The new Insolvency Act chapter 604 is viewed as the best legislation that promotes the ease of doing business and encourages the participation of creditors in cases of insolvency.
The new Insolvency Act chapter 604 expressly repealed chapter 607 and provided an enabling environment for business.
Before the new act, the law gave powers to appointed judicial managers at the expense of creditors.
The new law has consolidated all insolvency laws under one legislation and protects the interests of creditors by giving them power to select a creditors committee and the power to vote for or against a proposal by a corporate rescue practitioner, who used to be called a judicial manager.
A commercial law expert Mr Tawanda Chiurayi said the new legislation has improved efficiency and reduced costs.
The new law also gives preference to employees and are now regarded as special type of creditors.
Before allocating creditors, employees are entitled to a three month salary or US$750 and the remainder of their salary arrears will be put together with the rest of the creditors.
The government is focusing on promoting investment and such legislation is in the right direction in promoting enabling environment for business.