Published in furtherafrica.com
It was published in the Angolan Official Gazette on May 10, entering into force on the same day, Law no. 13/21, of May 10, regarding the new legal regime which regulates insolvencies and judicial/non-judicial corporate/individual recovery procedures in Angola.
This legal regime was expected for a long time, since the legal framework in force until now was the regime foreseen in the Civil Procedure Code of 1961, finally suppressing the urgent necessity of review of this sector of the Angolan Law.
Angolan Law follows, through this regulation, trends of the most advanced legislations regarding corporate/insolvency law, encouraging and permitting the recovery of economically viable companies, without the unique purpose of recover creditors’ assets.
The new legal framework introduces better mechanisms to assist companies which for some reason are facing economic difficulties, safeguarding the possibility of maintaining those companies working and enabling that they reach again a favorable position and economic stability.
Indirectly, it permits the conservation of jobs and encouragement of national and foreign investment, since investors acknowledge that if their company has economic difficulties, they may rely on legal remedies which permit and have as purpose the preservation of the company, with relevant social and economic benefits.
This regime is also better for creditors, because with the maintenance of the company, the probability of receiving their credits in full in the future increases.
If it is true that bankruptcy procedures were already foreseen (even assuming that the regime was old and outdated), before the new law Angola had not a corporate recovery procedure. So, companies were left in that difficult situation expecting that the normal market dynamic would solve the problem, with less probability of recovery and greater hypothesis of entering in bankruptcy, or were immediately submitted to bankruptcy procedures without trying to keep the company functioning, which ultimately was not the best solution for creditors, that could not obtain the totality of their credits. In this aspect, the new regime finally fills an omission of the Angolan Law.
The approval of the new Insolvency and Corporate Recovery Law permits the adjustment of Angolan Law to the modern Insolvency Law principles and purposes, being just another example of Angola’s investment-friendly policy, promoting economic development, and strengthening businesses environment, legal certainty and procedural promptness and efficiency.