Insolvency and the Practice of Insolvency in Rwanda

Article 3(5) of the law relating to insolvency in Rwanda describes insolvency as a situation in which an individual, a company or a partnership engaged in a business activity can no longer pay their debts as they fall due. Inability to pay their debts as they fall due gives rise to an insolvency procedure which as per article 7, it is a procedure that is initiated to administer the assets of the company, partnership or individual for the interest of all its creditors. The procedure may be voluntary or force and it might involve an entity that is insolvent or that which is solvent. Insolvency and bankruptcy Both mean the same thing, but involves different parties. Insolvency is use to describe a corporate or business entity that has become insolvent while bankruptcy is use to refer to an individual who is insolvent. The cynosure of this short paper will be on corporate insolvency, the processes involved and the actors involved in the process from its inception to its conclusion taking insight from Rwanda legislation.