Kuwait passes law to protect ailing companies, attract investors | ZAWYA MENA Edition:
The Kuwaiti parliament has approved a law to increase protection for troubled businesses and provide two new options before they are forced to declare bankruptcy, a parliamentary committee report showed.
Under the 40-year-old previous law, failure to make debt repayments meant automatic bankruptcy and the defaulter faced penalties, including imprisonment, deprivation of political rights and travel bans.
The new law does not treat failure to pay debt as a criminal offence, unless it is fraudulent. It also allows bankruptcy to be avoided either by a settlement with creditors or a restructuring plan.
This law is "one of the most important laws supporting improving the business environment and attracting foreign investment," the committee report said. "It contains clear legal rules and standards that preserve the rights of investors and achieves a balance between the creditor and the debtor."
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