By Ritah Kemigisa
The Uganda Registration and Services Bureau, URSB has revealed that the covid-19 pandemic has triggered several liquidation and bankruptcy filings as most companies seem to have fallen into financial limbo due to the covid19 pandemic.
Speaking at a joint two-day conference under the theme; Insolvency and Intellectual Property Rights in the face of COVID-19, the URSB Director Insolvency and Receivership Mustapher Ntale said they have so far received about three top companies which have formally exited the market citing covid.
He adds that they have also received reports of several entities which have not formally exited business but are going through dire financial challenges.
Officiating at the conference, the justice, and constitutional affairs minister Prof Ephraim Kamuntu said the government is revising laws to ensure that costs involved in business formalization and Intellectual property registrations are reduced.
“This will help businesses to formalize and protect their innovations as they enter these competitive markets,” said Prof Kamuntu.
The register general URSB Mercy Kainobwisho has also advised businesses to take advantage of available legal mechanisms and rescue options to avoid insolvency.
Meanwhile, the Bureau has also called for a mindset change about insolvency (bankruptcy) which many brand as a negative state.
Mr Mustapher says insolvency has been used in developed countries to regain stability.
Ntale now advises entities that are struggling financially not to shy away from but rather apply for insolvency which he insists is a positive calling.
“We are fully aware that societies consider insolvency as a negative thing, we are aware that economies world over have used insolvency to regain stability, it is normal to make mistakes in the process of being an entrepreneur, what matters is how you deal with the situation,” said Mr Ntale.
Insolvency refers to situations where a debtor cannot pay the debts she owes, for instance, a troubled company may become insolvent when it is unable to repay its creditors money owed on time, often leading to a bankruptcy filing.