” means the termination of a corporation, initiated by the board of directors and approved by the shareholders; “ officer ” includes a— (a) director, secretary or executive officer of a body corporate; and (b) local director of a foreign company; “ Official Receiver ” means the person appointed as official receiver under the Bankcruptcy Act; “ Oath ” has the meaning assigned to the word in the Constitution; “ ordinary resolution ” has the meaning as assigned to the word in the Companies Act, 2017; “ property ” means the assets of the company, including money, goods, choses in action and land, whether real or personal, legal or equitable and situated in Zambia or elsewhere, and obligations, easements and every description of estate, interest and profit, present or future, vested or contingent and arising out of, or incidental to the property; “ proposal ” means a proposal for a voluntary arrangement or for extension of time; “ provable claim ” includes any claim or liability provable in proceedings commenced or lodged in accordance with this Act by a creditor; “ provisional liquidator ” means the Official Receiver or any person appointed provisionally by the Court after the presentation of a winding up petition but before the making of a winding up order; “ receiver ” means a disinterested individual appointed as a receiver, receiver manager or judgment receiver, in accordance with this Act, for a corporate or other person, for the protection or collection of property that is the subject of diverse claims, is litigated or has been litigated or income arising from the property of the corporate or other person, and includes the Official Receiver; Cap. 82 Cap. 1 Act No. 10 of 2017 294 No. 9 of 2017] Corporate Insolvency Act No. 15 of 2010 “ recognised professional body ” means a professional body recognised by the Minister as a professional body, in accordance with this Act; “ record ’’ includes a computer record and any other non- documentary record; “ Register of Liquidators ” means a Register of liquidators kept by the Registrar in accordance with this Act; “ Register of Insolvency Practitioners ” means the Register kept by the Registrar in accordance with section 143; “ Register of receivers ” means a Register of receivers kept by the Registrar in accordance with this Act; “ Registrar ” means the Registrar appointed under the Patents and Companies Registration Agency Act, 2010; “ relative ” in relation to an individual means— (a) a parent, spouse, son, daughter, brother, sister, nephew, niece, uncle, aunt, grandparent or cousin of the individual; (b) a parent, child, brother or sister of the spouse of the individual; or (c) a nominee or trustee of any of the persons specified in paragraph (a) or (b); “ secured creditor ” means a person holding a mortgage, pledge, charge or lien on, or against, the property of the debtor or any part thereof as security for a debt due or accruing to that person from a debtor, or a person whose claim is based on, or secured by, a negotiable instrument held as collateral security and on which the debtor is only indirectly or secondarily liable; “ securities ” means— (a) shares; (b) debt securities; (c) public debt securities; (d) derivatives; (e) any rights, options or derivatives in respect of any such shares, debt securities or public debt securities; (f) any rights under a contract to secure a profit or avoid a loss by reference to fluctuations in— Corporate Insolvency [No. 9 of 2017 295 (i) the value or price of any shares, debt securities or public debt securities; (ii) the value or price of a group of shares, debt securities or public debt securities; or (iii) an index of shares, debt securities or public debt securities; (g) unit trusts and interests under collective investment schemes; (h) commercial paper; (i) depository receipts; (j) warehouse receipts; or (k) any other instrument commonly known as securities or which are prescribed by a relevant authority; excluding bills of exchange, promissory notes, certificates of deposit issued by a bank; “security agreement” means an agreement under which property becomes subject to a security for the performance of an obligation; “ service provider ” means an entity or person who supplies water and sanitation services, electricity, telecommunications or such other services as may be prescribed; “ shares ” means an ownership interest or stocks issued or proposed to be issued by a company in the capital of the company; “ shareholder ” has the meaning assigned to the word in the Companies Act, 2017, and includes a person who is the beneficial owner of, holds shares in, or is in a position to exert control over more than fifteen percent of the shares of a company or body corporate; “ solvency test ” means a test to determine that— (a) a company is able to pay its debts as they become due in the normal course of business; and (b) the value of the company’s assets is greater than the value of its liabilities, including contingent liabilities; “ special manager ” means a person appointed in accordance with section 81 to manage an estate or business of a company, or the interests of the creditors or members generally, where the liquidator is satisfied of the necessity of such an appointment due to the nature of the estate or business; 296 No. 9 of 2017] Corporate Insolvency Act No. 10 of 2017 Act No. 10 of 2017 Act No. 41 of 2016 Act No. 7 of 2017 Reference to receiver under enabling instrument Appointment of receiver “ special resolution ” has the meaning assigned to the word in the Companies Act, 2017; “ successor in title ” means the successor of a person and includes an heir, executor, liquidator, administrator or other legal representative of a person, as the case may be; “ supervision ” means the oversight imposed on a company during that company’s business rescue proceedings; “ transaction ’’ includes a gift, agreement or arrangement, and “entering into a transaction” shall be construed accordingly; “ trustee ” means a trustee in bankruptcy of a member, as provided in section 54; “ voluntary arrangement ” means an arrangement entered into by a company and that company’s creditors by way of— (a) a composition for the satisfaction of the company’s debts; (b) a scheme; or (c) arrangement of the company’s affairs. “ voting interest ” means an interest that is appraised and valued in accordance with section 39; and “ winding up ” means the process of settling accounts and liquidating assets in anticipation of a company’s dissolution. (2) A word or term used in this Act which is not defined but is defined in the Companies Act, Securities Act, 2016, or the Banking and Financial Services Act, 2017, shall have the meaning assigned to it in those Acts. PART II RECEIVERSHIP