ADVOKS GLOBAL · KENYA
Insolvency Act
654. Restrictions on company obtaining credit during moratorium
Edition: 2022-12-31 · In force
654. Restrictions on company obtaining credit during moratorium
(1)A company in respect of which a moratorium has effect may not obtain credit exceeding twenty-five thousand shillings from a person who has not been informed that a moratorium has effect in respect of the company.(2)The reference to the company obtaining credit includes (but is not limited to) the following cases—(a)if goods are bailed to the company under a credit purchase transaction;(b)if the company is paid in advance (whether in money or otherwise) for the supply of goods or services.(3)If the company obtains credit in contravention of subsection (1), the company, and each officer of the company who is in default, commit an offence.(4)A company that is found guilty of an offence under subsection (3) is liable on conviction to a fine not exceeding two million shillings.(5)An officer of a company who is found guilty of an offence under subsection (3) is liable on conviction to a fine not exceeding one million shillings or to imprisonment for a term not exceeding two years, or to both.(6)The insolvency regulations may increase or reduce the amount specified in subsection (1).