Section 384 of Insolvency Act CAP 53: The circumstances in which a company is unable to pay its debts
(1) For the purposes of this Part, a company is unable to pay its debts—
(a) if a creditor (by assignment or otherwise) to whom the company is indebted for hundred thousand shillings or more has served on the company, by leaving it at the company's registered office, a written demand requiring the company to pay the debt and the company has for twenty—one days afterwards failed to pay the debt or to secure or compound for it to the reasonable satisfaction of the creditor;
(b) if execution or other process issued on a judgment, decree or order of any court in favour of a creditor of the company is returned unsatisfied in whole or in part; or
(c) if it is proved to the satisfaction of the Court that the company is unable to pay its debts as they fall due.
(2) A company is also unable to pay its debts for the purposes of this Part if it is proved to the satisfaction of the Court that the value of the company's assets is less than the amount of its liabilities (including its contingent and prospective liabilities).
(3) The insolvency regulations may increase or reduce the amount specified in subsection (1)(a).
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- Section 391 - Liability of contributories who are adjudged bankrupt
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- Section 393 - Circumstances in which company may be liquidated voluntarily
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- Section 394 - Notice of resolution to liquidate
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- Section 395 - When liquidation commences
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- Section 396 - Consequences of resolution to liquidate
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- Section 397 - Share transfers and attempts to alter member's status after liquidation resolution to be void
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- Section 402 - Final meeting prior to dissolution: members' voluntary liquidation
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- Section 405 - Application of Division 4
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- Section 409 - Creditors may appoint liquidation committee
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- Section 410 - Creditors' meeting if liquidation converted under section 404
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- Section 411 - Cessation of directors' powers
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- Section 412 - Vacancy in office of liquidator: creditors' voluntary liquidation
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- Section 432 - Consequences of liquidation order
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- Section 434 - Duty of Official Receiver to conduct investigation into failure of company
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(a) if the company has failed,to discover why the company failed; and
(b) generally, to investigate...