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Small Business, Enterprise and Employment Act 2015

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This is the original version (as it was originally enacted).

107Reports of office-holders on conduct of directors of insolvent companies

This section has no associated Explanatory Notes

(1)The Company Directors Disqualification Act 1986 is amended in accordance with subsections (2) to (4).

(2)After section 7 insert—

7AOffice-holder’s report on conduct of directors

(1)The office-holder in respect of a company which is insolvent must prepare a report (a “conduct report”) about the conduct of each person who was a director of the company—

(a)on the insolvency date, or

(b)at any time during the period of 3 years ending with that date.

(2)For the purposes of this section a company is insolvent if—

(a)the company is in liquidation and at the time it went into liquidation its assets were insufficient for the payment of its debts and other liabilities and the expenses of the winding up,

(b)the company has entered administration, or

(c)an administrative receiver of the company has been appointed;

and subsection (1A) of section 6 applies for the purposes of this section as it applies for the purpose of that section.

(3)A conduct report must, in relation to each person, describe any conduct of the person which may assist the Secretary of State in deciding whether to exercise the power under section 7(1) or (2A) in relation to the person.

(4)The office-holder must send the conduct report to the Secretary of State before the end of—

(a)the period of 3 months beginning with the insolvency date, or

(b)such other longer period as the Secretary of State considers appropriate in the particular circumstances.

(5)If new information comes to the attention of an office-holder, the office-holder must send that information to the Secretary of State as soon as reasonably practicable.

(6)“New information” is information which an office-holder considers should have been included in a conduct report prepared in relation to the company, or would have been so included had it been available before the report was sent.

(7)If there is more than one office-holder in respect of a company at any particular time (because the company is insolvent by virtue of falling within more than one paragraph of subsection (2) at that time), subsection (1) applies only to the first of the office-holders to be appointed.

(8)In the case of a company which is at different times insolvent by virtue of falling within one or more different paragraphs of subsection (2)

(a)the references in subsection (1) to the insolvency date are to be read as references to the first such date during the period in which the company is insolvent, and

(b)subsection (1) does not apply to an office-holder if at any time during the period in which the company is insolvent a conduct report has already been prepared and sent to the Secretary of State.

(9)The “office-holder” in respect of a company which is insolvent is—

(a)in the case of a company being wound up by the court in England and Wales, the official receiver;

(b)in the case of a company being wound up otherwise, the liquidator;

(c)in the case of a company in administration, the administrator;

(d)in the case of a company of which there is an administrative receiver, the receiver.

(10)The “insolvency date”—

(a)in the case of a company being wound up by the court, means the date on which the court makes the winding-up order (see section 125 of the Insolvency Act 1986);

(b)in the case of a company being wound up by way of a members’ voluntary winding up, means the date on which the liquidator forms the opinion that the company will be unable to pay its debts in full (together with interest at the official rate) within the period stated in the directors’ declaration of solvency under section 89 of the Insolvency Act 1986;

(c)in the case of a company being wound up by way of a creditors’ voluntary winding up where no such declaration under section 89 of that Act has been made, means the date of the passing of the resolution for voluntary winding up;

(d)in the case of a company which has entered administration, means the date the company did so;

(e)in the case of a company in respect of which an administrative receiver has been appointed, means the date of that appointment.

(11)For the purposes of subsection (10)(e), any appointment of an administrative receiver to replace an administrative receiver who has died or vacated office pursuant to section 45 of the Insolvency Act 1986 is to be ignored.

(12)In this section—

  • “court” has the same meaning as in section 6;

  • “director” includes a shadow director.

(3)In section 7 (disqualification order or undertaking and reporting provisions), omit subsection (3).

(4)For the heading of section 7 substitute “Disqualification orders under section 6: applications and acceptance of undertakings”.

(5)In consequence of the repeal made by subsection (3), in Schedule 17 to the Enterprise Act 2002, omit paragraph 42.

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