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The First Group of PartsE+W+S Company Insolvency; Companies Winding Up

Modifications etc. (not altering text)

C2First Group of Parts amendment to earlier affecting provision S.I. 2006/3107, art. 3, Sch. (1.4.2013) by The Financial Services Act 2012 (Consequential Amendments and Transitional Provisions) Order 2013 (S.I. 2013/472), Sch. 2 para. 117

Part IE+W+S Company Voluntary Arrangements

Modifications etc. (not altering text)

C3Pt. I (ss. 1-7), Pt. II (ss. 8-27) modified by Company Directors Disqualification Act 1986 (c. 46, SIF 27), ss. 21(2), 25

C4Pts. I-VII (ss. 1-251) applied (with modifications) by S.I. 1989/1276, arts. 2, 3

Pt. I (ss. 1-7) applied with modifications by S.I. 1986/2142, arts. 1(2), 11, 13(3), 15

Pt. I (ss. 1-7) applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 4(1), Sch. 1 (as amended (1.1.2003) by S.I. 2002/2708, arts. 4-6 (with transitional provisions in art. 11) and (1.7.2005) by S.I. 2005/1516, art. 6)

Pt. I (ss. 1-7) applied (1.12.1994) by S.I. 1994/2421, art. 5(1)

Pt. I (ss. 1-7) applied (with modifications) (1.12.1997) by 1986 c. 53, Sch. 15A (as inserted by 1997 c. 32, s. 39(2), Sch. 6 para. 1(2)(a); S.I. 1997/2668, art. 2, Sch. Pt. I(i))

C5Pts. 1-4, 6, 7 applied to limited liability partnerships (with modifications) (E.W.S.) (6.4.2001) by S.I. 2001/1090, reg. 5, Schs. 3, 4 (as amended (4.3.2004) by S.I. 2004/355, art. 10 and (1.10.2005) by S.I. 2005/1989, reg. 3, Sch. 2 (with reg. 4))

C6Pt. I: power to apply or incorporate conferred (6.4.2001) by 2000 c. 12, s. 14; S.I. 2000/3316, art. 2

Pt. I: power to apply (with modifications) conferred (15.9.2003) by 2002 c. 40, ss. 255(2)(a), 279 (with s. 249(6)); S.I. 2003/2093, art. 2(1), Sch. 1 (subject to arts. 3-8 (as amended by S.I. 2003/2332, art. 2))

Pt. 1: power to apply (with modifications) conferred (20.11.2003 for specified purposes and 1.4.2004 otherwise) by Health and Social Care (Community Health and Standards) Act 2003 (c. 43), ss. 24(2), 26, 199; S.I. 2004/759, art. 2

Pt. 1: power to apply (with modifications) conferred (E.W.) (1.3.2007) by National Health Service Act 2006 (c. 41), ss. 53(2), 55, 277

C7First Group of Parts (Pts. 1-7) applied (with modifications) (15.12.2006) by The Banks (Former Authorised Institutions) (Insolvency) Order 2006 (S.I. 2006/3107), art. 3, Sch.

C8Pt. 1 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), s. 113(6)-(9) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch.

C9Pt. 1 applied (with modifications) (21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 134, 263(1) (with s. 247); S.I. 2009/296, art. 3, Sch. para. 2

C10Pt. 1 amendment to earlier affecting provision S.I. 1994/2421, Sch. 1 Pt. 1 (1.4.2013) by The Financial Services Act 2012 (Consequential Amendments and Transitional Provisions) Order 2013 (S.I. 2013/472), Sch. 2 para. 11(a)

C12Pt. 1 power to apply (with or without modifications) (1.8.2014) by Co-operative and Community Benefit Societies Act 2014 (c. 14), s. 118(1)(2), 154 (with Sch. 5)

C13Pt. 1 amendment to earlier affecting provision S.I. 1994/2421, Sch. 1 (1.1.2015) by The Banks and Building Societies (Depositor Preference and Priorities) Order 2014 (S.I. 2014/3486), arts. 1(2), 12 (with art. 3)

The ProposalE+W+S

1 Those who may propose an arrangement.E+W+S

(1)The directors of a company [F1(other than one which is in administration or being wound up)] may make a proposal under this Part to the company and to its creditors for a composition in satisfaction of its debts or a scheme of arrangement of its affairs (from here on referred to, in either case, as a “voluntary arrangement”).

(2)A proposal under this Part is one which provides for some person (“the nominee”) to act in relation to the voluntary arrangement either as trustee or otherwise for the purpose of supervising its implementation; and the nominee must be a person who is qualified to act as an insolvency practitioner [F2F3... in relation to the voluntary arrangement].

(3)Such a proposal may also be made—

[F4(a)where the company is in administration, by the administrator,]

(b)where the company is being wound up, by the liquidator.

[F5(4)In this Part “company” means—

[F6(a)a company registered under the Companies Act 2006 in England and Wales or Scotland;]

(b)a company incorporated in an EEA State other than the United Kingdom; or

(c)a company not incorporated in an EEA State but having its centre of main interests in a member State other than Denmark.

(5)In subsection (4), in relation to a company, “centre of main interests” has the same meaning as in the EC Regulation and, in the absence of proof to the contrary, is presumed to be the place of its registered office (within the meaning of that Regulation).

(6)If a company incorporated outside the United Kingdom has a principal place of business in Northern Ireland, no proposal under this Part shall be made in relation to it unless it also has a principal place of business in England and Wales or Scotland (or both in England and Wales or Scotland).]

Textual Amendments

F1Words in s. 1(1) substituted (15.9.2003) by 2002 c. 40, ss. 248(3), 279, Sch. 17 para. 10(a) (with s. 249(1)-(3)(6)); S.I. 2003/2093, art. 2(1), Sch. 1 (subject to arts. 3-8 (as amended by S.I. 2003/2332, art. 2))

F2Words in s. 1(2) substituted (1.1.2003) by 2000 c. 39, s. 2, Sch. 2 Pt. I para. 2; S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F4S. 1(3)(a) substituted (15.9.2003) by 2002 c. 40, ss. 248(3), 279, Sch. 17 para. 10(b) (with s. 249(1)-(3)(6)); S.I. 2003/2093, art. 2(1), Sch. 1 (subject to arts. 3-8 (as amended by S.I. 2003/2332, art. 2))

F5S. 1(4)-(6) substituted (13.4.2005) for s. 1(4) by The Insolvency Act 1986 (Amendment) Regulations 2005 (S.I. 2005/879), reg. 2(2) (with reg. 3)

F6S. 1(4)(a) substituted (1.10.2009) by The Companies Act 2006 (Consequential Amendments, Transitional Provisions and Savings) Order 2009, (S.I. 2009/1941) arts. 2(1), 8, {Sch. 1 para. 71(2)} (with art. 10, Sch. 1 para. 84)

[F71A Moratorium.E+W+S

(1)Where the directors of an eligible company intend to make a proposal for a voluntary arrangement, they may take steps to obtain a moratorium for the company.

(2)The provisions of Schedule A1 to this Act have effect with respect to—

(a)companies eligible for a moratorium under this section,

(b)the procedure for obtaining such a moratorium,

(c)the effects of such a moratorium, and

(d)the procedure applicable (in place of sections 2 to 6 and 7) in relation to the approval and implementation of a voluntary arrangement where such a moratorium is or has been in force.]

Textual Amendments

F7S. 1A inserted (1.1.2003) by 2000 c. 39, s. 1, Sch. 1 para. 2; S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

2 Procedure where nominee is not the liquidator or administrator.E+W+S

(1)This section applies where the nominee under section 1 is not the liquidator or administrator of the company [F8and the directors do not propose to take steps to obtain a moratorium under section 1A for the company].

(2)The nominee shall, within 28 days (or such longer period as the court may allow) after he is given notice of the proposal for a voluntary arrangement, submit a report to the court stating—

(a)[F9whether, in his opinion, the proposed voluntary arrangement has a reasonable prospect of being approved and implemented,

[F10(aa)] whether, in his opinion, meetings of the company and of its creditors should be summoned to consider the proposal, and

(b)if in his opinion such meetings should be summoned, the date on which, and time and place at which, he proposes the meetings should be held.]

[F10(b)whether, in his opinion, the proposal should be considered by a meeting of the company and by the company's creditors, and

(c)if in his opinion it should, the date on which, and time and place at which, he proposes a meeting of the company should be held.]

(3)For the purposes of enabling the nominee to prepare his report, the person intending to make the proposal shall submit to the nominee—

(a)a document setting out the terms of the proposed voluntary arrangement, and

(b)a statement of the company’s affairs containing—

(i)such particulars of its creditors and of its debts and other liabilities and of its assets as may be prescribed, and

(ii)such other information as may be prescribed.

[F11(4)The court may—

(a)on an application made by the person intending to make the proposal, in a case where the nominee has failed to submit the report required by this section or has died, or

(b)on an application made by that person or the nominee, in a case where it is impracticable or inappropriate for the nominee to continue to act as such,

direct that the nominee be replaced as such by another person qualified to act as an insolvency practitionerF12... in relation to the voluntary arrangement.]

Textual Amendments

F8Words in s. 2(1) added (1.1.2003) by 2000 c. 39, s. 1, Sch. 1 para. 3; S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F9Words in s. 2(2)(a) and “(aa)" inserted (1.1.2003) by 2000 c. 39, s. 2, Sch. 2 Pt. I para. 3(a); S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F10S. 2(2)(b)(c) substituted for s. 2(2)(aa)(b) (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 2; S.I. 2015/1329, reg. 3(d)

F11S. 2(4) substituted (1.1.2003) by 2000 c. 39, s. 2, Sch. 2 Pt. I para. 3(b); S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

3 [F13Summoning of meetings[F13Consideration of proposal]].E+W+S

(1)Where the nominee under section 1 is not the liquidator or administrator, and it has been report to the court [F14that such meetings as are mentioned in section 2(2) should be summoned] [F14under section 2(2) that the proposal should be considered by a meeting of the company and by the company's creditors] , the person making the report shall (unless the court otherwise [F15directs) summon those meetings for the time, date and place proposed in the report.] [F15directs)—

(a)summon a meeting of the company to consider the proposal for the time, date and place proposed in the report, and

(b)seek a decision from the company's creditors as to whether they approve the proposal.]

(2)Where the nominee is the liquidator or administrator, he [F16shall summon meetings of the company and of its creditors to consider the proposal for such a time, date and place as he thinks fit.] [F16shall—

(a)summon a meeting of the company to consider the proposal for such time, date and place as he thinks fit, and

(b)seek a decision from the company's creditors as to whether they approve the proposal.]

[F17(3)The persons to be summoned to a creditors’ meeting under this section are every creditor of the company of whose claim and address the person summoning the meeting is aware.]

[F17(3)A decision of the company's creditors as to whether they approve the proposal is to be made by a qualifying decision procedure.

(4)Notice of the qualifying decision procedure must be given to every creditor of the company of whose claim and address the person seeking the decision is aware.]

Consideration and implementation of proposalE+W+S

4 Decisions of [F18meetings] [F18the company and its creditors] .E+W+S

[F19(1)The meetings summoned under section 3 shall decide whether to approve the proposed voluntary arrangement (with or without modifications).]

[F19(1)This section applies where, under section 3—

(a)a meeting of the company is summoned to consider the proposed voluntary arrangement, and

(b)the company's creditors are asked to decide whether to approve the proposed voluntary arrangement.

(1A)The company and its creditors may approve the proposed voluntary arrangement with or without modifications.]

(2)The modifications may include one conferring the functions proposed to be conferred on the nominee on another person qualified to act as an insolvency practitioner [F20F21... in relation to the voluntary arrangement].

But they shall not include any modification by virtue of which the proposal ceases to be a proposal such as is mentioned in section 1.

(3)[F22A meeting so summoned shall not] [F22Neither the company nor its creditors may] approve any proposal or modification which affects the right of a secured creditor of the company to enforce his security, except with the concurrence of the creditor concerned.

(4)Subject as follows, [F23a meeting so summoned shall not] [F23neither the company nor its creditors may] approve any proposal or modification under which—

(a)any preferential debt of the company is to be paid otherwise than in priority to such of its debts as are not preferential debts, F24...

[F25(aa)any ordinary preferential debt of the company is to be paid otherwise than in priority to any secondary preferential debts that it may have,]

(b)a preferential creditor of the company is to be paid an amount in respect of [F26an ordinary preferential debt] that bears to that debt a smaller proportion than is borne to [F27another ordinary] preferential debt by the amount that is to be paid in respect of that other debt [F28, or

(c)a preferential creditor of the company is to be paid an amount in respect of a secondary preferential debt that bears to that debt a smaller proportion than is borne to another secondary preferential debt by the amount that is to be paid in respect of that other debt.]

However, [F29the meeting may approve] such a proposal or modification [F30may be approved] with the concurrence of the preferential creditor concerned.

(5)Subject as above, [F31each of the meetings] [F31the meeting of the company and the qualifying decision procedure] shall be conducted in accordance with the rules.

(6)After the conclusion of [F32either] [F32the company] meeting in accordance with the rules, the chairman of the meeting shall report the result of the meeting to the court, and, immediately after reporting to the court, shall give notice of the result of the meeting to such persons as may be prescribed.

[F33(6A)After the company's creditors have decided whether to approve the proposed voluntary arrangement the person who sought the decision must—

(a)report the creditors' decision to the court, and

(b)immediately after reporting to the court, give notice of the creditors' decision to such persons as may be prescribed.]

(7)References in this section to preferential debts [F34, ordinary preferential debts, secondary preferential debts] and preferential creditors are to be read in accordance with section 386 in Part XII of this Act.

Textual Amendments

F18Words in s. 4 heading substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 4(8); S.I. 2015/1329, reg. 3(d)

F19S. 4(1)(1A) substituted for s. 4(1) (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 4(2); S.I. 2015/1329, reg. 3(d)

F20Words in s. 4(2) substituted (1.1.2003) by 2000 c. 39, s. 2, Sch. 2 Pt. I para. 4; S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F22Words in s. 4(3) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 4(3); S.I. 2015/1329, reg. 3(d)

F29Words in s. 4(4) omitted (26.5.2015 for specified purposes) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 4(4)(b); S.I. 2015/1329, reg. 3(d)

F31Words in s. 4(5) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 4(5); S.I. 2015/1329, reg. 3(d)

F32Words in s. 4(6) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 4(6); S.I. 2015/1329, reg. 3(d)

Modifications etc. (not altering text)

[F354A Approval of arrangement.E+W+S

(1)This section applies to a decision, under section 4, with respect to the approval of a proposed voluntary arrangement.

(2)The decision has effect if, in accordance with the rules—

(a)it has been taken by [F36both meetings summoned under section 3] [F36the meeting of the company summoned under section 3 and by the company's creditors pursuant to that section] , or

(b)(subject to any order made under subsection (4)) it has been taken by the [F37creditors’ meeting summoned under] [F37company's creditors pursuant to] that section.

(3)If the decision taken by the [F38creditors’ meeting] [F38company's creditors] differs from that taken by the company meeting, a member of the company may apply to the court.

(4)An application under subsection (3) shall not be made after the end of the period of 28 days beginning with—

(a)the day on which the decision was taken by the [F39creditors’ meeting] [F39company's creditors] , or

(b)where the decision of the company meeting was taken on a later day, that day.

(5)Where a member of a regulated company, within the meaning given by paragraph 44 of Schedule A1, applies to the court under subsection (3), the [F40appropriate regulator] is entitled to be heard on the application.

[F41(5A)The appropriate regulator” means—

(a)where the regulated company is a PRA-regulated company within the meaning of paragraph 44 of Schedule A1, the Financial Conduct Authority and the Prudential Regulation Authority, and

(b)in any other case, the Financial Conduct Authority.]

(6)On an application under subsection (3), the court may—

(a)order the decision of the company meeting to have effect instead of the decision of the [F42creditors’ meeting] [F42company's creditors] , or

(b)make such other order as it thinks fit.]

Textual Amendments

F35S. 4A inserted (1.1.2003) by 2000 c. 39, ss. 2, 16(1), Sch. 2 Pt. I para. 5; S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

Modifications etc. (not altering text)

C15S. 4A(2) modified (1.1.2003) by 1986 c. 53, Sch. 15A para. 8A (as inserted (1.1.2003) by 2000 c. 39, s. 2, Sch. 2 Pt. II para. 14(3)); S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

5 Effect of approval.E+W+S

[F43(1)This section applies where a decision approving a voluntary arrangement has effect under section 4A.]

(2)The F44. . . voluntary arrangement—

(a)takes effect as if made by the company at the [F45creditors’ meeting] [F45time the creditors decided to approve the voluntary arrangement] , and

[F46(b)binds every person who in accordance with the rules—

(i)was entitled to vote [F47at that meeting (whether or not he was present or represented at it)] [F47in the qualifying decision procedure by which the creditors' decision to approve the voluntary arrangement was made] , or

(ii)would have been so entitled if he had had notice of it,

as if he were a party to the voluntary arrangement.

(2A)If—

(a)when the arrangement ceases to have effect any amount payable under the arrangement to a person bound by virtue of subsection (2)(b)(ii) has not been paid, and

(b)the arrangement did not come to an end prematurely,

the company shall at that time become liable to pay to that person the amount payable under the arrangement.]

(3)Subject as follows, if the company is being wound up or [F48is in administration], the court may do one or both of the following, namely—

(a)by order stay or sist all proceedings in the winding up or [F48provide for the appointment of the administrator to cease to have effect];

(b)give such directions with respect to the conduct of the winding up or the administration as it thinks appropriate for facilitating the implementation of the F44. . . voluntary arrangement.

(4)The court shall not make an order under subsection (3)(a)—

(a)at any time before the end of the period of 28 days beginning with the first day on which each of the reports required by section 4(6) [F49and (6A)] has been made to the court, or

(b)at any time when an application under the next section or an appeal in respect of such an application is pending, or at any time in the period within which such an appeal may be brought.

[F50(5)Where the company is in energy administration, the court shall not make an order or give a direction under subsection (3) unless—

(a)the court has given the Secretary of State or the Gas and Electricity Markets Authority a reasonable opportunity of making representations to it about the proposed order or direction; and

(b)the order or direction is consistent with the objective of the energy administration.

(6)In subsection (5) “in energy administration” and “objective of the energy administration” are to be construed in accordance with Schedule B1 to this Act, as applied by Part 1 of Schedule 20 to the Energy Act 2004.]

Textual Amendments

F43S. 5(1) substituted (1.1.2003) by 2000 c. 39, s. 2, Sch. 2 Pt. I para. 6(a); S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F44Words in s. 5(2)(3) repealed (1.1.2003) by 2000 c. 39, ss. 2, 15, Sch. 2 Pt. I para. 6(b), Sch. 5; S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F46S. 5(2)(b)(2A) substituted (1.1.2003) for s. 5(2)(b) by 2000 c. 39, s. 2, Sch. 2 Pt. I para. 6(c); S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F48Words in s. 5(3) substituted (15.9.2003) by 2002 c. 40, ss. 248(3), 279, Sch. 17 para. 11(a)(b) (with s. 249(1)-(3)(6)); S.I. 2003/2093, art. 2(1), Sch. 1 (subject to arts. 3-8 (as amended by S.I. 2003/2332, art. 2))

Modifications etc. (not altering text)

C16S. 5 restricted (S.) (1.11.2001) by 2001 asp 10, s. 63, Sch. 7 para. 10(5); S.S.I. 2001/336, art. 2(3), Sch. Pt. II (subject to transitional provisions and savings in art. 3)

6 Challenge of decisions.E+W+S

(1)Subject to this section, an application to the court may be made, by any of the persons specified below, on one or both of the following grounds, namely—

(a)that a voluntary arrangement [F51which has effect under section 4A] unfairly prejudices the interests of a creditor, member or contributory of the company;

(b)that there has been some material irregularity at or in relation to [F52either of the meetings] [F52the meeting of the company, or in relation to the relevant qualifying decision procedure] .

[F53(1A)In this section—

(a)the “relevant qualifying decision procedure” means the qualifying decision procedure in which the company's creditors decide whether to approve a voluntary arrangement;

(b)references to a decision made in the relevant qualifying decision procedure include any other decision made in that qualifying decision procedure.]

(2)The persons who may apply under [F54subsection (1)] are—

(a)a person entitled, in accordance with the rules, to vote at [F55either of the meetings] [F55the meeting of the company or in the relevant qualifying decision procedure] ;

[F56(aa)a person who would have been entitled, in accordance with the rules, to vote [F57at the creditors’ meeting] [F57in the relevant qualifying decision procedure] if he had had notice of it]

(b)the nominee or any person who has replaced him under section 2(4) or 4(2); and

(c)if the company is being wound up or [F58is in administration], the liquidator or administrator.

[F59(2A)Subject to this section, where a voluntary arrangement in relation to a company in energy administration is approved at the meetings summoned under section 3, an application to the court may be made—

(a)by the Secretary of State, or

(b)with the consent of the Secretary of State, by the Gas and Electricity Markets Authority,

on the ground that the voluntary arrangement is not consistent with the achievement of the objective of the energy administration.]

(3)An application under this section shall not be made[F60(a)]after the end of the period of 28 days beginning with the first day on which each of the reports required by section 4(6) [F61and (6A)] has been made to the court [F62or

(b)in the case of a person who was not given notice of the [F63creditors’ meeting] [F63relevant qualifying decision procedure] , after the end of the period of 28 days beginning with the day on which he became aware that [F64the meeting] [F64the relevant qualifying decision procedure] had taken place,

but (subject to that) an application made by a person within subsection (2)(aa) on the ground that the voluntary arrangement prejudices his interests may be made after the arrangement has ceased to have effect, unless it came to an end prematurely.]

(4)Where on such an application the court is satisfied as to either of the grounds mentioned in subsection (1) [F65or, in the case of an application under subsection (2A), as to the ground mentioned in that subsection], it may do [F66one or both] [F66any] of the following, namely—

(a)revoke or suspend [F67any decision approving the voluntary arrangement which has effect under section 4A] or, in a case falling within subsection (1)(b), any [F68decision taken by the meeting [F69in question] [F69of the company, or in the relevant qualifying decision procedure,] which has effect under that section];

(b)give a direction to any person for the summoning of [F70further meetings] [F70a further company meeting] to consider any revised proposal the person who made the original proposal may make or, in the case falling within subsection (1)(b), [F71a further company or (as the case may be) creditors’] [F71and relating to the company meeting, a further company] meeting to reconsider the original proposal.

[F72(c)direct any person—

(i)to seek a decision from the company's creditors (using a qualifying decision procedure) as to whether they approve any revised proposal the person who made the original proposal may make, or

(ii)in a case falling within subsection (1)(b) and relating to the relevant qualifying decision procedure, to seek a decision from the company's creditors (using a qualifying decision procedure) as to whether they approve the original proposal.]

(5)Where at any time after giving a direction under subsection (4)(b) [F73for the summoning of meetings to consider] [F73or (c) in relation to] a revised proposal the court is satisfied that the person who made the original proposal does not intend to submit a revised proposal, the court shall revoke the direction and revoke or suspend any [F74decision approving the voluntary arrangement which has effect under section 4A].

(6)In a case where the court, on an application under this section with respect to any meeting [F75or relevant qualifying decision procedure]

(a)gives a direction under subsection (4)(b) [F76or (c)] , or

(b)revokes or suspends an approval under subsection (4)(a) or (5),

the court may give such supplemental directions as it thinks fit and, in particular, directions with respect to things done [F77under the voluntary arrangement since it took effect].

(7)Except in pursuance of the preceding provisions of this section,

[F78(a)[F79a decision taken] at a [F80company] meeting summoned under section 3 is not invalidated by any irregularity at or in relation to the meeting.][F81, and

(b)a decision of the company's creditors made in the relevant qualifying decision procedure is not invalidated by any irregularity in relation to the relevant qualifying decision procedure.]

[F82(8)In this section “in energy administration” and “objective of the energy administration” are to be construed in accordance with Schedule B1 to this Act, as applied by Part 1 of Schedule 20 to the Energy Act 2004.]

Textual Amendments

F51Words in s. 6(1)(a) substituted (1.1.2003) by 2000 c. 39, s. 2, Sch. 2 Pt. I para. 7(2); S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F52Words in s. 6(1)(b) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 7(2); S.I. 2015/1329, reg. 3(d)

F55Words in s. 6(2)(a) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 7(4)(a); S.I. 2015/1329, reg. 3(d)

F56S. 6(2)(aa) inserted (1.1.2003) by 2000 c. 39, s. 2, Sch. 2 Pt. I para. 7(3); S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F57Words in s. 6(2)(aa) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 7(4)(b); S.I. 2015/1329, reg. 3(d)

F58Words in s. 6(2)(c) substituted (15.9.2003) by 2002 c. 40, ss. 248(3), 279, Sch. 17 para. 12 (with s. 249(1)-(3)(6)); S.I. 2003/2093, art. 2(1), Sch. 1 (subject to arts. 3-8 (as amended by S.I. 2003/2332, art. 2))

F60In s. 6(3) “(a)" inserted (1.1.2003) by 2000 c. 39, s. 2, Sch. 2 Pt. I para. 7(4)(a); S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F61Words in s. 6(3)(a) inserted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 7(5); S.I. 2015/1329, reg. 3(d)

F62S. 6(3)(b) and words inserted (1.1.2003) by 2000 c. 39, s. 2, Sch. 2 Pt. I para. 7(4)(b); S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F63Words in s. 6(3)(b) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 7(6)(a); S.I. 2015/1329, reg. 3(d)

F64Words in s. 6(3)(b) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 7(6)(b); S.I. 2015/1329, reg. 3(d)

F66Word in s. 6(4) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 7(7); S.I. 2015/1329, reg. 3(d)

F67Words in s. 6(4)(a) substituted (1.1.2003) by 2000 c. 39, s. 2, Sch. 2 Pt. I para. 7(5)(a); S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F68Words in s. 6(4)(a) substituted (1.1.2003) by 2000 c. 39, s. 2, Sch. 2 Pt. I para. 7(5)(b); S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F69Words in s. 6(4)(a) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 7(8); S.I. 2015/1329, reg. 3(d)

F70Words in s. 6(4)(b) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 7(9)(a); S.I. 2015/1329, reg. 3(d)

F71Words in s. 6(4)(b) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 7(9)(b); S.I. 2015/1329, reg. 3(d)

F73Words in s. 6(5) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 7(11); S.I. 2015/1329, reg. 3(d)

F74Words in s. 6(5) substituted (1.1.2003) by 2000 c. 39, s. 2, Sch. 2 Pt. I para. 7(6); S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F77Words in s. 6(6) substituted (1.1.2003) by 2000 c. 39, s. 2, Sch. 2 Pt. I para. 7(7); S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F78Words in s. 6(7) renumbered as s. 6(7)(a) (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 7(13)(a); S.I. 2015/1329, reg. 3(d)

F79Words in s. 6(7) substituted (1.1.2003) by 2000 c. 39, s. 2, Sch. 2 Pt. I para. 7(8); S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

Modifications etc. (not altering text)

C18S. 6 amended (1.12.2001) by 2000 c. 8, s. 356(2); S.I. 2001/3538, art. 2(1)

S. 6 amended (1.1.2003) by 2000 c. 8, s. 356(1) (as substituted (1.1.2003) by 2000 c. 39, s. 15(3)); S.I. 2002/2711, art 2 (subject to transitional provisions in arts. 3-5)

[F836A False representations, etc.E+W+S

(1)If, for the purpose of obtaining the approval of the members or creditors of a company to a proposal for a voluntary arrangement, a person who is an officer of the company—

(a)makes any false representation, or

(b)fraudulently does, or omits to do, anything,

he commits an offence.

(2)Subsection (1) applies even if the proposal is not approved.

(3)For purposes of this section “officer” includes a shadow director.

(4)A person guilty of an offence under this section is liable to imprisonment or a fine, or both.]

Textual Amendments

F83S. 6A inserted (1.1.2003) by 2000 c. 39, s. 2, Sch. 2 Pt. I para. 8; S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

7 Implementation of proposal.E+W+S

(1)This section applies where a voluntary arrangement [F84has effect under section 4A].

(2)The person who is for the time being carrying out in relation to the voluntary arrangement the functions conferred—

[F85(a)on the nominee by virtue of the approval [F86given at one or both of the meetings summoned under] [F86of the voluntary arrangement by the company or its creditors (or both) pursuant to] section 3]

(b)by virtue of section 2(4) or 4(2) on a person other than the nominee,

shall be known as the supervisor of the voluntary arrangement.

(3)If any of the company’s creditors or any other person is dissatisfied by any act, omission or decision of the supervisor, he may apply to the court; and on the application the court may—

(a)confirm, reverse or modify any act or decision of the supervisor,

(b)give him directions, or

(c)make such other order as it thinks fit.

(4)The supervisor—

(a)may apply to the court for directions in relation to any particular matter arising under the voluntary arrangement, and

(b)is included among the persons who may apply to the court for the winding up of the company or for an administration order to be made in relation to it.

(5)The court may, whenever—

(a)it is expedient to appoint a person to carry out the functions of the supervisor, and

(b)it is inexpedient, difficult or impracticable for an appointment to be made without the assistance of the court,

make an order appointing a person who is qualified to act as an insolvency practitioner [F87F88... in relation to the voluntary arrangement], either in substitution for the existing supervisor or to fill a vacancy.

(6)The power conferred by subsection (5) is exercisable so as to increase the number of persons exercising the functions of supervisor or, where there is more than one person exercising those functions, so as to replace one or more of those persons.

Textual Amendments

F84Words in s. 7(1) substituted (1.1.2003) by 2000 c. 39, s. 2, Sch. 2 Pt. I para. 9(a); S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F85S. 7(2)(a) substituted (1.1.2003) by 2000 c. 39, s. 2, Sch. 2 Pt. I para. 9(b); S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F86Words in s. 7(2)(a) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 8; S.I. 2015/1329, reg. 3(d)

F87Words in s. 7(5) substituted (1.1.2003) by 2000 c. 39, s. 2, Sch. 2 Pt. I para. 9(c); S.I. 2002/2711, art. 2, (subject to transitional provisions in arts. 3-5)

Modifications etc. (not altering text)

C20S. 7 amended (1.1.2003) by 2000 c. 8, s. 356(1) (as substituted (1.1.2003) by 2000 c. 39, s. 15(3)); S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

[F897A Prosecution of delinquent officers of company.E+W+S

(1)This section applies where a moratorium under section 1A has been obtained for a company or the approval of a voluntary arrangement in relation to a company has taken effect under section 4A or paragraph 36 of Schedule A1.

(2)If it appears to the nominee or supervisor that any past or present officer of the company has been guilty of any offence in connection with the moratorium or, as the case may be, voluntary arrangement for which he is criminally liable, the nominee or supervisor shall forthwith—

(a)report the matter to the appropriate authority, and

(b)provide the appropriate authority with such information and give the authority such access to and facilities for inspecting and taking copies of documents (being information or documents in the possession or under the control of the nominee or supervisor and relating to the matter in question) as the authority requires.

(3)Where a report is made to the Secretary of State under subsection (2), he may, for the purpose of investigating the matter reported to him and such other matters relating to the affairs of the company as appear to him to require investigation, exercise any of the powers which are exercisable by inspectors appointed under section 431 or 432 of the [F90the Companies Act 1985] to investigate a company’s affairs.

(4)For the purpose of such an investigation any obligation imposed on a person by any provision of the [F91the Companies Acts] to produce documents or give information to, or otherwise to assist, inspectors so appointed is to be regarded as an obligation similarly to assist the Secretary of State in his investigation.

(5)An answer given by a person to a question put to him in exercise of the powers conferred by subsection (3) may be used in evidence against him.

(6)However, in criminal proceedings in which that person is charged with an offence to which this subsection applies—

(a)no evidence relating to the answer may be adduced, and

(b)no question relating to it may be asked,

by or on behalf of the prosecution, unless evidence relating to it is adduced, or a question relating to it is asked, in the proceedings by or on behalf of that person.

(7)Subsection (6) applies to any offence other than—

(a)an offence under section 2 or 5 of the M1Perjury Act 1911 (false statements made on oath otherwise than in judicial proceedings or made otherwise than on oath), or

(b)an offence under section 44(1) or (2) of the M2Criminal Law (Consolidation) (Scotland) Act 1995 (false statements made on oath or otherwise than on oath).

(8)Where a prosecuting authority institutes criminal proceedings following any report under subsection (2), the nominee or supervisor, and every officer and agent of the company past and present (other than the defendant or defender), shall give the authority all assistance in connection with the prosecution which he is reasonably able to give.

For this purpose—

  • agent” includes any banker or solicitor of the company and any person employed by the company as auditor, whether that person is or is not an officer of the company,

  • prosecuting authority” means the Director of Public Prosecutions, the Lord Advocate or the Secretary of State.

(9)The court may, on the application of the prosecuting authority, direct any person referred to in subsection (8) to comply with that subsection if he has failed to do so.]

Textual Amendments

F89Ss. 7A, 7B inserted (1.1.2003) by 2000 c. 39, s. 2, Sch. 2 Pt. I para. 10; S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F90Words in s. 7A(3) substituted (1.10.2009) by The Companies Act 2006 (Consequential Amendments, Transitional Provisions and Savings) Order 2009, (S.I. 2009/1941) arts. 2(1), 8, {Sch. 1 para. 71(3)(a)} (with art. 10, Sch. 1 para. 84)

F91Words in s. 7A(4) substituted (1.10.2009) by The Companies Act 2006 (Consequential Amendments, Transitional Provisions and Savings) Order 2009, (S.I. 2009/1941) arts. 2(1), 8, {Sch. 1 para. 71(3)(b)} (with art. 10, Sch. 1 para. 84)

Modifications etc. (not altering text)

C21S. 7A modified (1.1.2003) by 1986 c. 53, Sch. 15A para 9A (as inserted (1.1.2003) by 2000 c. 39, s. 2, Sch. 2 Pt. II para. 14(4)); S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

C22S. 7A(2) amended (1.1.2003) by 2000 c. 39, s. 2, Sch. 2 Pt. II para. 13(1); S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

Marginal Citations

F927B Arrangements coming to an end prematurely.E+W+S

For the purposes of this Part, a voluntary arrangement the approval of which has taken effect under section 4A or paragraph 36 of Schedule A1 comes to an end prematurely if, when it ceases to have effect, it has not been fully implemented in respect of all persons bound by the arrangement by virtue of section 5(2)(b)(i) or, as the case may be, paragraph 37(2)(b)(i) of Schedule A1.

Textual Amendments

F92Ss. 7A, 7B inserted (1.1.2003) by 2000 c. 39, s. 2, Sch. 2 Pt. I para. 10; S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

[F93Part IIE+W+Sadministration

Textual Amendments

F93Pt. II (s. 8) substituted (15.9.2003) for Pt. II (ss. 8-27) by Enterprise Act 2002 (c. 40), ss. 248(1), 279 (with s. 249(1)-(3)(6)); S.I. 2003/2093, art. 2(1), Sch. 1 (subject to arts. 3-8 (as amended by S.I. 2003/2332, art. 2)); specified provisions which were preserved in relation to special administration schemes by s. 249 of the substituting Act are excluded (26.12.2003) by S.I. 2003/3226, reg. 8(3)(4); specified substituted provisions applied (with modifications) and modified (28.11.2005) by S.I. 2005/3050, regs. 4, 14, 20, Sch. 3 paras. 1(a), 2 (with Sch. 4); specified substituted provisions applied and amended (30.11.2007) by S.I. 2007/3141, rules 3, 13(4), 18(1); specified substituted provisions amended (1.10.2009) by S.I. 2009/1941, arts. 2(1), 8, Sch. 1 para. 73(1)(2)(a)(b)(3) (with Sch. 1 para. 84); and by S.I. 2009/1972, regs. 4(d)(iii), 7(a)

Modifications etc. (not altering text)

C25Pts. 1-4, 6, 7 applied to limited liability partnerships (with modifications) (E.W.S.) (6.4.2001) by S.I. 2001/1090, reg. 5, Schs. 3, 4 (as amended (4.3.2004) by S.I. 2004/355, art. 10 and (1.10.2005) by S.I. 2005/1989, reg. 3, Sch. 2 (with reg. 4))

C26Pts. I-VII (ss. 1-251) applied (with modifications) by S.I. 1989/1276, arts. 2, 3 (as amended (3.7.2002) by S.I. 2002/1555, art. 34)

Pt. II applied (with modifications) by S.I. 1989/1276, arts. 2, 3 (as amended (1.12.2001) by S.I. 2001/3649, arts. 1, 398)

Pt. II applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 6(1), Sch. 2 (as amended (3.7.2002) by S.I. 2002/1555, art. 36 and (1.7.2005) by S.I. 2005/1516, arts. 3, 7, Sch. 1 (with art. 2))

Pt. II applied (with modifications) (1.12.1997) by 1986 c. 53, Sch. 15A (as inserted by 1997 c. 32, s. 39(2), Sch. 6 para. 1(2)(a); S.I. 1997/2668, art. 2, Sch. Pt. I(i)

Pt. II applied (with modifications) (31.5.2002) by S.I. 2002/1242, art. 3, Sch.

C27First Group of Parts (Pts. 1-7) applied (with modifications) (15.12.2006) by The Banks (Former Authorised Institutions) (Insolvency) Order 2006 (S.I. 2006/3107), art. 3, Sch.

C28Pt. II restricted (E.W.) by Water Act 1989 (c. 15, SIF 130), s. 24(b) (with ss. 58(7), 101(1), 141(6), 160(1)(2)(4), 163, 189(4)-(10), 190, 193(1), Sch. 26 paras. 3(1)(2), 17, 40(4), 57(6), 58)

Pt. II restricted (1.4.1994) by 1993 c. 43, ss. 62(5), 150(1)(c); S.I. 1994/571, art. 5 (with transitional provision in art. 7)

C29Pt. II: power to apply or incorporate conferred (6.4.2001) by 2000 c. 12, s. 14; S.I. 2000/3316, art. 2

Pt. II: power to apply (with modifications) conferred (20.7.2001) by 2000 c. 8, s. 360; S.I. 2001/2632, art. 2(1), Sch. Pt. I

Pt. II: power to apply (with modifications) conferred (15.9.2003) by Enterprise Act 2002 (c. 40), ss. 255(2)(b), 279 (with s. 249(6)); S.I. 2003/2093, art. 2(1), Sch. 1 (subject to arts. 3-8 (as amended by S.I. 2003/2332, art. 2))

C32Pt. 2 amendment to earlier affecting provision by S.I. 2014/229, art. 2(2), Sch. 1 Pts. 1, 3, 4 (1.8.2014) by The Co-operative and Community Benefit Societies and Credit Unions (Arrangements, Reconstructions and Administration) (Amendment) Order 2014 (S.I. 2014/1822), arts. 1(2), 5(f)(m)

C33Pt. 2 power to apply (with or without modifications) (1.8.2014) by Co-operative and Community Benefit Societies Act 2014 (c. 14), s. 118(1)(2)154 (with Sch. 5)

8 AdministrationE+W+S

Schedule B1 to this Act (which makes provision about the administration of companies) shall have effect.]

F94 Part IIE+W+S Administration Orders

Textual Amendments

F94Pt. II (s. 8) substituted (15.9.2003) for Pt. II (ss. 8-27) by Enterprise Act 2002 (c. 40), ss. 248(1), 279 (with s. 249(1)-(3)(6)); S.I. 2003/2093, art. 2(1), Sch. 1 (subject to arts. 3-8 (as amended by S.I. 2003/2332, art. 2))

Modifications etc. (not altering text)

C35Pt. I (ss. 1-7), Pt. II (ss. 8-27) modified by Company Directors Disqualification Act 1986 (c. 46, SIF 27), ss. 21(2), 25

Pt. II (ss. 8-27) modified (15.7.2003) by 1999 c. 29, ss. 223(5)(6), 224(5), 425(2) (with Sch. 12 para. 9(1)); S.I. 2003/1920, art. 2(b)

C36Pts. I-VII (ss. 1-251) applied (with modifications) by S.I. 1989/1276, arts. 2, 3 (as amended (3.7.2002) by S.I. 2002/1555, art. 34)

Pt. II (ss. 8-27) applied (with modifications) by S.I. 1989/1276, arts. 2, 3 (as amended (1.12.2001) by S.I. 2001/3649, arts. 1, 398)

Pt. II (ss. 8-27) applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 6(1), Sch. 2 (as amended (3.7.2002) by S.I. 2002/1555, art. 36)

Pt. II (ss. 8-27) applied (with modifications) (1.12.1997) by 1986 c. 53, Sch. 15A (as inserted by 1997 c. 32, s. 39(2), Sch. 6 para. 1(2)(a); S.I. 1997/2668, art. 2, Sch. Pt. I(i)

Pt. II (ss. 8-27) applied (with modifications) (31.5.2002) by S.I. 2002/1242, art. 3, Sch.

C37Pts. 1-4, 6, 7 applied to limited liability partnerships (with modifications) (E.W.S.) (6.4.2001) by S.I. 2001/1090, reg. 5, Schs. 3, 4

C38Pt. II (ss. 8-27) restricted (E.W.) by Water Act 1989 (c. 15, SIF 130), s. 24(b) (with ss. 58(7), 101(1), 141(6), 160(1)(2)(4), 163, 189(4)-(10), 190, 193(1), Sch. 26 paras. 3(1)(2), 17, 40(4), 57(6), 58)

Pt. II (ss. 8-27) restricted (1.4.1994) by 1993 c. 43, ss. 62(5), 150(1)(c); S.I. 1994/571, art. 5 (with transitional provision in art. 7)

C39Pt. II (ss. 8-27) power to apply or incorporate conferred (6.4.2001) by 2000 c. 12, s. 14; S.I. 2000/3316, art. 2

Pt. II (ss. 8-27) power to apply (with modifications) conferred (20.7.2001) by 2000 c. 8, s. 360; S.I. 2001/2632, art. 2(1), Sch. Pt. I

C40Pt. 2 amendment to earlier affecting provision S.I. 1994/2421, Sch. 2 (1.1.2015) by The Banks and Building Societies (Depositor Preference and Priorities) Order 2014 (S.I. 2014/3486), arts. 1(2), 13 (with art. 3)

C41Pt. 2 modified by 1991 c. 56, Sch. 3 (as amended (26.5.2015) by Deregulation Act 2015 (c. 20), s. 115(3)(r), Sch. 23 para. 28(4)(e))

C42Pt. 2 modified (26.5.2015) by Deregulation Act 2015 (c. 20) s. 115(3)(n), Sch. 6 para. 25

Making etc. of administration orderE+W+S

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

AdministratorsE+W+S

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Ascertainment and investigation of company’s affairsE+W+S

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Administrator’s proposalsE+W+S

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

MiscellaneousE+W+S

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part IIIE+W+S Receivership

Modifications etc. (not altering text)

C105Pts. I-VII (ss. 1-251) applied (with modifications) by S.I. 1989/1276, arts. 2, 3

Pt. 3 applied (with modifications) (4.4.2006) by The Cross-Border Insolvency Regulations 2006 (S.I. 2006/1030), reg. 3

C106Pt. III (ss. 28-72) extended by S.I. 1989/638, regs. 19(1), 21

C107First Group of Parts (Pts. 1-7) applied (with modifications) (15.12.2006) by The Banks (Former Authorised Institutions) (Insolvency) Order 2006 (S.I. 2006/3107), art. 3, Sch.

C108Pt. III: power to apply or incorporate conferred (6.4.2001) by 2000 c. 12, s. 14; S.I. 2000/3316, art. 2

C109Pts. 1-4, 6, 7 applied to limited liability partnerships (with modifications) (E.W.S.) (6.4.2001) by S.I. 2001/1090, reg. 5, Schs. 3, 4 (as amended (4.3.2004) by S.I. 2004/355, art. 10 and (1.10.2005) by S.I. 2005/1989, reg. 3, Sch. 2 (with reg. 4))

Chapter IE+W+S Receivers and Managers (England and Wales)

Modifications etc. (not altering text)

C110Pt. III Chapter 1 (ss. 28-49) applied (with modifications) (1.12.1997) by 1986 c. 53, Sch. 15A (as inserted by 1997 c. 32, s. 39(2), Sch. 6 para. 1(2)(a); S.I. 1997/2668, art. 2, Sch. Pt. I(i))

Preliminary and general provisionsE+W+S

[F10528 Extent of this Chapter.E+W+S

(1)In this Chapter “company” means a company registered under the Companies Act 2006 in England and Wales or Scotland.

(2)This Chapter does not apply to receivers appointed under Chapter 2 of this Part (Scotland).]

Textual Amendments

F105S. 28 substituted (1.10.2009) by The Companies Act 2006 (Consequential Amendments, Transitional Provisions and Savings) Order 2009, (S.I. 2009/1941) arts. 2(1), 8, {Sch. 1 para. 74(2)} (with art. 10, Sch. 1 para. 84)

29 Definitions.E+W+S

(1)It is hereby declared that, except where the context otherwise requires—

(a)any reference in F106. . . this Act to a receiver or manager of the property of a company, or to a receiver of it, includes a receiver or manager, or (as the case may be) a receiver of part only of that property and a receiver only of the income arising from the property or from part of it; and

(b)any reference in F106. . . this Act to the appointment of a receiver or manager under powers contained in an instrument includes an appointment made under powers which, by virtue of any enactment, are implied in and have effect as if contained in an instrument.

(2)In this Chapter “administrative receiver” means—

(a)a receiver or manager of the whole (or substantially the whole) of a company’s property appointed by or on behalf of the holders of any debentures of the company secured by a charge which, as created, was a floating charge, or by such a charge and one or more other securities; or

(b)a person who would be such a receiver or manager but for the appointment of some other person as the receiver of part of the company’s property.

Textual Amendments

F106Words in s. 29(1)(a)(b) omitted (1.10.2009) by virtue of The Companies Act 2006 (Consequential Amendments, Transitional Provisions and Savings) Order 2009, (S.I. 2009/1941) arts. 2(1), 8, {Sch. 1 para. 74(3)} (with art. 10, Sch. 1 para. 84)

30 Disqualification of body corporate from acting as receiver.E+W+S

A body corporate is not qualified for appointment as receiver of the property of a company, and any body corporate which acts as such a receiver is liable to a fine.

[F10831 Disqualification of bankrupt [F107 or person in respect of whom a debt relief order is made] E+W+S

(1)A person commits an offence if he acts as receiver or manager of the property of a company on behalf of debenture holders while—

(a)he is an undischarged bankrupt,

[F109(aa)a moratorium period under a debt relief order applies in relation to him,] or

(b)a bankruptcy restrictions order [F110or a debt relief restrictions order] is in force in respect of him.

(2)A person guilty of an offence under subsection (1) shall be liable to imprisonment, a fine or both.

(3)This section does not apply to a receiver or manager acting under an appointment made by the court.]

Textual Amendments

F107S. 31: words in heading inserted (24.2.2009 for certain purposes otherwise 6.4.2009) by Tribunals, Courts and Enforcement Act 2007 (c. 15), ss. 108(3), 148(5), Sch. 20 para. 2(2); S.I. 2009/382, art. 2

F108S. 31 substituted (1.4.2004) by 2002 c. 40, ss. 257(3), 278, Sch. 21 para. 1 (with s. 249(6)); S.I. 2003/2093, art. 2(2), Sch. 2 (subject to arts. 3-8 (as amended by S.I. 2003/2332, art. 2))

F109S. 31(1)(aa) inserted (24.2.2009 for certain purposes otherwise 6.4.2009) by Tribunals, Courts and Enforcement Act 2007 (c. 15), ss. 108(3), 148(5), Sch. 20 para. 2(1)(a); S.I. 2009/382, art. 2

F110Words in s. 31(1)(b) inserted (24.2.2009 for certain purposes otherwise 6.4.2009) by Tribunals, Courts and Enforcement Act 2007 (c. 15), ss. 108(3), 148(5), Sch. 20 para. 2(1)(b); S.I. 2009/382, art. 2

32 Power for court to appoint official receiver.E+W+S

Where application is made to the court to appoint a receiver on behalf of the debenture holders or other creditors of a company which is being wound up by the court, the official receiver may be appointed.

Receivers and managers appointed out of courtE+W+S

33 Time from which appointment is effective.E+W+S

(1)The appointment of a person as a receiver or manager of a company’s property under powers contained in an instrument—

(a)is of no effect unless it is accepted by that person before the end of the business day next following that on which the instrument of appointment is received by him or on his behalf, and

(b)subject to this, is deemed to be made at the time at which the instrument of appointment is so received.

(2)This section applies to the appointment of two or more persons as joint receivers or managers of a company’s property under powers contained in an instrument, subject to such modifications as may be prescribed by the rules.

34 Liability for invalid appointment.E+W+S

Where the appointment of a person as the receiver or manager of a company’s property under powers contained in an instrument is discovered to be invalid (whether by virtue of the invalidity of the instrument or otherwise), the court may order the person by whom or on whose behalf the appointment was made to indemnify the person appointed against any liability which arises solely by reason of the invalidity of the appointment.

35 Application to court for directions.E+W+S

(1)A receiver or manager of the property of a company appointed under powers contained in an instrument, or the persons by whom or on whose behalf a receiver or manager has been so appointed, may apply to the court for directions in relation to any particular matter arising in connection with the performance of the functions of the receiver or manager.

(2)On such an application, the court may give such directions, or may make such order declaring the rights of persons before the court or otherwise, as it thinks just.

Modifications etc. (not altering text)

C111S. 35 amended (1.12.2001) by 2000 c. 8, s. 363(2); S.I. 2001/3538, art. 2(1)

36 Court’s power to fix remuneration.E+W+S

(1)The court may, on an application made by the liquidator of a company, by order fix the amount to be paid by way of remuneration to a person who, under powers contained in an instrument, has been appointed receiver or manager of the company’s property.

(2)The court’s power under subsection (1), where no previous order has been made with respect thereto under the subsection—

(a)extends to fixing the remuneration for any period before the making of the order or the application for it,

(b)is exercisable notwithstanding that the receiver or manager has died or ceased to act before the making of the order or the application, and

(c)where the receiver or manager has been paid or has retained for his remuneration for any period before the making of the order any amount in excess of that so fixed for that period, extends to requiring him or his personal representatives to account for the excess or such part of it as may be specified in the order.

But the power conferred by pararaph (c) shall not be exercised as respects any period before the making of the application for the order under this section, unless in the court’s opinion there are special circumstances making it proper for the power to be exercised.

(3)The court may from time to time on an application made either by the liquidator or by the receiver or manager, vary or amend an order made under subsection (1).

37 Liability for contracts, etc.E+W+S

(1)A receiver or manager appointed under powers contained in an instrument (other than an administrative receiver) is, to the same extent as if he had been appointed by order of the court—

(a)personally liable on any contract entered into by him in the performance of his functions (except in so far as the contract otherwise provides) and on any contract of employment adopted by him in the performance of those functions, and

(b)entitled in respect of that liability to indemnity out of the assets.

(2)For the purposes of subsection (1)(a), the receiver or manager is not to be taken to have adopted a contract of employment by reason of anything done or omitted to be done with 14 days after his appointment.

(3)Subsection (1) does not limit any right to indemnity which the receiver or manager would have apart from it, nor limit his liability on contracts entered into without authority, nor confer any right to indemnity in respect of that liability.

(4)Where at any time the receiver or manager so appointed vacates office—

(a)his remuneration and any expenses properly incurred by him, and

(b)any indemnity to which he is entitled out of the assets of the company,

shall be charged on and paid out of any property of the company which is in his custody or under his control at that time in priority to any charge or other security held by the person by or on whose behalf he was appointed.

38 Receivership accounts to be delivered to registrar.E+W+S

(1)Except in the case of an adminstrative receiver, every receiver or manager of a company’s property who has been appointed under powers contained in an instrument shall deliver to the registrar of companies for registration the requisite accounts of his receipts and payments.

(2)The accounts shall be delivered within one month (or such longer period as the registrar may allow) after the expiration of 12 months from the date of his appointment and of every subsequent period of 6 months, and also within one month after he ceases to act as receiver or manager.

(3)The requisite accounts shall be an abstract in the prescribed form showing—

(a)receipts and payments during the relevant period of 12 or 6 months, or

(b)where the receiver or manager ceases to act, receipts and payments during the period from the end of the period of 12 or 6 months to which the last preceding abstract related (or, if no preceding abstract has been delivered under this section, from the date of his appointment) up to the date of his so ceasing, and the aggregate amount of receipts and payments during all preceding periods since his appointment.

(4)In this section “prescribed” means prescribed by regulations made by statutory instrument by the Secretary of State.

(5)A receiver or manager who makes default in complying with this section is liable to a fine and, for continued contravention, to a daily default fine.

Provisions applicable to every receivershipE+W+S

39 Notification that receiver or manager appointed.E+W+S

[F111(1)Where a receiver or manager of the property of a company has been appointed—

(a)every invoice, order for goods or services, business letter or order form (whether in hard copy, electronic or any other form) issued by or on behalf of the company or the receiver or manager or the liquidator of the company; and

(b)all the company's websites,

must contain a statement that a receiver or manager has been appointed.]

(2)If default is made in complying with this section, the company and any of the following persons, who knowingly and wilfully authorises or permits the default, namely, any officer of the company, any liquidator of the company and any receiver or manager, is liable to a fine.

40 Payment of debts out of assets subject to floating charge.E+W+S

(1)The following applies in the case of a company, where a receiver is appointed on behalf of the holders of any debentures of the company secured by a charge which, as created, was a floating charge.

(2)If the company is not at the time in course of being wound up, its preferential debts (within the meaning given to that expression by section 386 in Part XII) shall be paid out of the assets coming to the hands of the receiver in priority to any claims for principal or interest in respect of the debentures.

(3)Payments made under this section shall be recouped, as far as may be, out of the assets of the company available for payment of general creditors.

41 Enforcement of duty to make returns.E+W+S

(1)If a receiver or manager of a company’s property—

(a)having made default in filing, delivering or making any return, account or other document, or in giving any notice, which a receiver or manager is by law required to file, deliver, make or give, fails to make good the default within 14 days after the service on him of a notice requiring him to do so, or

(b)having been appointed under powers contained in an instrument, has, after being required at any time by the liquidator of the company to do so, failed to render proper accounts of his receipts and payments and to vouch them and pay over to the liquidator the amount properly payable to him,

the court may, on an application made for the purpose, make an order directing the receiver or manager (as the case may be) to make good the default within such time as may be specified in the order.

(2)In the case of the default mentioned in subsection (1)(a), application to the court may be made by any member or creditor of the company or by the registrar of companies; and in the case of the default mentioned in subsection (1)(b), the application shall be made by the liquidator.

In either case the court’s order may provide that all costs of and incidental to the application shall be borne by the receiver or manager, as the case may be.

(3)Nothing in this section prejudices the operation of any enactment imposing penalties on receivers in respect of any such default as is mentioned in subsection (1).

Modifications etc. (not altering text)

C115S. 41(1)(a) amended (1.12.2001) by 2000 c. 8, s. 363(3); S.I. 2001/3538, art. 2(1)

Administrative receivers: generalE+W+S

42 General powers.E+W+S

(1)The powers conferred on the administrative receiver of a company by the debentures by virtue of which he was appointed are deemed to include (except in so far as they are inconsistent with any of the provisions of those debentures) the powers specified in Schedule 1 to this Act.

(2)In the application of Schedule 1 to the administrative receiver of a company—

(a)the words “he” and “him” refer to the administrative receiver, and

(b)references to the property of the company are to the property of which he is or, but for the appointment of some other person as the receiver of part of the company’s property, would be the receiver or manager.

(3)A person dealing with the administrative receiver in good faith and for value is not concerned to inquire whether the receiver is acting within his powers.

43 Power to dispose of charged property, etc.E+W

(1)Where, on an application by the administrative receiver, the court is satisfied that the disposal (with or without other assets) of any relevant property which is subject to a security would be likely to promote a more advantageous realisation of the company’s assets than would otherwise be effected, the court may by order authorise the administrative receiver to dispose of the property as if it were not subject to the security.

(2)Subsection (1) does not apply in the case of any security held by the person by or on whose behalf the administrative receiver was appointed, or of any security to which a security so held has priority.

(3)It shall be a condition of an order under this section that—

(a)the net proceeds of the disposal, and

(b)where those proceeds are less than such amount as may be determined by the court to be the net amount which would be realised on a sale of the property in the open market by a willing vendor, such sums as may be required to make good the deficiency,

shall be applied towards discharging the sums secured by the security.

(4)Where a condition imposed in pursuance of subsection (3) relates to two or more securities, that condition shall require the net proceeds of the disposal and, where paragraph (b) of that subsection applies, the sums mentioned in that paragraph to be applied towards discharging the sums secured by those securities in the order of their priorities.

(5)[F112A copy] of an order under this section shall, within 14 days of the making of the order, be sent by the administrative receiver to the registrar of companies.

(6)If the administrative receiver without reasonable excuse fails to comply with subsection (5), he is liable to a fine and, for continued contravention, to a daily default fine.

(7)In this section “relevant property”, in relation to the administrative receiver, means the property of which he is or, but for the appointment of some other person as the receiver of part of the company’s property, would be the receiver or manager.

Textual Amendments

F112Words in s. 43(5) substituted (1.10.2009) by The Companies Act 2006 (Consequential Amendments, Transitional Provisions and Savings) Order 2009, (S.I. 2009/1941) arts. 2(1), 8, {Sch. 1 para. 74(4)} (with art. 10, Sch. 1 para. 84)

Modifications etc. (not altering text)

C117S. 43 excluded (25.4.1991) by Companies Act 1989 (c. 40), ss. 154, 155, 175(3)(a); S.I. 1991/878, art. 2, Sch. .

S. 43 excluded (15.8.1995) by S.I. 1995/2049, reg. 21(4)(a)

44 Agency and liability for contracts.E+W+S

(1)The administrative receiver of a company—

(a)is deemed to be the company’s agent, unless and until the company goes into liquidation;

(b)is personally liable on any contract entered into by him in the carrying out of his functions (except in so far as the contract otherwise provides) and [F113, to the extent of any qualifying liability,]on any contract of employment adopted by him in the carrying out of those functions; and

(c)is entitled in respect of that liability to an indemnity out of the assets of the company.

(2)For the purposes of subsection (1)(b) the administrative receiver is not to be taken to have adopted a contract of employment by reason of anything done or omitted to be done within 14 days after his appointment.

[F114(2A)For the purposes of subsection (1)(b), a liability under a contract of employment is a qualifying liability if—

(a)it is a liability to pay a sum by way of wages or salary or contribution to an occupational pension scheme,

(b)it is incurred while the administrative receiver is in office, and

(c)it is in respect of services rendered wholly or partly after the adoption of the contract.

(2B)Where a sum payable in respect of a liability which is a qualifying liability for the purposes of subsection (1)(b) is payable in respect of services rendered partly before and partly after the adoption of the contract, liability under subsection (1)(b) shall only extend to so much of the sum as is payable in respect of services rendered after the adoption of the contract.

(2C)For the purposes of subsections (2A) and (2B)—

(a)wages or salary payable in respect of a period of holiday or absence from work through sickness or other good cause are deemed to be wages or (as the case may be) salary in respect of services rendered in that period, and

(b)a sum payable in lieu of holiday is deemed to be wages or (as the case may be) salary in respect of services rendered in the period by reference to which the holiday entitlement arose.

F115(2D). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

(3)This section does not limit any right to indemnity which the administrative receiver would have apart from it, nor limit his liability on contracts entered into or adopted without authority, nor confer any right to indemnity in respect of that liability.

Textual Amendments

F113Words in s. 44(1)(b) inserted (24.3.1994 with effect in relation to contracts of employment adopted on or after 15.3.1994) by 1994 c. 7, s. 2(2)(4)

F114S. 44(2A)-(2D) inserted (24.3.1994 with effect in relation to contracts of employment adopted on or after 15.3.1994) by 1994 c. 7, s. 2(3)(4)

F115S. 44(2D) omitted (26.5.2015) by virtue of Deregulation Act 2015 (c. 20), s. 115(3)(n), Sch. 6 para. 26

45 Vacation of office.E+W+S

(1)An administrative receiver of a company may at any time be removed from office by order of the court (but not otherwise) and may resign his office by giving notice of his resignation in the prescribed manner to such persons as may be prescribed.

(2)An administrative receiver shall vacate office if he ceases to be qualified to act as an insolvency practitioner in relation to the company.

(3)Where at any time an administrative receiver vacates office—

(a)his remuneration and any expenses properly incurred by him, and

(b)any indemnity to which he is entitled out of the assets of the company,

shall be charged on and paid out of any property of the company which is in his custody or under his control at that time in priority to any security held by the person by or on whose behalf he was appointed.

(4)Where an administrative receiver vacates office otherwise than by death, he shall, within 14 days after his vacation of office, send a notice to that effect to the registrar of companies.

(5)If an administrative receiver without reasonable excuse fails to comply with subsection (4), he is liable to a fine [F116and, for continued contravention, to a daily default fine].

Textual Amendments

Administrative receivers: ascertainment and investigation of company’s affairsE+W+S

46 Information to be given by administrative receiver.E+W+S

(1)Where an administrative receiver is appointed, he shall—

(a)forthwith send to the company and publish in the prescribed manner a notice of his appointment, and

(b)within 28 days after his appointment, unless the court otherwise directs, send such a notice to all the creditors of the company (so far as he is aware of their addresses).

(2)This section and the next do not apply in relation to the appointment of an administrative receiver to act—

(a)with an existing administrative receiver, or

(b)in place of an administrative receiver dying or ceasing to act,

except that, where they apply to an administrative receiver who dies or ceases to act before they have been fully complied with, the references in this section and the next to the administrative receiver include (subject to the next subsection) his successor and any continuing administrative receiver.

(3)If the company is being wound up, this section and the next apply notwithstanding that the administrative receiver and the liquidator are the same person, but with any necessary modifications arising from that fact.

(4)If the administrative receiver without reasonable excuse fails to comply with this section, he is liable to a fine and, for continued contravention, to a daily default fine.

47 Statement of affairs to be submitted.E+W+S

(1)Where an administrative receiver is appointed, he shall forthwith require some or all of the persons mentioned below to make out and submit to him a statement in the prescribed form as to the affairs of the company.

(2)A statement submitted under this section shall be verified by [F117a statement of truth] by the persons required to submit it and shall show—

(a)particulars of the company’s assets, debts and liabilities;

(b)the names and addresses of its creditors;

(c)the securities held by them respectively;

(d)the dates when the securities were respectively given; and

(e)such further or other information as may be prescribed.

(3)The persons referred to in subsection (1) are—

(a)those who are or have been officers of the company;

(b)those who have taken part in the company’s formation at any time within one year before the date of the appointment of the administrative receiver;

(c)those who are in the company’s employment, or have been in its employment within that year, and are in the administrative receiver’s opinion capable of giving the information required;

(d)those who are or have been within that year officers of or in the employment of a company which is, or within that year was, an officer of the company.

In this subsection “employment” includes employment under a contract for services.

(4)Where any persons are required under this section to submit a statement of affairs to the administrative receiver, they shall do so (subject to the next subsection) before the end of the period of 21 days beginning with the day after that on which the prescribed notice of the requirement is given to them by the administrative receiver.

(5)The administrative receiver, if he thinks fit, may—

(a)at any time release a person from an obligation imposed on him under subsection (1) or (2), or

(b)either when giving notice under subsection (4) or subsequently, extend the period so mentioned;

and where the administrative receiver has refused to exercise a power conferred by this subsection, the court, if it thinks fit, may exercise it.

(6)If a person without reasonable excuse fails to comply with any obligation imposed under this section, he is liable to a fine and, for continued contravention, to a daily default fine.

48 Report by administrative receiver.E+W+S

(1)Where an administrative receiver is appointed, he shall, within 3 months (or such longer period as the court may allow) after his appointment, send to the registrar of companies, to any trustees for secured creditors of the company and (so far as he is aware of their addresses) to all such creditors [F118, other than opted-out creditors,] a report as to the following matters, namely—

(a)the events leading up to his appointment, so far as he is aware of them;

(b)the disposal or proposed disposal by him of any property of the company and the carrying on or proposed carrying on by him of any business of the company;

(c)the amounts of principal and interest payable to the debenture holders by whom or on whose behalf he was appointed and the amounts payable to preferential creditors; and

(d)the amount (if any) likely to be available for the payment of other creditors.

(2)The administrative receiver shall also, within 3 months (or such longer period as the court may allow) after his appointment, either—

(a)send a copy of the report (so far as he is aware of their addresses) to all unsecured creditors of the company [F119, other than opted-out creditors,] or

(b)publish in the prescribed manner a notice stating an address to which unsecured creditors of the company should write for copies of the report to be sent to them free of charge,

[F120and (in either case), unless the court otherwise directs, lay a copy of the report before a meeting of the company’s unsecured creditors summoned for the purpose on not less than 14 days’ notice.]

(3)[F121The court shall not give a direction under subsection (2) unless—

(a)the report states the intention of the administrative receiver to apply for the direction, and

(b)a copy of the report is sent to the persons mentioned in paragraph (a) of that subsection, or a notice is published as mentioned in paragraph (b) of that subsection, not less than 14 days before the hearing of the application.]

(4)Where the company has gone or goes into liquidation, the administrative receiver—

(a)shall, within 7 days after his compliance with subsection (1) or, if later, the nomination or appointment of the liquidator, send a copy of the report to the liquidator, and

(b)where he does so within the time limited for compliance with subsection (2), is not required to comply with that subsection.

(5)A report under this section shall include a summary of the statement of affairs made out and submitted to the administrative receiver under section 47 and of his comments (if any) upon it.

(6)Nothing in this section is to be taken as requiring any such report to include any information the disclosure of which would seriously prejudice the carrying out by the administrative receiver of his functions.

(7)Section 46(2) applies for the purposes of this section also.

(8)If the administrative receiver without reasonable excuse fails to comply with this section, he is liable to a fine and, for continued contravention, to a daily default fine.

Textual Amendments

Modifications etc. (not altering text)

C118S. 48(1) amended (1.12.2001) by 2000 c. 8, s. 363(4); S.I. 2001/3538, art. 2(1)

49 Committee of creditors.E+W+S

(1)[F122Where a meeting of creditors is summoned under section 48, the meeting may, if it thinks fit] [F122Where an administrative receiver has sent or published a report as mentioned in section 48(2) the company's unsecured creditors may, in accordance with the rules] , establish a committee (“the creditors’ committee”) to exercise the functions conferred on it by or under this Act.

(2)If such a committee is established, the committee may, on giving not less than 7 days’ notice, require the administrative receiver to attend before it at any reasonable time and furnish it with such information relating to the carrying out by him of his functions as it may reasonably require.

Textual Amendments

Modifications etc. (not altering text)

C119S. 49 amended (1.12.2001) by 2000 c. 8, s. 363(5)(b); S.I. 2001/3538, art. 2(1)

Chapter IIS Receivers (Scotland)

50 Extent of this Chapter.S

This Chapter extends to Scotland only.

Modifications etc. (not altering text)

C120Ss. 50-52 applied (with modifications) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

51 Power to appoint receiver.S

(1)It is competent under the law of Scotland for the holder of a floating charge over all or any part of the property (including uncalled capital), which may from time to time be comprised in the property and undertaking of an incorporated company (whether [F123a company registered under the Companies Act 2006] or not)

[F124(a)which the Court of Session has jurisdiction to wind up; or

(b)where paragraph (a) does not apply, in respect of which a court of a member state other than the United Kingdom has under the EU Regulation jurisdiction to open insolvency proceedings,

to appoint a receiver of such part of the property of the company as is subject to the charge.]

(2)It is competent under the law of Scotland for the court, on the application of the holder of such a floating charge, to appoint a receiver of such part of the property of the company as is subject to the charge.

F125(2ZA). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F126(2A)Subsections (1) and (2) are subject to section 72A.]

(3)The following are disqualified from being appointed as receiver—

(a)a body corporate;

(b)an undischarged bankrupt; and

[F127(ba)a person subject to a bankruptcy restrictions order;]

(c)a firm according to the law of Scotland.

(4)A body corporate or a firm according to the law of Scotland which acts as a receiver is liable to a fine.

(5)An undischarged bankrupt [F128or a person subject to a bankruptcy restrictions order] who so acts is liable to imprisonment or a fine, or both.

(6)In this section, “receiver” includes joint receivers [F129; and

Textual Amendments

F123Words in s. 51(1) substituted (1.10.2009) by The Companies Act 2006 (Consequential Amendments, Transitional Provisions and Savings) Order 2009, (S.I. 2009/1941) arts. 2(1), 8, {Sch. 1 para. 74(5)} (with art. 10, Sch. 1 para. 84)

F126S. 51(2A) inserted (15.9.2003) by 2002 c. 40, ss. 248(3), 279, Sch. 17 para. 13 (with s. 249(1)-(3)(6)); S.I. 2003/2093, art. 2(1), Sch. 1 (subject to arts. 3-8 (as amended by S.I. 2003/2332, art. 2))

F130Words in s. 51(6) repealed (1.4.2015) by Bankruptcy and Debt Advice (Scotland) Act 2014 (asp 11), s. 57(2), sch. 4; S.S.I. 2014/261, art. 3 (with arts. 4-7 12) (as amended by S.S.I. 2015/54, art. 2)

F132O.J. L 160, 30.6.2000, p.1.

Modifications etc. (not altering text)

C121Ss. 50-52 applied (with modifications) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

52 Circumstances justifying appointment.S

(1)A receiver may be appointed under section 51(1) by the holder of the floating charge on the occurrence of any event which, by the provisions of the instrument creating the charge, entitles the holder of the charge to make that appointment and, in so far as not otherwise provided for by the instrument, on the occurrence of any of the following events, namely—

(a)the expiry of a period of 21 days after the making of a demand for payment of the whole or any part of the principal sum secured by the charge, without payment having been made;

(b)the expiry of a period of 2 months during the whole of which interest due and payable under the charge has been in arrears;

(c)the making of an order or the passing of a resolution to wind up the company;

(d)the appointment of a receiver by virtue of any other floating charge created by the company.

(2)A receiver may be appointed by the court under section 51(2) on the occurrence of any event which, by the provisions of the instrument creating the floating charge, entitles the holder of the charge to make that appointment and, in so far as not otherwise provided for by the instrument, on the occurrence of any of the following events, namely—

(a)where the court, on the application of the holder of the charge, pronounces itself satisfied that the position of the holder of the charge is likely to be prejudiced if no such appointment is made;

(b)any of the events referred to in paragraphs (a) to (c) of subsection (1).

Modifications etc. (not altering text)

C122Ss. 50-52 applied (with modifications) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

53 Mode of appointment by holder of charge.S

(1)The appointment of a receiver by the holder of the floating charge under section 51(1) shall be by means of [F133an instrument subscribed in accordance with the Requirements of Writing (Scotland) Act 1995] (“the instrument of appointment”), a copy (certified in the prescribed manner to be a correct copy) whereof shall be delivered by or on behalf of the person making the appointment to the registrar of companies for registration within 7 days of its execution and shall be accompanied by a notice in the prescribed form.

(2)If any person without reasonable excuse makes default in complying with the requirements of subsection (1), he is liable to a fine [F134and, for continued contravention, to a daily default fine].

F135(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F136(4)If the receiver is to be appointed by the holders of a series of secured debentures, the instrument of appointment may be executed on behalf of the holders of the floating charge by any person authorised by resolution of the debenture-holders to execute the instrument.]

(5)On receipt of the certified copy of the instrument of appointment in accordance with subsection (1), the registrar shall, on payment of the prescribed fee, enter the particulars of the appointment in the [F137register].

(6)The appointment of a person as a receiver by an instrument of appointment in accordance with subsection (1)—

(a)is of no effect unless it is accepted by that person before the end of the business day next following that on which the instrument of appointment is received by him or on his behalf, and

(b)subject to paragraph (a), is deemed to be made on the day on and at the time at which the instrument of appointment is so received, as evidenced by a written docquet by that person or on his behalf;

and this subsection applies to the appointment of joint receivers subject to such modifications as may be prescribed.

(7)On the appointment of a receiver under this section, the floating charge by virtue of which he was appointed attaches to the property then subject to the charge; and such attachment has effect as if the charge was a fixed security over the property to which it has attached.

Textual Amendments

F133Words in s. 53(1) substituted (1.8.1995) by 1995 c. 7, ss. 14(1), 15(2), Sch. 4 para. 58(a) (with ss. 9(3)(5)(7), 13, 14(3), Sch. 2 para. 3(2))

Modifications etc. (not altering text)

C123S. 53(1) amended (1.7.1999) by 1998 c. 46, s. 125, Sch. 8 para. 23(2)(3); S.I. 1998/3178, art. 2

C124S. 53(1)(2)(4)(6)(7) applied (with modifications) (6.4.2001) by S.S.I. 2001/128, reg. 4, Sch. 2

C125S. 53(6) modified by S.I. 1986/1917, reg. 5

54 Appointment by court.S

(1)Application for the appointment of a receiver by the court under section 51(2) shall be by petition to the court, which shall be served on the company.

(2)On such an application, the court shall, if it thinks fit, issue an interlocutor making the appointment of the receiver.

(3)A copy (certified by the clerk of the court to be a correct copy) of the court’s interlocutor making the appointment shall be delivered by or on behalf of the petitioner to the registrar of companies for registration, accompanied by a notice in the prescribed form, within 7 days of the date of the interlocutor or much longer period as the court may allow.

If any person without reasonable excuse makes default in complying with the requirements of this subsection, he is liable to a fine [F138and, for continued contravention, to a daily default fine].

(4)On receipt of the certified copy interlocutor in accordance with subsection (3), the registrar shall, on payment of the prescribed fee, enter the particulars of the appointment in the [F139register].

(5)The receiver is to be regarded as having been appointed on the date of his being appointed by the court.

(6)On the appointment of a receiver under this section, the floating charge by virtue of which he was appointed attaches to the property then subject to the charge; and such attachment has effect as if the charge were a fixed security over the property to which it has attached.

(7)In making rules of court for the purposes of this section, the Court of Session shall have regard to the need for special provision for cases which appear to the court to require to be dealt with as a matter of urgency.

Textual Amendments

Modifications etc. (not altering text)

C126S. 54(1)(2)(3)(5)(6)(7) applied (with modifications) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C127S. 54(3) amended (1.7.1999) by 1998 c. 46, s. 125, Sch. 8 para. 23(2)(3); S.I. 1998/3178, art. 2

55 Powers of receiver.S

(1)Subject to the next subsection, a receiver has in relation to such part of the property of the company as is attached by the floating charge by virtue of which he was appointed, the powers, if any, given to him by the instrument creating that charge.

(2)In addition, the receiver has under this Chapter the powers as respects that property (in so far as these are not inconsistent with any provision contained in that instrument) which are specified in Schedule 2 to this Act.

(3)Subsections (1) and (2) apply—

(a)subject to the rights of any person who has effectually executed diligence on all or any part of the property of the company prior to the appointment of the receiver, and

(b)subject to the rights of any person who holds over all or any part of the property of the company a fixed security or floating charge having priority, over, or ranking pari passu with, the floating charge by virtue of which the receiver was appointed.

(4)A person dealing with a receiver in good faith and for value is not concerned to enquire whether the receiver is acting within his powers.

Modifications etc. (not altering text)

C128Ss. 55-58 applied (with modifications) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

56 Precedence among receivers.S

(1)Where there are two or more floating charges subsisting over all or any part of the property of the company, a receiver may be appointed under this Chapter by virtue of each such charge; but a receiver appointed by, or on the application of, the holder of a floating charge having priority of ranking over any other floating charge by virtue of which a receiver has been appointed has the powers given to a receiver by section 55 and Schedule 2 to the exclusion of any other receiver.

(2)Where two or more floating charges rank with one another equally, and two or more receivers have been appointed by virtue of such charges, the receivers so appointed are deemed to have been appointed as joint receivers.

(3)Receivers appointed, or deemed to have been appointed, as joint receivers shall act jointly unless the instrument of appointment or respective instruments of appointment otherwise provide.

(4)Subject to subsection (5) below, the powers of a receiver appointed by, or on the application of, the holder of a floating charge are suspended by, and as from the date of, the appointment of a receiver by, or on the application of, the holder of a floating charge having priority of ranking over that charge to such extent as may be necessary to enable the receiver second mentioned to exercise his powers under section 55 and Schedule 2; and any powers so suspended take effect again when the floating charge having priority of ranking ceases to attach to the property then subject to the charge, whether such cessation is by virtue of section 62(6) or otherwise.

(5)The suspension of the powers of a receiver under subsection (4) does not have the effect of requiring him to release any part of the property (including any letters or documents) of the company from his control until he receives from the receiver superseding him a valid indemnity (subject to the limit of the value of such part of the property of the company as is subject to the charge by virtue of which he was appointed) in respect of any expenses, charges and liabilities he may have incurred in the performance of his functions as receiver.

(6)The suspension of the powers of a receiver under subsection (4) does not cause the floating charge by virtue of which he was appointed to cease to attach to the property to which it attached by virtue of section 53(7) or 54(6).

(7)Nothing in this section prevents the same receiver being appointed by virtue of two or more floating charges.

Modifications etc. (not altering text)

C129Ss. 55-58 applied (with modifications) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

57 Agency and liability of receiver for contracts.S

(1)A receiver is deemed to be the agent of the company in relation to such property of the company as is attached by the floating charge by virtue of which he was appointed.

[F140(1A)Without prejudice to subsection (1), a receiver is deemed to be the agent of the company in relation to any contract of employment adopted by him in the carrying out of his functions.]

(2)A receiver (including a receiver whose powers are subsequently suspended under section 56) is personally liable on any contract entered into by him in the performance of his functions, except in so far as the contract otherwise provides, and [F141, to the extent of any qualifying liability,]on any contract of employment adopted by him in the carrying out of those functions.

[F142(2A)For the purposes of subsection (2), a liability under a contract of employment is a qualifying liability if—

(a)it is a liability to pay a sum by way of wages or salary or contribution to an occupational pension scheme,

(b)it is incurred while the receiver is in office, and

(c)it is in respect of services rendered wholly or partly after the adoption of the contract.

(2B)Where a sum payable in respect of a liability which is a qualifying liability for the purposes of subsection (2) is payable in respect of services rendered partly before and partly after the adoption of the contract, liability under that subsection shall only extend to so much of the sum as is payable in respect of services rendered after the adoption of the contract.

(2C)For the purposes of subsections (2A) and (2B)—

(a)wages or salary payable in respect of a period of holiday or absence from work through sickness or other good cause are deemed to be wages or (as the case may be) salary in respect of services rendered in that period, and

(b)a sum payable in lieu of holiday is deemed to be wages or (as the case may be) salary in respect of services rendered in the period by reference to which the holiday entitlement arose.

F143(2D). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

(3)A receiver who is personally liable by virtue of subsection (2) is entitled to be indemnified out of the property in respect of which he was appointed.

(4)Any contract entered into by or on behalf of the company prior to the appointment of a receiver continues in force (subject to its terms) notwithstanding that appointment, but the receiver does not by virtue only of his appointment incur any personal liability on any such contract.

(5)For the purposes of subsection (2), a receiver is not to be taken to have adopted a contract of employment by reason of anything done or omitted to be done within 14 days after his appointment.

(6)This section does not limit any right to indemnity which the receiver would have apart from it, nor limit his liability on contracts entered into or adopted without authority, nor confer any right to indemnity in respect of that liability.

(7)Any contract entered into by a receiver in the performance of his functions continues in force (subject to its terms) although the powers of the receiver are subsequently suspended under section 56.

Textual Amendments

F140S. 57(1A) inserted (24.3.1994 with effect in relation to contracts of employment adopted on or after 15.3.1994) by 1994 c. 7, s. 3(2)(5)

F141Words in s. 57(2) inserted (24.3.1994 with effect in relation to contracts of employment adopted on or after 15.3.1994) by 1994 c. 7, s. 3(3)(5)

F142S. 57(2A)-(2D) inserted (24.3.1994 with effect in relation to contracts of employment adopted on or after 15.3.1994) by 1994 c. 7, s. 3(4)(5)

Modifications etc. (not altering text)

C130Ss. 55-58 applied (with modifications) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

58 Remuneration of receiver.S

(1)The remuneration to be paid to a receiver is to be determined by agreement between the receiver and the holder of the floating charge by virtue of which he was appointed.

(2)Where the remuneration to be paid to the receiver has not been determined under subsection (1), or where it has been so determined but is disputed by any of the persons mentioned in paragraphs (a) to (d) below, it may be fixed instead by the Auditor of the Court of Session on application made to him by—

(a)the receiver;

(b)the holder of any floating charge or fixed security over all or any part of the property of the company;

(c)the company; or

(d)the liquidator of the company.

(3)Where the receiver has been paid or has retained for his remuneration for any period before the remuneration has been fixed by the Auditor of the Court of Session under subsection (2) any amount in excess of the remuneration so fixed for that period, the receiver or his personal representatives shall account for the excess.

Modifications etc. (not altering text)

C131Ss. 55-58 applied (with modifications) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

59 Priority of debts.S

(1)Where a receiver is appointed and the company is not at the time of the appointment in course of being wound up, the debts which fall under subsection (2) of this section shall be paid out of any assets coming to the hands of the receiver in priority to any claim for principal or interest by the holder of the floating charge by virtue of which the receiver was appointed.

(2)Debts falling under this subsection are preferential debts (within the meaning given by section 386 in Part XII) which, by the end of a period of 6 months after advertisement by the receiver for claims in the Edinburgh Gazette and in a newspaper circulating in the district where the company carries on business either—

(i)have been intimated to him, or

(ii)have become known to him.

(3)Any payments made under this section shall be recouped as far as may be out of the assets of the company available for payment of ordinary creditors.

60 Distribution of moneys.S

(1)Subject to the next section, and to the rights of any of the following categories of persons (which rights shall, except to the extent otherwise provided in any instrument, have the following order of priority), namely—

(a)the holder of any fixed security which is over property subject to the floating charge and which ranks prior to, or pari passu with, the floating charge;

(b)all persons who have effectually executed diligence on any part of the property of the company which is subject to the charge by virtue of which the receiver was appointed;

(c)creditors in respect of all liabilities, charges and expenses incurred by or on behalf of the receiver;

(d)the receiver in respect of his liabilities, expenses and remuneration, and any indemnity to which he is entitled out of the property of the company; and

(e)the preferential creditors entitled to payment under section 59,

the receiver shall pay moneys received by him to the holder of the floating charge by virtue of which the receiver was appointed in or towards satisfaction of the debt secured by the floating charge.

(2)Any balance of moneys remaining after the provisions of subsection (1) and section 61 below have been satisfied shall be paid in accordance with their respective rights and interests to the following persons, as the case may require—

(a)any other receiver;

(b)the holder of a fixed security which is over property subject to the floating charge;

(c)the company or its liquidator, as the case may be.

(3)Where any question arises as to the person entitled to a payment under this section, or where a receipt or a discharge of a security cannot be obtained in respect of any such payment, the receiver shall consign the amount of such payment in any joint stock bank of issue in Scotland in name of the Accountant of Court for behoof of the person or persons entitled thereto.

61 Disposal of interest in property.S

(1)Where the receiver sells or disposes, or is desirous of selling or disposing, or any property or interest in property of the company which is subject to the floating charge by virtue of which the receiver was appointed and which is—

(a)subject to any security or interest of, or burden or encumbrance in favour of, a creditor the ranking of which is prior to, or pari passu with, or postponed to the floating charge, or

(b)property or an interest in property affected or attached by effectual diligence executed by any person,

and the receiver is unable to obtain the consent of such creditor or, as the case may be, such person to such a sale or disposal, the receiver may apply to the court for authority to sell or dispose of the property or interest in property free of such security, interest, burden, encumbrance or diligence.

[F144(1A)For the purposes of subsection (1) above, an inhibition which takes effect after the creation of the floating charge by virtue of which the receiver was appointed is not an effectual diligence.]

(2)Subject to the next subsection, on such an application the court may, if it thinks fit, authorise the sale or disposal of the property or interest in question free of such security, interest, burden, encumbrance or diligence, and such authorisation may be on such terms or conditions as the court thinks fit.

(3)In the case of an application where a fixed security over the property or interest in question which ranks prior to the floating charge has not been met or provided for in full, the court shall not authorise the sale or disposal of the property or interest in question unless it is satisfied that the sale or disposal would be like to provide a more advantageous realisation of the company’s assets than would otherwise be effected.

(4)It shall be a condition of an authorisation to which subsection (3) applies that—

(a)the net proceeds of the disposal, and

(b)where those proceeds are less than such amount as may be determined by the court to be the net amount which would be realised on a sale of the property or interest in the open market by a willing seller, such sums as may be required to make good the deficiency,

shall be applied towards discharging the sums secured by the fixed security.

(5)Where a condition imposed in pursuance of subsection (4) relates to two or more such fixed securities, that condition shall require the net proceeds of the disposal and, where paragraph (b) of that subsection applies, the sums mentioned in that paragraph to be applied towards discharging the sums secured by those fixed securities in the order of their priorities.

(6)A copy of an authorisation under subsection (2) F145. . . shall, within 14 days of the granting of the authorisation, be sent by the receiver to the registrar of companies.

(7)If the receiver without reasonable excuse fails to comply with subsection (6), he is liable to a fine and, for continued contravention, to a daily default fine.

(8)Where any sale or disposal is effected in accordance with the authorisation of the court under subsection (2), the receiver shall grant to the purchaser or disponee an appropriate document of transfer or conveyance of the property or interest in question, and that document has the effect, or, where recording, intimation or registration of that document is a legal requirement for completion of title to the property or interest, then that recording, intimation or registration (as the case may be) has the effect, of—

(a)disencumbering the property or interest of the security, interest, burden or encumbrance affecting it, and

(b)freeing the property or interest from the diligence executed upon it.

(9)Nothing in this section prejudices the right of any creditor of the company to rank for his debt in the winding up of the company.

Textual Amendments

F145Words in s. 61(6) omitted (1.10.2009) by virtue of The Companies Act 2006 (Consequential Amendments, Transitional Provisions and Savings) Order 2009, (S.I. 2009/1941) arts. 2(1), 8, {Sch. 1 para. 74(6)} (with art. 10, Sch. 1 para. 84)

Modifications etc. (not altering text)

C137S. 61 excluded (25.4.1991) by Companies Act 1989 (c. 40), ss. 154, 155, 175(3)(b); S.I. 1991/878, art. 2, Sch. .

C138S. 61 excluded (15.8.1995) by S.I. 1995/2049, reg. 21(4)(b)

C139S. 61 applied (with modifications) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C140S. 61(6) amended (1.7.1999) by 1998 c. 46, s. 125, Sch. 8 para. 23(2)(3); S.I. 1998/3178, art. 2

62 Cessation of appointment of receiver.S

(1)A receiver may be removed from office by the court under subsection (3) below and may resign his office by giving notice of his resignation in the prescribed manner to such persons as may be prescribed.

(2)A receiver shall vacate office if he ceases to be qualified to act as an insolvency practitioner in relation to the company.

(3)Subject to the next subsection, a receiver may, on application to the court by the holder of the floating charge by virtue of which he was appointed, be removed by the court on cause shown.

(4)Where at any time a receiver vacates office—

(a)his remuneration and any expenses properly incurred by him, and

(b)any indemnity to which he is entitled out of the property of the company,

shall be paid out of the property of the company which is subject to the floating charge and shall have priority as provided for in section 60(1).

(5)When a receiver ceases to act as such otherwise than by death he shall, and, when a receiver is removed by the court, the holder of the floating charge by virtue of which he was appointed shall, within 14 days of the cessation or removal (as the case may be) given the registrar of companies notice to that effect, and the registrar shall enter the notice in the [F146register].

If the receiver or the holder of the floating charge (as the case may require) makes default in complying with the requirements of this subsection, he is liable to a fine and, for continued contravention, to a daily default fine.

(6)If by the expiry of a period of one month following upon the removal of the receiver or his ceasing to act as such no other receiver has been appointed, the floating charge by virtue of which the receiver was appointed—

(a)thereupon ceases to attach to the property then subject to the charge, and

(b)again subsists as a floating charge;

and for the purposes of calculating the period of one month under this subsection no account shall be taken of any period during which [F147the company is in administration,] under Part II of this Act F148. . . .

Textual Amendments

Modifications etc. (not altering text)

C141S. 62 applied (with modifications) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C142S. 62(5) (so far as relating to the giving of notice) amended (1.7.1999) by 1998 c. 46, s. 125, Sch. 8 para. 23(2)(3); S.I. 1998/3178, art. 2

63 Powers of court.S

(1)The court on the application of—

(a)the holder of a floating charge by virtue of which a receiver was appointed, or

(b)a receiver appointed under section 51,

may give directions to the receiver in respect of any matter arising in connection with the performance by him of his functions.

(2)Where the appointment of a person as a receiver by the holder of a floating charge is discovered to be invalid (whether by virtue of the invalidity of the instrument or otherwise), the court may order the holder of the floating charge to indemnify the person appointed against any liability which arises solely by reason of the invalidity of the appointment.

Modifications etc. (not altering text)

C143S. 63 amended (1.12.2001) by 2000 c. 8, s. 363(2); S.I. 2001/3538, art. 2(1)

C144Ss. 63-66 applied (with modifications) (6.4.2001) by S.S.I. 2001/128, reg. 4, Sch. 2, Sch. 3

64 Notification that receiver appointed.S

[F149(1)Where a receiver has been appointed—

(a)every invoice, order for goods or services, business letter or order form (whether in hard copy, electronic or any other form) issued by or on behalf of the company or the receiver or the liquidator of the company; and

(b)all the company's websites,

must contain a statement that a receiver has been appointed.]

(2)If default is made in complying with the requirements of this section, the company and any of the following persons who knowingly and wilfully authorises or permits the default, namely any officer of the company, any liquidator of the company and any receiver, is liable to a fine.

Textual Amendments

Modifications etc. (not altering text)

C145Ss. 63-66 applied (with modifications) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

65 Information to be given by receiver.S

(1)Where a receiver is appointed, he shall—

(a)forthwith send to the company and publish notice of his appointment, and

(b)within 28 days after his appointment, unless the court otherwise directs, send such notice to all the creditors of the company (so far as he is aware of their addresses).

(2)This section and the next do not apply in relation to the appointment of a receiver to act—

(a)with an existing receiver, or

(b)in place of a receiver who has died or ceased to act,

except that, where they apply to a receiver who dies or ceases to act before they have been fully complied with, the references in this section and the next to the receiver include (subject to subsection (3) of this section) his successor and any continuing receiver.

(3)If the company is being wound up, this section and the next apply notwithstanding that the receiver and the liquidator are the same person, but with any necessary modifications arising from that fact.

(4)If a person without reasonable excuse fails to comply with this section, he is liable to a fine and, for continued contravention, to a daily default fine.

Modifications etc. (not altering text)

C146Ss. 63-66 applied (with modifications) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

66 Company’s statement of affairs.S

(1)Where a receiver of a company is appointed, the receiver shall forthwith require some or all of the persons mentioned in subsection (3) below to make out and submit to him a statement in the prescribed form as to the affairs of the company.

(2)A statement submitted under this section shall be [F150contain a statutory declaration] by the persons required to submit it and shall show—

(a)particulars of the company’s assets, debts and liabilities;

(b)the names and addresses of its creditors;

(c)the securities held by them respectively;

(d)the dates when the securities were respectively given; and

(e)such further or other information as may be prescribed.

(3)The persons referred to in subsection (1) are—

(a)those who are or have been officers of the company;

(b)those who have taken part in the company’s formation at any time within one year before the date of the appointment of the receiver;

(c)those who are in the company’s employment or have been in its employment within that year, and are in the receiver’s opinion capable of giving the information required;

(d)those who are or have been within that year officers of or in the employment of a company which is, or within that year was, an officer of the company.

In this subsection “employment” includes employment under a contract for services.

(4)Where any persons are required under this section to submit a statement of affairs to the receiver they shall do so (subject to the next subsection) before the end of the period of 21 days beginning with the day after that on which the prescribed notice of the requirement is given to them by the receiver.

(5)The receiver, if he thinks fit, may—

(a)at any time release a person from an obligation imposed on him under subsection (1) or (2), or

(b)either when giving the notice mentioned in subsection (4) or subsequently extend the period so mentioned,

and where the receiver has refused to exercise a power conferred by this subsection, the court, if it thinks fit, may exercise it.

(6)If a person without reasonable excuse fails to comply with any obligation imposed under this section, he is liable to a fine and, for continued contravention to a daily default fine.

Textual Amendments

F150Words in s. 66(2) substituted (coming into force in accordance with art. 1(3)(4) of the amending S.S.I.) by The Public Services Reform (Insolvency) (Scotland) Order 2016 (S.S.I. 2016/141), art. 4 (with arts. 14, 15)

Modifications etc. (not altering text)

C147Ss. 63-66 applied (with modifications) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

67 Report by receiver.S

(1)Where a receiver is appointed under section 51, he shall within 3 months (or such longer period as the court may allow) after his appointment, send to the registrar of companies, to the holder of the floating charge by virtue of which he was appointed and to any trustees for secured creditors of the company and (so far as he is aware of their addresses) to all such creditors [F151, other than opted-out creditors,] a report as to the following matters, namely—

(a)the events leading up to his appointment, so far as he is aware of them;

(b)the disposal or proposed disposal by him of any property of the company and the carrying on or proposed carrying on by him of any business of the company;

(c)the amounts of principal and interest payable to the holder of the floating charge by virtue of which he was appointed and the amounts payable to preferential creditors; and

(d)the amount (if any) likely to be available for the payment of other creditors.

(2)The receiver shall also, within 3 months (or such longer period as the court may allow) after his appointment, either—

(a)send a copy of the report (so far as he is aware of their addresses) to all unsecured creditors of the company [F152, other than opted-out creditors] , or

(b)publish in the prescribed manner a notice stating an address to which unsecured creditors of the company should write for copies of the report to be sent to them free of charge,

[F153and (in either case), unless the court otherwise directs, lay a copy of the report before a meeting of the company’s unsecured creditors summoned for the purpose on not less than 14 days’ notice.]

(3)[F154The court shall not give a direction under subsection (2) unless—

(a)the report states the intention of the receiver to apply for the direction, and

(b)a copy of the report is sent to the persons mentioned in paragraph (a) of that subsection, or a notice is published as mentioned in paragraph (b) of that subsection, not less than 14 days before the hearing of the application.]

(4)Where the company has gone or goes into liquidation, the receiver—

(a)shall, within 7 days after his compliance with subsection (1) or, if later, the nomination or appointment of the liquidator, send a copy of the report to the liquidator, and

(b)where he does so within the time limited for compliance with subsection (2), is not required to comply with that subsection.

(5)A report under this section shall include a summary of the statement of affairs made out and submitted under section 66 and of his comments (if any) on it.

(6)Nothing in this section shall be taken as requiring any such report to include any information the disclosure of which would seriously prejudice the carrying out by the receiver of his functions.

(7)Section 65(2) applies for the purposes of this section also.

(8)If a person without reasonable excuse fails to comply with this section, he is liable to a fine and, for continued contravention, to a daily default fine.

(9)In this section “secured creditor”, in relation to a company, means a creditor of the company who holds in respect of his debt a security over property of the company, and “unsecured creditor” shall be construed accordingly.

Textual Amendments

Modifications etc. (not altering text)

C148S. 67 applied (with modifications) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C149S. 67(1) amended (1.7.1999) by 1998 c. 46, s. 125, Sch. 8 para. 23(2)(3); S.I. 1998/3178, art. 2

S. 67(1) amended (1.12.2001) by 2000 c. 8, s. 363(4); S.I. 2001/3538, art. 2(1)

68 Committee of creditorsS

(1)[F155Where a meeting of creditors is summoned under section 67, the meeting may, if it thinks fit] [F155Where a receiver has sent or published a report as mentioned in section 67(2) the company's unsecured creditors may, in accordance with the rules] , establish a committee (“the creditors’ committee”) to exercise the functions conferred on it by or under this Act.

(2)If such a committee is established, the committee may on giving not less than 7 days’ notice require the receiver to attend before it at any reasonable time and furnish it with such information relating to the carrying out by him of his functions as it may reasonably require.

Textual Amendments

Modifications etc. (not altering text)

C150S. 68 amended (1.12.2001) by 2000 c. 8, s. 363(5)(b); S.I. 2001/3538, art. 2(1)

C151S. 68 applied (with modifications) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

69 Enforcement of receiver’s duty to make returns, etc.S

(1)If any receiver—

(a)having made default in filing, delivering or making any return, account or other document, or in giving any notice, which a receiver is by law required to file, deliver, make or give, fails to make good the default within 14 days after the service on him of a notice requiring him to do so; or

(b)has, after being required at any time by the liquidator of the company so to do, failed to render proper accounts of his receipts and payments and to vouch the same and to pay over to the liquidator the amount properly payable to him,

the court may, on an application made for the purpose, make an order directing the receiver to make good the default within such time as may be specified in the order.

(2)In the case of any such default as is mentioned in subsection (1)(a), an application for the purposes of this section may be made by any member or creditor of the company or by the registrar of companies; and, in the case of any such default as is mentioned in subsection (1)(b), the application shall be made by the liquidator; and, in either case, the order may provide that all expenses of and incidental to the application shall be borne by the receiver.

(3)Nothing in this section prejudices the operation of any enactments imposing penalties on receivers in respect of any such default as is mentioned in subsection (1).

Modifications etc. (not altering text)

C152S. 69 applied (with modifications) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C153S. 69(1)(a) amended (1.12.2001) by 2000 c. 8, s. 363(3); S.I. 2001/3538, art. 2(1)

C154S. 69(2) amended (1.7.1999) by 1998 c. 46, s. 125, Sch. 8 para. 23(2)(3); S.I. 1998/3178, art. 2

70 Interpretation for Chapter II.S

(1)In this Chapter, unless the contrary intention appears, the following expressions have the following meanings respectively assigned to them—

(2)Where a floating charge, secured debenture or series of secured debentures has been created by the company, then, except where the context otherwise requires, any reference in this Chapter to the holder of the floating charge shall—

(a)where the floating charge, secured debenture or series of secured debentures provides for a receiver to be appointed by any person or body, be construed as a reference to that person or body;

(b)where, in the case of a series of secured debentures, no such provision has been made therein but—

(i)there are trustees acting for the debenture-holders under and in accordance with a trust deed, be construed as a reference to those trustees, and

(ii)where no such trustees are acting, be construed as a reference to—

(aa)a majority in nominal value of those present or represented by proxy and voting at a meeting of debenture-holders at which the holders of at least one-third in nominal value of the outstanding debentures of the series are present or so represented, or

(bb)where no such meeting is held, the holders of at least one-half in nominal value of the outstanding debentures of the series.

(3)Any reference in this Chapter to a floating charge, secured debenture, series of secured debentures or instrument creating a charge includes, except where the context otherwise requires, a reference to that floating charge, debenture, series of debentures or instrument as varied by any instrument.

(4)References in this Chapter to the instrument by which a floating charge was created are, in the case of a floating charge created by words in a bond or other written acknowledgement, references to the bond or, as the case may be, the other written acknowledgement.

Textual Amendments

F156Words in s. 70(1) substituted (1.10.2009) by The Companies Act 2006 (Consequential Amendments, Transitional Provisions and Savings) Order 2009, (S.I. 2009/1941) arts. 2(1), 8, {Sch. 1 para. 74(7)} (with art. 10, Sch. 1 para. 84)

F158Words in s. 70(1) substituted (1.10.2009) by The Companies Act 2006 (Consequential Amendments, Transitional Provisions and Savings) Order 2009, (S.I. 2009/1941) arts. 2(1), 8, {Sch. 1 para. 74(7)} (with art. 10, Sch. 1 para. 84)

Modifications etc. (not altering text)

C155S. 70 applied (with modifications) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

Marginal Citations

71 Prescription of forms, etc.; regulations.S

(1)The notice referred to in section 62(5), and the notice referred to in section 65(1)(a) shall be in such form as may be prescribed.

(2)Any power conferred by this Chapter on the Secretary of State to make regulations is exercisable by statutory instrument; and a statutory instrument made in the exercise of the power so conferred to prescribe a fee is subject to annulment in pursuance of a resolution of either House of Parliament.

Modifications etc. (not altering text)

C156S. 71 applied (with modifications) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

Chapter IIIE+W+S Receivers’ Powers in Great Britain as a Whole

72 Cross-border operation of receivership provisions.E+W+S

(1)A receiver appointed under the law of either part of Great Britain in respect of the whole or any part of any property or undertaking of a company and in consequence of the company having created a charge which, as created, was a floating charge may exercise his powers in the other part of Great Britain so far as their exercise is not inconsistent with the law applicable there.

(2)In subsection (1) “receiver” includes a manager and a person who is appointed both receiver and manager.

[F159CHAPTER IVE+W+S PROHIBITION OF APPOINTMENT OF ADMINISTRATIVE RECEIVER

Textual Amendments

F159Pt. III Ch. IV (ss. 72A-72H) inserted (18.3.2003 for the purpose of giving effect to the insertion of s. 72H(2)-(5) and otherwise 15.9.2003) by 2002 c. 40, ss. 250(1), 279 (with s. 249(6)); S.I. 2003/765, art. 2, Sch.; S.I. 2003/2093, art. 2(1), Sch. 1 (subject to arts. 3-8 (as amended by S.I. 2003/2332, art. 2))

72A Floating charge holder not to appoint administrative receiverE+W+S

(1)The holder of a qualifying floating charge in respect of a company’s property may not appoint an administrative receiver of the company.

(2)In Scotland, the holder of a qualifying floating charge in respect of a company’s property may not appoint or apply to the court for the appointment of a receiver who on appointment would be an administrative receiver of property of the company.

(3)In subsections (1) and (2)—

(4)This section applies—

(a)to a floating charge created on or after a date appointed by the Secretary of State by order made by statutory instrument, and

(b)in spite of any provision of an agreement or instrument which purports to empower a person to appoint an administrative receiver (by whatever name).

(5)An order under subsection (4)(a) may—

(a)make provision which applies generally or only for a specified purpose;

(b)make different provision for different purposes;

(c)make transitional provision.

(6)This section is subject to the exceptions specified in [F160sections 72B to 72GA] .

Subordinate Legislation Made

P1S. 72A(4)(a) power exercised: 15.9.2003 appointed for specified purposes by The Insolvency Act 1986, Section 72A (Appointed Date) Order 2003 (S.I. 2003/2095), art. 2

Textual Amendments

72B First exception: capital marketE+W+S

(1)Section 72A does not prevent the appointment of an administrative receiver in pursuance of an agreement which is or forms part of a capital market arrangement if—

(a)a party incurs or, when the agreement was entered into was expected to incur, a debt of at least £50 million under the arrangement, and

(b)the arrangement involves the issue of a capital market investment.

(2)In subsection (1)—

72C Second exception: public-private partnershipE+W+S

(1)Section 72A does not prevent the appointment of an administrative receiver of a project company of a project which—

(a)is a public-private partnership project, and

(b)includes step-in rights.

(2)In this section “public-private partnership project” means a project—

(a)the resources for which are provided partly by one or more public bodies and partly by one or more private persons, or

(b)which is designed wholly or mainly for the purpose of assisting a public body to discharge a function.

(3)In this section—

72D Third exception: utilitiesE+W+S

(1)Section 72A does not prevent the appointment of an administrative receiver of a project company of a project which—

(a)is a utility project, and

(b)includes step-in rights.

(2)In this section—

(a)utility project” means a project designed wholly or mainly for the purpose of a regulated business,

(b)regulated business” means a business of a kind listed in paragraph 10 of Schedule 2A,

(c)step-in rights” has the meaning given by paragraph 6 of that Schedule, and

(d)project company” has the meaning given by paragraph 7 of that Schedule.

[F16172DAException in respect of urban regeneration projectsE+W+S

(1)Section 72A does not prevent the appointment of an administrative receiver of a project company of a project which—

(a)is designed wholly or mainly to develop land which at the commencement of the project is wholly or partly in a designated disadvantaged area outside Northern Ireland, and

(b)includes step-in rights.

(2)In subsection (1) “develop” means to carry out—

(a)building operations,

(b)any operation for the removal of substances or waste from land and the levelling of the surface of the land, or

(c)engineering operations in connection with the activities mentioned in paragraph (a) or (b).

(3)In this section—

72E Fourth exception: project financeE+W+S

(1)Section 72A does not prevent the appointment of an administrative receiver of a project company of a project which—

(a)is a financed project, and

(b)includes step-in rights.

(2)In this section—

(a)a project is “financed” if under an agreement relating to the project a project company incurs, or when the agreement is entered into is expected to incur, a debt of at least £50 million for the purposes of carrying out the project,

(b)project company” has the meaning given by paragraph 7 of Schedule 2A, and

(c)step-in rights” has the meaning given by paragraph 6 of that Schedule.

72F Fifth exception: financial marketE+W+S

Section 72A does not prevent the appointment of an administrative receiver of a company by virtue of—

(a)a market charge within the meaning of section 173 of the Companies Act 1989 (c. 40),

(b)a system-charge within the meaning of the Financial Markets and Insolvency Regulations 1996 (S.I. 1996/1469),

(c)a collateral security charge within the meaning of the Financial Markets and Insolvency (Settlement Finality) Regulations 1999 (S.I. 1999/2979).

72G Sixth exception: [F162social landlords]E+W+S

Section 72A does not prevent the appointment of an administrative receiver of a company which is [F163

(a)a private registered provider of social housing, or

(b)] registered as a social landlord under Part I of the Housing Act 1996 (c. 52) or under [F164Part 2 of the Housing (Scotland) Act 2010 (asp 17)].

[F16572GAException in relation to protected railway companies etc.E+W+S

Section 72A does not prevent the appointment of an administrative receiver of—

(a)a company holding an appointment under Chapter I of Part II of the Water Industry Act 1991,

(b)a protected railway company within the meaning of section 59 of the Railways Act 1993(including that section as it has effect by virtue of section 19 of the Channel Tunnel Rail Link Act 1996, or

(c)a licence company within the meaning of section 26 of the Transport Act 2000.]

F16672H Sections 72A to 72G: supplementaryE+W+S

(1)Schedule 2A (which supplements sections 72B to 72G) shall have effect.

(2)The Secretary of State may by order—

(a)insert into this Act provision creating an additional exception to section 72A(1) or (2);

(b)provide for a provision of this Act which creates an exception to section 72A(1) or (2) to cease to have effect;

(c)amend section 72A in consequence of provision made under paragraph (a) or (b);

(d)amend any of sections 72B to 72G;

(e)amend Schedule 2A.

(3)An order under subsection (2) must be made by statutory instrument.

(4)An order under subsection (2) may make—

(a)provision which applies generally or only for a specified purpose;

(b)different provision for different purposes;

(c)consequential or supplementary provision;

(d)transitional provision.

(5)An order under subsection (2)—

(a)in the case of an order under subsection (2)(e), shall be subject to annulment in pursuance of a resolution of either House of Parliament,

(b)in the case of an order under subsection (2)(d) varying the sum specified in section 72B(1)(a) or 72E(2)(a) (whether or not the order also makes consequential or transitional provision), shall be subject to annulment in pursuance of a resolution of either House of Parliament, and

(c)in the case of any other order under subsection (2)(a) to (d), may not be made unless a draft has been laid before and approved by resolution of each House of Parliament.]

Textual Amendments

F166Pt. III Ch. IV (ss. 72A-72H) inserted (18.3.2003 for the purpose of giving effect to the insertion of s. 72H(2)-(5) and otherwise 15.9.2003) by 2002 c. 40, ss. 250(1), 279 (with s. 249(6)); S.I. 2003/765, art. 2, Sch.; S.I. 2003/2093, art. 2(1), Sch. 1 (subject to arts. 3-8 (as amended by S.I. 2003/2332, art. 2))

Part IVU.K. Winding Up of Companies Registered under the Companies Acts

Modifications etc. (not altering text)

C157Pt. IV (ss. 73-219) modified by Company Directors Disqualification Act 1986 (c. 46, SIF 27), ss. 21(2), 25

Pt. IV modified by Criminal Justice (Scotland) Act 1987 (c. 41, SIF 39:1), ss. 30(6), 35(4), 47(4)(a)

Pt. IV modified by Criminal Justice Act 1988 (c. 33, SIF 39:1), ss. 86(5), 123, Sch. 8 para. 16

Pt. IV modified (1.2.1993) by Friendly Societies Act 1992 (c. 40), s. 23, Sch. 10 para. 1(a) (with ss. 7(5), 93(4)); S.I. 1993/16, art. 2, Sch.3

Pt. IV modified (E.W.S.) (31.3.1996) by 1995 c. 20, s. 110(1), Sch. 4 para. 3(4); S.I. 1996/517, art. 3(2) (subject to transitional provisions and savings in arts. 4-6, Sch. 2) (which modifying Act was itself repealed (1.4.1996) by 1995 c. 40, ss. 6(1), 7(2), Sch. 5 (with Sch. 3, paras. 3, 16))

Pt. IV modified (1.4.1996) by 1995 c. 43, ss. 44, 50(2), Sch. 2 para. 3(4)

Pt. IV modified (24.3.2003) by 2002 c. 29, ss. 426(8), 458(1)(3); S.I. 2003/333, art. 2, Sch. (subject to arts. 3-13 (as amended by S.I. 2003/531, arts. 3, 4))

C158Pt. IV (ss. 73-219) extended (with modifications) by Building Societies Act 1986 (c 53, SIF 16), ss. 54(3)(a)(5)(a), 90, 126(3), Sch. 15

C159Pts. I-VII (ss. 1-251) applied (with modifications) by S.I. 1989/1276, arts. 2, 3

Pt. IV (ss. 73-219) applied (with modifications) (1.2.1993) by Friendly Societies Act 1992 (c. 40), ss. 21(1), 22, 23, Sch. 10 para. 1(a) (with ss. 7(5), 93(4)); S.I. 1993/16, art. 2, Sch. 3

Pt. IV applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 8(4)(5)(8)(9) (as amended (1.7.2005) by S.I. 2005/1516, art. 4)

Pt. IV applied (1.12.1994) by S.I. 1994/2421, art. 10(2)(3)(6), Sch. 4 Pt. II, Sch. 7 (as amended (1.7.2005) by S.I. 2005/1516, art. 5)

C161Pts. 1-4, 6, 7 applied to limited liability partnerships (with modifications) (E.W.S.) (6.4.2001) by S.I. 2001/1090, reg. 5, Schs. 3, 4 (as amended (4.3.2004) by S.I. 2004/355, art. 10 and (1.10.2005) by S.I. 2005/1989, reg. 3, Sch. 2 (with reg. 4))

C162Pt. IV: power to apply or incorporate conferred (6.4.2001) by 2000 c. 12, s. 14(1); S.I. 2000/3316, art. 2

Pt. IV: power to apply (with modifications) conferred (20.11.2003) by Health and Social Care (Community Health and Standards) Act 2003 (c. 43), ss. 25(6), 26

Pt. 4: power to apply (with modifications) conferred (E.W.) (1.3.2007) by National Health Service Act 2006 (c. 41), ss. 54(8), 55, 277

C163First Group of Parts (Pts. 1-7) applied (with modifications) (15.12.2006) by The Banks (Former Authorised Institutions) (Insolvency) Order 2006 (S.I. 2006/3107), art. 3, Sch.

C164Pt. IV amended (1.12.2001) by 2000 c. 8, s. 371(2)(b); S.I. 2001/3538, art. 2(1)

C165Pt. IV (except s. 185) modified (S.) (prosp.) by Bankruptcy and Diligence etc. (Scotland) Act 2007 (asp 3), ss. 45(5), 227(3) (subject to s. 45(1) and with ss. 45(6), 223)

Chapter IE+W+S Preliminary

[F167Introductory]E+W+S

Textual Amendments

F167S. 73 and cross-heading substituted (1.10.2009) by The Companies Act 2006 (Consequential Amendments, Transitional Provisions and Savings) Order 2009, (S.I. 2009/1941) arts. 2(1), 8, {Sch. 1 para. 75(2)} (with art. 10, Sch. 1 para. 84)

[F16873Scheme of this PartE+W+S

(1)This Part applies to the winding up of a company registered under the Companies Act 2006 in England and Wales or Scotland.

(2)The winding up may be either—

(a)voluntary (see Chapters 2 to 5), or

(b)by the court (see Chapter 6).

(3)This Chapter and Chapters 7 to 10 relate to winding up generally, except where otherwise stated.]

Textual Amendments

F168S. 73 and cross-heading substituted (1.10.2009) by The Companies Act 2006 (Consequential Amendments, Transitional Provisions and Savings) Order 2009, (S.I. 2009/1941) arts. 2(1), 8, {Sch. 1 para. 75(2)} (with art. 10, Sch. 1 para. 84)

ContributoriesE+W+S

74 Liability as contributories of present and past members.E+W+S

(1)When a company is wound up, every present and past member is liable to contribute to its assets to any amount sufficient for payment of its debts and liabilities, and the expenses of the winding up, and for the adjustment of the rights of the contributories among themselves.

(2)This is subject as follows—

(a)a past member is not liable to contribute if he has ceased to be a member for one year or more before the commencement of the winding up;

(b)a past member is not liable to contribute in respect of any debt or liability of the company contracted after he ceased to be a member;

(c)a past member is not liable to contribute, unless it appears to the court that the existing members are unable to satisfy the contributions required to be made by them F169. . . ;

(d)in the case of a company limited by shares, no contribution is required from any member exceeding the amount (if any) unpaid on the shares in respect of which he is liable as a present or past member;

(e)nothing in [F170the Companies Acts] or this Act invalidates any provision contained in a policy of insurance or other contract whereby the liability of individual members on the policy or contract is restricted, or whereby the funds of the company are alone made liable in respect of the policy or contract;

(f)a sum due to any member of the company (in his character of a member) by way of dividends, profits or otherwise is not deemed to be a debt of the company, payable to that member in a case of competition between himself and any other creditor not a member of the company, but any such sum may be taken into account for the purpose of the final adjustment of the rights of the contributories among themselves.

(3)In the case of a company limited by guarantee, no contribution is required from any member exceeding the amount undertaken to be contributed by him to the company’s assets in the event of its being wound up; but if it is a company with a share capital, every member of it is liable (in addition to the amount so undertaken to be contributed to the assets), to contribute to the extent of any sums unpaid on shares held by him.

Textual Amendments

F169Words in s. 74(2)(c) omitted (1.10.2009) by virtue of The Companies Act 2006 (Consequential Amendments, Transitional Provisions and Savings) Order 2009, (S.I. 2009/1941) arts. 2(1), 8, {Sch. 1 para. 75(3)(a)} (with art. 10, Sch. 1 para. 84)

F170Words in s. 74(2)(e) substituted (1.10.2009) by The Companies Act 2006 (Consequential Amendments, Transitional Provisions and Savings) Order 2009, (S.I. 2009/1941) arts. 2(1), 8, {Sch. 1 para. 75(3)(b)} (with art. 10, Sch. 1 para. 84)

75 Directors, etc. with unlimited liability.E+W+S

F171. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F171S. 75 omitted (1.10.2009) by virtue of The Companies Act 2006 (Consequential Amendments, Transitional Provisions and Savings) Order 2009, (S.I. 2009/1941) arts. 2(1), 8, {Sch. 1 para. 75(4)} (with arts. 9, 10, Sch. 1 para. 84)

76 Liability of past directors and shareholders.E+W+S

(1)This section applies where a company is being wound up and—

(a)it has under [F172Chapter 5 of Part 18 of the Companies Act 2006 (acquisition by limited company of its own shares: redemption or purchase by private company out of capital)] made a payment out of capital in respect of the redemption or purchase of any of its own shares (the payment being referred to below as “the relevant payment”), and

(b)the aggregate amount of the company’s assets and the amounts paid by way of contribution to its assets (apart from this section) is not sufficient for payment of its debts and liabilities, and the expenses of the winding up.

(2)If the winding up commenced within one year of the date on which the relevant payment was made, then—

(a)the person from whom the shares were redeemed or purchased, and

(b)the directors who signed the [F173statement] made in accordance with [F174section 714(1) to (3) of the Companies Act 2006] for purposes of the redemption or purchase (except a director who shows that he had reasonable grounds for forming the opinion set out in the [F173statement],

are, so as to enable that insufficiency to be met, liable to contribute to the following extent to the company’s assets.

(3)A person from whom any of the shares were redeemed or purchased is liable to contribute an amount not exceeding so much of the relevant payment as was made by the company in respect of his shares; and the directors are jointly and severally liable with that person to contribute that amount.

(4)A person who has contributed any amount to the assets in pursuance of this section may apply to the court for an order directing any other person jointly and severally liable in respect of that amount to pay him such amount as the court thinks just and equitable.

(5)[F175Section 74 does not apply] in relation to liability accruing by virtue of this section.

(6)F176. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F172Words in s. 76(1)(a) substituted (1.10.2009) by The Companies Act 2006 (Consequential Amendments, Transitional Provisions and Savings) Order 2009, (S.I. 2009/1941) arts. 2(1), 8, {Sch. 1 para. 75(5)(a)} (with art. 10, Sch. 1 para. 84)

F174Words in s. 76(2)(b) substituted (1.10.2009) by The Companies Act 2006 (Consequential Amendments, Transitional Provisions and Savings) Order 2009, (S.I. 2009/1941) arts. 2(1), 8, {Sch. 1 para. 75(5)(b)} (with art. 10, Sch. 1 para. 84)

F175Words in s. 76(5) substituted (1.10.2009) by The Companies Act 2006 (Consequential Amendments, Transitional Provisions and Savings) Order 2009, (S.I. 2009/1941) arts. 2(1), 8, {Sch. 1 para. 75(5)(c)} (with art. 10, Sch. 1 para. 84)

F176S. 76(6) omitted (1.10.2009) by virtue of The Companies Act 2006 (Consequential Amendments, Transitional Provisions and Savings) Order 2009, (S.I. 2009/1941) arts. 2(1), 8, {Sch. 1 para. 75(5)(d)} (with art. 10, Sch. 1 para. 84)

77 Limited company formerly unlimited.E+W+S

(1)This section applies in the case of a company being wound up which was at some former time registered as unlimited but has [F177re-registered as a limited company.]

(2)Notwithstanding section 74(2)(a) above, a past member of the company who was a member of it at the time of re-registration, if the winding up commences within the period of 3 years beginning with the day on which the company was re-registered, is liable to contribute to the assets of the company in respect of debts and liabilities contracted before that time.

(3)If no persons who were members of the company at that time are existing members of it, a person who at that time was a present or past member is liable to contribute as above notwithstanding that the existing members have satisfied the contributions required to be made by them F178. . .

This applies subject to section 74(2)(a) above and to subsection (2) of this section, but notwithstanding section 74(2)(c).

(4)Notwithstanding section 74(2)(d) and (3), there is no limit on the amount which a person who, at that time, was a past or present member of the company is liable to contribute as above.

Textual Amendments

F177Words in s. 77(1) substituted (1.10.2009) by The Companies Act 2006 (Consequential Amendments, Transitional Provisions and Savings) Order 2009, (S.I. 2009/1941) arts. 2(1), 8, {Sch. 1 para. 75(6)(a)} (with art. 10, Sch. 1 para. 84)

F178Words in s. 77(3) omitted (1.10.2009) by virtue of The Companies Act 2006 (Consequential Amendments, Transitional Provisions and Savings) Order 2009, (S.I. 2009/1941) arts. 2(1), 8, {Sch. 1 para. 75(6)(b)} (with art. 10, Sch. 1 para. 84)

78 Unlimited company formerly limited.E+W+S

(1)This section applies in the case of a company being wound up which was at some former time registered as limited but has been re-registered as unlimited F179. . . .

(2)A person who, at the time when the application for the company to be re-registered was lodged, was a past member of the company and did not after that again become a member of it is not liable to contribute to the assets of the company more than he would have been liable to contribute had the company not been re-registered.

Textual Amendments

F179Words in s. 78(1) omitted (1.10.2009) by virtue of The Companies Act 2006 (Consequential Amendments, Transitional Provisions and Savings) Order 2009, (S.I. 2009/1941) arts. 2(1), 8, {Sch. 1 para. 75(7)} (with art. 10, Sch. 1 para. 84)

79 Meaning of “contributory”.E+W+S

(1)In this Act F180. . . the expression “contributory” means every person liable to contribute to the assets of a company in the event of its being wound up, and for the purposes of all proceedings for determining, and all proceedings prior to the final determination of, the persons who are to be deemed contributories, includes any person alleged to be a contributory.

(2)The reference in subsection (1) to persons liable to contribute to the assets does not include a person so liable by virtue of a declaration by the court under section 213 (imputed responsibility for company’s fraudulent trading) or section 214 (wrongful trading) in Chapter X of this Part.

(3)A reference in a company’s articles to a contributory does not (unless the context requires) include a person who is a contributory only by virtue of section 76.

F181. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F180Words in s. 79(1) omitted (1.10.2009) by virtue of The Companies Act 2006 (Consequential Amendments, Transitional Provisions and Savings) Order 2009, (S.I. 2009/1941) arts. 2(1), 8, {Sch. 1 para. 75(8)(a)} (with art. 10, Sch. 1 para. 84)

F181Words in s. 79(3) omitted (1.10.2009) by virtue of The Companies Act 2006 (Consequential Amendments, Transitional Provisions and Savings) Order 2009, (S.I. 2009/1941) arts. 2(1), 8, {Sch. 1 para. 75(8)(b)} (with art. 10, Sch. 1 para. 84)

80 Nature of contributory’s liability.E+W+S

The liability of a contributory creates a debt (in England and Wales in the nature of [F182an ordinary contract debt]) accruing due from him at the time when his liability commenced, but payable at the times when calls are made for enforcing the liability.

Textual Amendments

F182Words in s. 80 text substituted (1.10.2009) by The Companies Act 2006 (Consequential Amendments, Transitional Provisions and Savings) Order 2009, (S.I. 2009/1941) arts. 2(1), 8, {Sch. 1 para. 75(9)} (with art. 10, Sch. 1 para. 84)

81 Contributories in case of death of a member.E+W+S

(1)If a contributory dies either before or after he has been placed on the list of contributories, his personal representatives, and the heirs and legatees of heritage of his heritable estate in Scotland, are liable in a due course of administration to contribute to the assets of the company in discharge of his liability and are contributories accordingly.

(2)Where the personal representatives are placed on the list of contributories, the heirs or legatees of heritage need not be added, but they may be added as and when the court thinks fit.

(3)If in England and Wales the personal representatives make default in paying any money ordered to be paid by them, proceedings may be taken for administering the estate of the deceased contributory and for compelling payment out of it of the money due.

82 Effect of contributory’s bankruptcy.E+W+S

(1)The following applies if a contributory becomes bankrupt, either before or after he has been placed on the list of contributories.

(2)His trustee in bankruptcy represents him for all purposes of the winding up, and is a contributory accordingly.

(3)The trustee may be called on to admit to proof against the bankrupt’s estate, or otherwise allow to be paid out of the bankrupt’s assets in due course of law, any money due from the bankrupt in respect of his liability to contribute to the company’s assets.

(4)There may be proved against the bankrupt’s estate the estimated value of his liability to future calls as well as calls already made.

83[F183Companies registered but not formed under the Companies Act 2006]E+W+S

(1)The following applies in the event of a company being wound up which [F184is registered but not formed under the Companies Act 2006.].

(2)Every person is a contributory, in respect of the company’s debts and liabilities contracted before registration, who is liable—

(a)to pay, or contribute to the payment of, any debt or liability so contracted, or

(b)to pay, or contribute to the payment of, any sum for the adjustment of the rights of the members among themselves in respect of any such debt or liability, or

(c)to pay, or contribute to the amount of, the expenses of winding up the company, so far as relates to the debts or liabilities above mentioned.

(3)Every contributory is liable to contribute to the assets of the company, in the course of the winding up, all sums due from him in respect of any such liability.

(4)In the event of the death, bankruptcy or insolvency of any contributory, provisions of this Act, with respect to the personal representatives, to the heirs and legatees of heritage of the heritable estate in Scotland of deceased contributories and to the trustees of bankrupt or insolvent contributories respectively, apply.

Textual Amendments

F183S. 83 heading substituted (1.10.2009) by The Companies Act 2006 (Consequential Amendments, Transitional Provisions and Savings) Order 2009, (S.I. 2009/1941) arts. 2(1), 8, {Sch. 1 para. 75(10)(a)} (with art. 10, Sch. 1 para. 84)

F184Words in s. 83(1) substituted (1.10.2009) by The Companies Act 2006 (Consequential Amendments, Transitional Provisions and Savings) Order 2009, (S.I. 2009/1941) arts. 2(1), 8, {Sch. 1 para. 75(10)(b)} (with art. 10, Sch. 1 para. 84)

Chapter IIE+W+S Voluntary Winding Up (Introductory and General)

Resolutions for, and commencement of, voluntary winding upE+W+S

84 Circumstances in which company may be wound up voluntarily.E+W+S

(1)A company may be wound up voluntarily—

(a)when the period (if any) fixed for the duration of the company by the articles expires, or the event (if any) occurs, on the occurrence of which the articles provide that the company is to be dissolved, and the company in general meeting has passed a resolution requiring it be wound up voluntarily;

(b)if the company resolves by special resolution that it be wound up voluntarily;

(c)F185. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2)In this Act the expression “a resolution for voluntary winding up” means a resolution passed under [F186either of the paragraphs] of subsection (1).

[F187(2A)Before a company passes a resolution for voluntary winding up it must give written notice of the resolution to the holder of any qualifying floating charge to which section 72A applies.

(2B)Where notice is given under subsection (2A) a resolution for voluntary winding up may be passed only—

(a)after the end of the period of five business days beginning with the day on which the notice was given, or

(b)if the person to whom the notice was given has consented in writing to the passing of the resolution.]

[F188(3)Chapter 3 of Part 3 of the Companies Act 2006 (resolutions affecting a company's constitution) applies to a resolution under paragraph (a) of subsection (1) as well as a special resolution under paragraph (b).]

[F189(4)This section has effect subject to section 43 of the Commonhold and Leasehold Reform Act 2002.]

Textual Amendments

F186Words in s. 84(2) substituted (1.10.2007 with application as noted in Sch. 4 para. 39(5) of the amending S.I.) by The Companies Act 2006 (Commencement No. 3, Consequential Amendments, Transitional Provisions and Savings) Order 2007 (S.I. 2007/2194), art. 10(1), Sch. 4 para. 39(3) (with art. 12)

F188S. 84(3) substituted (1.10.2007 with application as noted in Sch. 4 para. 39(5) of the amending S.I.) by The Companies Act 2006 (Commencement No. 3, Consequential Amendments, Transitional Provisions and Savings) Order 2007 (S.I. 2007/2194), art. 10(1), Sch. 4 para. 39(4) (with art. 12)

F189S. 84(4) added (E.W.) (27.9.2004) by 2002 c. 15, ss. 68, 181(1), Sch. 5 para. 6; S.I. 2004/1832, art. 2

Modifications etc. (not altering text)

C166S. 84 modified (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(2), Sch. 3 (as amended (1.10.2009) by S.S.I. 2009/310, reg. 4, Sch. 2 para. 1(a))

85 Notice of resolution to wind up.E+W+S

(1)When a company has passed a resolution for voluntary winding up, it shall, within 14 days after the passing of the resolution, give notice of the resolution by advertisement in the Gazette.

(2)If default is made in complying with this section, the company and every officer of it who is in default is liable to a fine and, for continued contravention, to a daily default fine.

For purposes of this subsection the liquidator is deemed an officer of the company.

86 Commencement of winding up.E+W+S

A voluntary winding up is deemed to commence at the time of the passing of the resolution for voluntary winding up.

Consequences of resolution to wind upE+W+S

87

(1)In case of a voluntary winding up, the company shall from the commencement of the winding up cease to carry on its business, except so far as may be required for its beneficial winding up.

(2)However, the corporate state and corporate powers of the company, notwithstanding anything to the contrary in its articles, continue until the company is dissolved.

88 Avoidance of share transfers, etc. after winding-up resolution.E+W+S

Any transfer of shares, not being a transfer made to or with the sanction of the liquidator, and any alteration in the status of the company’s members, made after the commencement of a voluntary winding up, is void.

Declaration of solvencyE+W+S

89 Statutory declaration of solvency.E+W+S

(1)Where it is proposed to wind up a company voluntarily, the directors (or, in the case of a company having more than two directors, the majority of them) may at a directors’ meeting make a statutory declaration to the effect that they have made a full inquiry into the company’s affairs and that, having done so, they have formed the opinion that the company will be able to pay its debts in full, together with interest at the official rate (as defined in section 251), within such period, not exceeding 12 months from the commencement of the winding up, as may be specified in the declaration.

(2)Such a declaration by the directors has no effect for purposes of this Act unless—

(a)it is made within the 5 weeks immediately preceding the date of the passing of the resolution for winding up, or on that date but before the passing of the resolution, and

(b)it embodies a statement of the company’s assets and liabilities as at the latest practicable date before the making of the declaration.

(3)The declaration shall be delivered to the registrar of companies before the expiration of 15 days immediately following the date on which the resolution for winding up is passed.

(4)A director making a declaration under this section without having reasonable grounds for the opinion that the company will be able to pay its debts in full, together with interest at the official rate, within the period specified is liable to imprisonment or a fine, or both.

(5)If the company is wound up in pursuance of a resolution passed within 5 weeks after the making of the declaration, and its debts (together with interest at the official rate) are not paid or provided for in full within the period specified, it is to be presumed (unless the contrary is shown) that the director did not have reasonable grounds for his opinion.

(6)If a declaration required by subsection (3) to be delivered to the registrar is not so delivered within the time prescribed by that subsection, the company and every officer in default is liable to a fine and, for continued contravention, to a daily default fine.

Modifications etc. (not altering text)

C169S. 89(3) amended (1.7.1999) by 1998 c. 46, s. 125, Sch. 8 para. 23(5) (with s. 126(3)-(11)); S.I. 1998/3178, arts. 2, 3,

90 Distinction between “members’” and “creditors’” voluntary winding up.E+W+S

A winding up in the case of which a directors’ statutory declaration under section 89 has been made is a “members’ voluntary winding up”; and a winding up in the case of which such a declaration has not been made is a “creditors’ voluntary winding up”.

Chapter IIIE+W+S Members’ Voluntary Winding Up

91 Appointment of liquidator.E+W+S

(1)In a members’ voluntary winding up, the company in general meeting shall appoint one or more liquidators for the purpose of winding up the company’s affairs and distributing its assets.

(2)On the appointment of a liquidator all the powers of the directors cease, except so far as the company in general meeting or the liquidator sanctions their continuance.

Modifications etc. (not altering text)

C170S. 91(1)(2) modified (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(2), Sch. 3

Ss. 91-93 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4, Sch. 2

92 Power to fill vacancy in office of liquidator.E+W+S

(1)If a vacancy occurs by death resignation or otherwise in the office of liquidator appointed by the company, the company in general meeting may, subject to any arrangement with its creditors, fill the vacancy.

(2)For that purpose a general meeting may be convened by any contributory or, if there were more liquidators than one, by the continuing liquidators.

(3)The meeting shall be held in manner provided by this Act or by the articles, or in such manner as may, on application by any contributory or by the continuing liquidators, be determined by the court.

Modifications etc. (not altering text)

C171Ss. 91-93 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4, Sch. 2

S. 92(1)(2)(3)(4) modified (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(2), Sch. 3

[F19092AProgress report to company F191... [F192(England and Wales)]E+W+S

(1)Subject to [F193sections 96 and 102] [F193section 96] , [F194[F195where the company is registered in England and Wales]] the liquidator must—

(a)for each prescribed period produce a progress report relating to the prescribed matters; and

(b)within such period commencing with the end of the period referred to in paragraph (a) as may be prescribed send a copy of the progress report to—

(i)the members of the company; and

(ii)such other persons as may be prescribed.

(2)A liquidator who fails to comply with this section is liable to a fine.]

Textual Amendments

F191Words in s. 92A heading omitted (26.5.2015) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), ss. 136(2)(b), 164(3)(i)(v)

F192Words in s. 92A title repealed (S.) (coming into force in accordance with art. 1(3)(4) of the amending S.S.I.) by The Public Services Reform (Insolvency) (Scotland) Order 2016 (S.S.I. 2016/141), art. 5(1)(b) (with arts. 14, 15)

F193Words in s. 92A(1) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 16; S.I. 2015/1329, reg. 3(d)

F194Words in s. 92A(1) repealed (S.) (coming into force in accordance with art. 1(3)(4) of the amending S.S.I.) by The Public Services Reform (Insolvency) (Scotland) Order 2016 (S.S.I. 2016/141), art. 5(1)(a) (with arts. 14, 15)

93 General company meeting at each year’s end [F196(Scotland)]E+W+S

[F197(1)Subject to [F198sections 96 and 102] [F198section 96], in the event of the winding up [F199of a company registered in Scotland] continuing for more than one year, the liquidator shall summon a general meeting of the company at the end of the first year from the commencement of the winding up, and of each succeeding year, or at the first convenient date within 3 months from the end of the year or such longer period as the Secretary of State may allow.

(2)The liquidator shall lay before the meeting an account of his acts and dealings, and of the conduct of the winding up, during the preceding year.

(3)If the liquidator fails to comply with this section, he is liable to a fine.]

Textual Amendments

F197S. 93 repealed (S.) (coming into force in accordance with art. 1(3)(4) of the amending S.S.I.) by The Public Services Reform (Insolvency) (Scotland) Order 2016 (S.S.I. 2016/141), art. 5(2) (with arts. 14, 15)

F198Words in s. 93(1) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 17; S.I. 2015/1329, reg. 3(d)

Modifications etc. (not altering text)

C172Ss. 91-93 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4, Sch. 2

C173S. 93(1) modified (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(2), Sch. 3

94[F200 Final meeting prior to dissolution.][F200Final account prior to dissolution]E+W+S

[F200(1)As soon as the company’s affairs are fully wound up, the liquidator shall make up an account of the winding up showing how it has been conducted and the company’s property has been disposed of, and thereupon shall call a general meeting of the company for the purpose of laying before it the account, and giving an explanation of it.

(2)The meeting shall be called by advertisement in the Gazette, specifying its time, place and object and published at least one month before the meeting.

(3)Within one week after the meeting, the liquidator shall send to the registrar of companies a copy of the account, and shall make a return to him of the holding of the meeting and of its date.

(4)If the copy is not sent or the return is not made in accordance with subsection (3), the liquidator is liable to a fine and, for continued contravention, to a daily default fine.

(5)If a quorum is not present at the meeting, the liquidator shall, in lieu of the return mentioned above, make a return that the meeting was duly summoned and that no quorum was present; and upon such a return being made, the provisions of subsection (3) as to the making of the return are deemed complied with.

(6)If the liquidator fails to call a general meeting of the company as required by subsection (1), he is liable to a fine.]

[F200(1)As soon as the company's affairs are fully wound up the liquidator must make up an account of the winding up, showing how it has been conducted and the company's property has been disposed of.

(2)The liquidator must send a copy of the account to the members of the company before the end of the period of 14 days beginning with the day on which the account is made up.

(3)The liquidator must send a copy of the account to the registrar of companies before the end of that period (but not before sending it to the members of the company).

(4)If the liquidator does not comply with subsection (2) the liquidator is liable to a fine.

(5)If the liquidator does not comply with subsection (3) the liquidator is liable to a fine and, for continued contravention, a daily default fine.]

Textual Amendments

Modifications etc. (not altering text)

C174Ss. 94, 106 applied with modifications by Building Societies Act 1986 (c. 53, SIF 16), ss. 54(3)(a)(5)(a), 90, 126(3), Sch. 15 para. 56(1)

C175S. 94 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

S. 94 modified (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(2), Sch. 3

C176S. 94(3) amended (1.7.1999) by 1998 c. 46, s. 125, Sch. 8 para. 23(1)-(3) (with s. 126(3)-(11)); S.I. 1998/3178, arts. 2, 3

95 Effect of company’s insolvency.E+W+S

(1)This section applies where the liquidator is of 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 under section 89.

[F201(1A)The liquidator must before the end of the period of 7 days beginning with the day after the day on which the liquidator formed that opinion—

(a)make out a statement in the prescribed form as to the affairs of the company, and

(b)send it to the company's creditors.]

(2)[F202[F203In the case of the winding up of a company registered in Scotland, the liquidator] shall—

(a)summon a meeting of creditors for a day not later than the 28th day after the day on which he formed that opinion;

(b)send notices of the creditors’ meeting to the creditors by post not less than 7 days before the day on which that meeting is to be held;

(c)cause notice of the creditors’ meeting to be adertvised once in the Gazette and once at least in 2 newspapers circulating in the relevant locality (that is to say the locality in which the company’s principal place of business in Great Britain was situated during the relevant period); and

(d)during the period before the day on which the creditors’ meeting is to be held, furnish creditors free of charge with such information concerning the affairs of the company as they may reasonably require;]

and the notice of the creditors’ meeting shall state the duty imposed by paragraph (d) above.

[F204(2A)[F202In the case of the winding up of a company registered in England and Wales, the liquidator—

(a)shall summon a meeting of creditors for a day not later than the 28th day after the day on which he formed that opinion;

(b)shall send notices of the creditors' meeting to the creditors [F205by post] not less than 7 days before the day on which that meeting is to be held;

(c)shall cause notice of the creditors' meeting to be advertised once in the Gazette;

(d)may cause notice of the meeting to be advertised in such other manner as he thinks fit; and

(e)shall during the period before the day on which the creditors' meeting is to be held, furnish creditors free of charge with such information concerning the affairs of the company as they may reasonably require;

and the notice of the creditors' meeting shall state the duty imposed by paragraph (e) above.]]

(3)[F202The liquidator shall also—

(a)make out a statement in the prescribed form as to the affairs of the company;

(b)lay that statement before the creditors’ meeting; and

(c)attend and preside at that meeting.]

(4)The statement as to the affairs of the company F206. . . shall show—

(a)particulars of the company’s assets, debts and liabilities;

(b)the names and addresses of the company’s creditors;

(c)the securities held by them respectively;

(d)the dates when the securities were respectively given; and

(e)such further or other information as may be prescribed.

[F207(4A)The statement as to the affairs of the company shall be [F208verified by the liquidator]

(a)in the case of a winding up of a company registered in England and Wales [F209be verified by the liquidator] , by a statement of truth; and

(b)in the case of a winding up of a company registered in Scotland, [F210by affidavit] [F210contain a statutory declaration by the liquidator] .]

[F211(4B)The company's creditors may in accordance with the rules nominate a person to be liquidator.

(4C)The liquidator must in accordance with the rules seek such a nomination from the company's creditors.]

(5)[F212Where the company’s principal place of business in Great Britain was situated in different localities at different times during the relevant period, the duty imposed by subsection (2)(c) applies separately in relation to each of those localities.]

(6)[F212Where the company had no place of business in Great Britain during the relevant period, references in subsections (2)(c) and (5) to the company’s principal place of business in Great Britain are replaced by references to its registered office.]

(7)[F212In this section “the relevant period” means the period of 6 months immediately preceding the day on which were sent the notices summoning the company meeting at which it was resolved that the company be wound up voluntarily.]

(8)If the liquidator without reasonable excuse fails to comply with [F213this section] [F213subsections (1) to (4A)] , he is liable to a fine.

Textual Amendments

F202S. 95(2)-(3) omitted (26.5.2015 for specified purposes) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 19(3); S.I. 2015/1329, reg. 3(d)

F208Words in s. 95(4A) repealed (S.) (coming into force in accordance with art. 1(3)(4) of the amending S.S.I.) by The Public Services Reform (Insolvency) (Scotland) Order 2016 (S.S.I. 2016/141), art. 8(a) (with arts. 14, 15)

F209Words in s. 95(4A)(a) inserted (S.) (coming into force in accordance with art. 1(3)(4) of the amending S.S.I.) by The Public Services Reform (Insolvency) (Scotland) Order 2016 (S.S.I. 2016/141), art. 8(b) (with arts. 14, 15)

F210Words in s. 95(4A)(b) substituted (S.) (coming into force in accordance with art. 1(3)(4) of the amending S.S.I.) by The Public Services Reform (Insolvency) (Scotland) Order 2016 (S.S.I. 2016/141), art. 8(c) (with arts. 14, 15)

F212S. 95(5)-(7) omitted (26.5.2015 for specified purposes) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 19(3); S.I. 2015/1329, reg. 3(d)

F213Words in s. 95(8) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 19(5); S.I. 2015/1329, reg. 3(d)

Modifications etc. (not altering text)

C177S. 95 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

S. 95 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

96 Conversion to creditors’ voluntary winding up.E+W+S

[F214As from the day on which the creditors’ meeting is held under section 95, this Act has effect as if—

(a)the directors’ declaration under section 89 had not been made; and

(b)the creditors’ meeting and the company meeting at which it was resolved that the company be wound up voluntarily were the meetings mentioned in section 98 in the next Chapter;

and accordingly the winding up becomes a creditors’ voluntary winding up.]

[F214(1)The winding up becomes a creditors' voluntary winding up as from the day on which—

(a)the company's creditors under section 95 nominate a person to be liquidator, or

(b)the procedure by which the company's creditors were to have made such a nomination concludes without a nomination having been made.

(2)As from that day this Act has effect as if the directors' declaration under section 89 had not been made.

(3)The liquidator in the creditors' voluntary winding up is to be the person nominated by the company's creditors under section 95 or, where no person has been so nominated, the existing liquidator.

(4)In the case of the creditors nominating a person other than the existing liquidator any director, member or creditor of the company may, within 7 days after the date on which the nomination was made by the creditors, apply to the court for an order either—

(a)directing that the existing liquidator is to be liquidator instead of or jointly with the person nominated by the creditors, or

(b)appointing some other person to be liquidator instead of the person nominated by the creditors.

[F215(5)The “existing liquidator” is the person who is liquidator immediately before the winding up becomes a creditors' voluntary winding up.]]

Chapter IVE+W+S Creditors’ Voluntary Winding Up

97 Application of this Chapter.E+W+S

(1)Subject as follows, this Chapter applies in relation to a creditors’ voluntary winding up.

(2)Sections [F21698 and 99] [F21699 and 100] do not apply where, under section 96 in Chapter III, a members’ voluntary winding up has become a creditors’ voluntary winding up.

Textual Amendments

F216Words in s. 97(2) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 21; S.I. 2015/1329, reg. 3(d)

Modifications etc. (not altering text)

C178S. 97 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

98 Meeting of creditors.E+W+S

[F217(1)[F218In the case of the winding up of a company registered in Scotland, the company] shall—

(a)cause a meeting of its creditorsto be summoned for a day not later than the 14th day after the day on which there is to be held the company meeting at which the resolution for voluntary winding up is to be proposed;

(b)cause the notices of the creditors’ meeting to be sent by post to the creditors not less than 7 days before the day on which that meeting is to be held; and

(c)cause notice of the creditors’ meeting to be advertised once in the Gazette and once at least in two newspapers circulating in the relevant locality (that is to say the locality in which the company’s principal place of business in Great Britain was situated during the relevant period).

[F219(1A)In the case of the winding up of a company registered in England and Wales, the company—

(a)shall cause a meeting of its creditors to be summoned for a day not later than the 14th day after the day on which there is to be held the company meeting at which the resolution for voluntary winding up is to be proposed;

(b)shall cause the notices of the creditors' meeting to be sent [F220by post] to the creditors not less than 7 days before the day on which that meeting is to be held;

(c)shall cause notice of the creditors' meeting to be advertised once in the Gazette; and

(d)may cause notice of the meeting to be advertised in such other manner as the directors think fit.]

(2)The notice of the creditors’ meeting shall state either—

(a)the name and address of a person qualified to act as an insolvency practitioner in relation to the company who, during the period before the day on which that meeting is to be held, will furnish creditors free of charge with such information concerning the company’s affairs as they may reasonably require; or

(b)a place in the relevant locality where, on the two business days falling next before the day on which that meeting is to be held, a list of the names and addresses of the company’s creditors will be available for inspection free of charge.

(3)Where the company’s principal place of business in Great Britain was situated in different localities at different times during the relevant period, the duties imposed by subsections (1)(c) and (2)(b) above apply separately in relation to each of those localities.

(4)Where the company had no place of business in Great Britain during the relevant period, references in subsections (1)(c) and (3) to the company’s principal place of business in Great Britain are replaced by references to its registered office.

(5)In this section “the relevant period” means the period of 6 months immediately preceding the day on which were sent the notices summoning the company meeting at which it was resolved that the company be wound up voluntarily.

(6)If the company without reasonable excuse fails to comply with subsection (1) [F221, (1A)] or (2), it is guilty of an offence and liable to a fine.]

99 Directors to lay statement of affairs before creditors.E+W+S

[F222(1)The directors of the company shall—

(a)make out a statement in the prescribed formas to the affairs of the company;

(b)cause that statement to be laid before the creditors’ meeting under section 98; and

(c)appoint one of their number to preside at that meeting;

and it is the duty of the director so appointed to attend the meeting and preside over it.]

[F222(1)The directors of the company must, before the end of the period of 7 days beginning with the day after the day on which the company passes a resolution for voluntary winding up—

(a)make out a statement in the prescribed form as to the affairs of the company, and

(b)send the statement to the company's creditors.]

(2)The statement as to the affairs of the company F223. . . shall show—

(a)particulars of the company’s assets, debts and liabilities;

(b)the names and addresses of the company’s creditors;

(c)the securities held by them respectively;

(d)the dates when the securities were respectively given; and

(e)such further or other information as may be prescribed.

[F224(2A)The statement as to the affairs of the company shall [F225be verified by some or all of the directors]

(a)in the case of a winding up of a company registered in England and Wales, [F226be verified by some or all of the directors] by a statement of truth; and

(b)in the case of a winding up of a company registered in Scotland, [F227by affidavit] [F227contain a statutory declaration by some or all of the directors] .]

[F228(3)If—

(a)the directors without reasonable excuse fail to comply with subsection (1) [F229, (2) or (2A)]; or

(b)any director without reasonable excuse fails to comply with subsection (1), so far as requiring him to attend and preside at the creditors’ meeting,

the directors are or (as the case may be) the director is guilty of an offence and liable to a fine.]

[F228(3)If the directors without reasonable excuse fail to comply with subsection (1), (2) or (2A), they are guilty of an offence and liable to a fine.]

Textual Amendments

F225Words in s. 99(2A) repealed (S.) (coming into force in accordance with art. 1(3)(4) of the amending S.S.I.) by The Public Services Reform (Insolvency) (Scotland) Order 2016 (S.S.I. 2016/141), art. 9(a) (with arts. 14, 15)

F226Words in s. 99(2A)(a) inserted (S.) (coming into force in accordance with art. 1(3)(4) of the amending S.S.I.) by The Public Services Reform (Insolvency) (Scotland) Order 2016 (S.S.I. 2016/141), art. 9(b) (with arts. 14, 15)

F227Words in s. 99(2A)(b) substituted (S.) (coming into force in accordance with art. 1(3)(4) of the amending S.S.I.) by The Public Services Reform (Insolvency) (Scotland) Order 2016 (S.S.I. 2016/141), art. 9(c) (with arts. 14, 15)

100 Appointment of liquidator.E+W+S

[F230(1)The creditors and the company at their respective meetings mentioned in section 98 may nominate a person to be liquidator for the purpose of winding up the company’s affairs and distributing its assets.]

[F230(1)The company may nominate a person to be liquidator at the company meeting at which the resolution for voluntary winding up is passed.

(1A)The company's creditors may in accordance with the rules nominate a person to be liquidator.

(1B)The directors of the company must in accordance with the rules seek such a nomination from the company's creditors.]

(2)The liquidator shall be the person nominated by the creditors or, where no person has been so nominated, the person (if any) nominated by the company.

(3)In the case of different persons being nominated, any director, member or creditor of the company may, within 7 days after the date on which the nomination was made by the creditors, apply to the court for an order either—

(a)directing that the person nominated as liquidator by the company shall be liquidator instead of or jointly with the person nominated by the creditors, or

(b)appointing some other person to be liquidator instead of the person nominated by the creditors.

Textual Amendments

F230S. 100(1)-(1B) substituted for s. 100(1) (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 24; S.I. 2015/1329, reg. 3(d)

Modifications etc. (not altering text)

C179S. 100 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C180S. 100(1)(3) modified (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(2), Sch. 3

101 Appointment of liquidation committee.E+W+S

(1)[F231The creditors at the meeting to be held under section 98 or at any subsequent meeting may, if they think fit, appoint a committee (“the liquidation committee”) of not more than 5 persons to exercise the functions conferred on it by or under this Act.]

[F231The creditors may in accordance with the rules appoint a committee (“the liquidation committee”) of not more than 5 persons to exercise the functions conferred on it by or under this Act.]

(2)If such a committee is appointed, the company may, either at the meeting at which the resolution for voluntary winding up is passed or at any time subsequently in general meeting, appoint such number of persons as they think fit to act as members of the committee, not exceeding 5.

(3)However, the creditors may, if they think fit, [F232resolve] [F232decide] that all or any of the persons so appointed by the company ought not to be members of the liquidation committee; and if the creditors so [F232resolve] [F232decide]

(a)[F233the persons mentioned in the resolution] [F233those persons] are not then, unless the court otherwise directs, qualified to act as members of the committee; and

(b)on any application to the court under this provision the court may, if it thinks fit, appoint other persons to act as such members in place of [F233the persons mentioned in the resolution] [F233those persons] .

(4)In Scotland, the liquidation committee has, in addition to the powers and duties conferred and imposed on it by this Act, such of the powers and duties of commissioners on a bankrupt estate as may be conferred and imposed on liquidation committees by the rules.

Textual Amendments

F233Words in s. 101(3) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 25(3)(b); S.I. 2015/1329, reg. 3(d)

Modifications etc. (not altering text)

C181S. 101 amended (1.12.2001) by 2000 c. 8, ss. 365(5)(b), 371(2)(b); S.I. 2001/3538, art. 2(1)

S. 101 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C182S. 101(2) modified (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(2), Sch. 3

102 Creditors’ meeting where winding up converted under s. 96.E+W+S

[F234Where, in the case of a winding up which was under section 96 in Chapter III, converted to a creditors’ voluntary winding up, a creditors’ meeting is held in accordance with section 95, any appointment made or committee established by that meeting is deemed to have been made or established by a meeting held in accordance with section 98 in this Chapter.]

Textual Amendments

Modifications etc. (not altering text)

C183S. 102 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

103 Cesser of directors’ powers.E+W+S

On the appointment of a liquidator, all the powers of the directors cease, except so far as the liquidation committee (or, if there is no such committee, the creditors) sanction their continuance.

104 Vacancy in office of liquidator.E+W+S

If a vacancy occurs, by death, resignation or otherwise, in the office of a liquidator (other than a liquidator appointed by, or by the direction of, the court), the creditors may fill the vacancy.

Modifications etc. (not altering text)

C184S. 104 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

[F235104AProgress report to company and creditors F236... [F237(England and Wales)]E+W+S

(1)[F238[F239Where the company is registered in England and Wales]] [F238The] the liquidator must—

(a)for each prescribed period produce a progress report relating to the prescribed matters; and

(b)within such period commencing with the end of the period referred to in paragraph (a) as may be prescribed send a copy of the progress report to—

(i)the members and creditors [F240, other than opted-out creditors] of the company; and

(ii)such other persons as may be prescribed.

(2)A liquidator who fails to comply with this section is liable to a fine.]

Textual Amendments

F236Word in s. 104A heading omitted (26.5.2015) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), ss. 136(3)(b), 164(3)(i)(v)

F237Words in s. 104A title repealed (S.) (coming into force in accordance with art. 1(3)(4) of the amending S.S.I.) by The Public Services Reform (Insolvency) (Scotland) Order 2016 (S.S.I. 2016/141), art. 6(1)(b) (with arts. 14, 15)

F238Word in s. 104A(1) substituted (S.) (coming into force in accordance with art. 1(3)(4) of the amending S.S.I.) by The Public Services Reform (Insolvency) (Scotland) Order 2016 (S.S.I. 2016/141), art. 6(1)(a) (with arts. 14, 15)

F240Words in s. 104A(1)(b)(i) inserted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 27; S.I. 2015/1329, reg. 3(d)

105 Meetings of company and creditors at each year’s end [F241(Scotland)].E+W+S

[F242(1)If the winding up [F243of a company registered in Scotland] continues for more than one year, the liquidator shall summon a general meeting of the company and a meeting of the creditors at the end of the first year from the commencement of the winding up, and of each succeeding year, or at the first convenient date within 3 months from the end of the year or such longer period as the Secretary of State may allow.

(2)The liquidator shall lay before each of the meetings an account of his acts and dealings and of the conduct of the winding up during the preceding year.

(3)If the liquidator fails to comply with this section, he is liable to a fine.

(4)Where under section 96 a members’ voluntary winding up has become a creditors’ voluntary winding up, and the [F244creditors’ meeting under section 95 is held] [F244liquidator sends a statement of affairs to the company's creditors under section 95(1A)(b)] 3 months or less before the end of the first year from the commencement of the winding up, the liquidator is not required by this section to summon a meeting of creditors at the end of that year.]

Textual Amendments

F242S. 105 repealed (S.) (coming into force in accordance with art. 1(3)(4) of the amending S.S.I.) by The Public Services Reform (Insolvency) (Scotland) Order 2016 (S.S.I. 2016/141), art. 6(2) (with arts. 14, 15)

F244Words in s. 105(4) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 28; S.I. 2015/1329, reg. 3(d)

Modifications etc. (not altering text)

C185S. 105 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C186S. 105 modified (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(2), Sch. 3

106 Final meeting prior to dissolution.E+W+S

[F245(1)As soon as the company’s affairs are fully wound up, the liquidator shall make up an account of the winding up, showing how it has been conducted and the company’s property has been disposed of, and thereupon shall call a general meeting of the company and a meeting of the creditors for the purpose of laying the account before the meetings and giving an explanation of it.

(2)Each such meeting shall be called by advertisement in the Gazette specifying the time, place and object of the meeting, and published at least one month before it.

(3)Within one week after the date of the meetings (or, if they are not held on the same date, after the date of the later one) the liquidator shall send to the registrar of companies a copy of the account, and shall make a return to him of the holding of the meetings and of their dates.

(4)If the copy is not sent or the return is not made in accordance with subsection (3), the liquidator is liable to a fine and, for continued contravention, to a daily default fine.

(5)However, if a quorum is not present at either such meeting, the liquidator shall, in lieu of the return required by subsection (3), make a return that the meeting was duly summoned and that no quorum was present; and upon such return being made the provisions of that subsection as to the making of the return are, in respect of that meeting, deemed complied with.

(6)If the liquidator fails to call a general meeting of the company or a meeting of the creditors as required by this section, he is liable to a fine.]

[F245(1)As soon as the company's affairs are fully wound up the liquidator must make up an account of the winding up, showing how it has been conducted and the company's property has been disposed of.

(2)The liquidator must, before the end of the period of 14 days beginning with the day on which the account is made up—

(a)send a copy of the account to the company's members,

(b)send a copy of the account to the company's creditors (other than opted-out creditors), and

(c)give the company's creditors (other than opted-out creditors) a notice explaining the effect of section 173(2)(e) and how they may object to the liquidator's release.

(3)The liquidator must during the relevant period send to the registrar of companies—

(a)a copy of the account, and

(b)a statement of whether any of the company's creditors objected to the liquidator's release.

(4)The relevant period is the period of 7 days beginning with the day after the last day of the period prescribed by the rules as the period within which the creditors may object to the liquidator's release.

(5)If the liquidator does not comply with subsection (2) the liquidator is liable to a fine.

(6)If the liquidator does not comply with subsection (3) the liquidator is liable to a fine and, for continued contravention, a daily default fine.]

Textual Amendments

Modifications etc. (not altering text)

C187Ss. 94, 106 applied with modifications by Building Societies Act 1986 (c. 53, SIF 16), ss. 54(3)(a)(5)(a), 90, 126(3), Sch. 15 para. 56(1)

C188S. 106 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C189S. 106 modified (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(2), Sch. 3

C190S. 106(3)(5) amended (1.7.1999) by 1998 c. 46, s. 125, Sch. 8 para. 23(2)(3) (with s. 126(3)-(11)); S>I. 1998/3178, arts. 2, 3

Chapter VE+W+S Provisions Applying to both kinds of Voluntary Winding Up

107 Distribution of company’s property.E+W+S

Subject to the provisions of this Act as to preferential payments, the company’s property in a voluntary winding up shall on the winding up be applied in satisfaction of the company’s liabilities pari passu and, subject to that application, shall (unless the articles otherwise provide) be distributed among the members according to their rights and interests in the company.

Modifications etc. (not altering text)

108 Appointment or removal of liquidator by the court.E+W+S

(1)If from any cause whatever there is not liquidator acting, the court may appoint a liquidator.

(2)The court may, on cause shown, remove a liquidator and appoint another.

109 Notice by liquidator of his appointment.E+W+S

(1)The liquidator shall, within 14 days after his appointment, publish in the Gazette and deliver to the registrar of companies for registration a notice of his appointment in the form prescribed by statutory instrument made by the Secretary of State.

(2)If the liquidator fails to comply with this section, he is liable to a fine and, for continued contravention, to a daily default fine.

Modifications etc. (not altering text)

C192S. 109 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C193S. 109(1) amended (1.7.1999) by 1998 c. 46, s. 125, Sch. 8 para. 23(4)(5) (with s. 126(3)-(11)); S.I. 1998/3178, arts. 2, 3

110 Acceptance of shares, etc., as consideration for sale of company property.E+W

(1)This section applies, in the case of a company proposed to be, or being, wound up voluntarily, where the whole or part of the company’s business or property is proposed to be transferred or sold

[F246(a)]to another company (“the transferee company"), whether or not the latter is a [F247company registered under the Companies Act 2006][F246, or

(b)to a limited liability partnership (the “transferee limited liability partnership").]

(2)With the requisite sanction, the liquidator of the company being, or proposed to be, wound up (“the transferor company") may receive, in compensation or part compensation for the transfer or [F248sale—

(a)in the case of the transferee company, shares, policies or other like interests in the transferee company for distribution among the members of the transferor company, or

(b)in the case of the transferee limited liability partnership, membership in the transferee limited liability partnership for distribution among the members of the transferor company.]

(3)The sanction requisite under subsection (2) is—

(a)in the case of a members’ voluntary winding up, that of a special resolution of the company, conferring either a general authority on the liquidator or an authority in respect of any particular arrangement, and

(b)in the case of a creditors’ voluntary winding up, that of either the court or the liquidation committee.

(4)Alternatively to subsection (2), the liquidator may (with that sanction) enter into any other arrangement whereby the members of the transferor [F249company may—

(a)in the case of the transferee company, in lieu of receiving cash, shares, policies or other like interests (or in addition thereto) participate in the profits of, or receive any other benefit from, the transferee company, or

(b)in the case of the transferee limited liability partnership, in lieu of receiving cash or membership (or in addition thereto), participate in some other way in the profits of, or receive any other benefit from, the transferee limited liability partnership.]

(5)A sale or arrangement in pursuance of this section is binding on members of the transferor company.

(6)A special resolution is not invalid for purposes of this section by reason that it is passed before or concurrently with a resolution for voluntary winding up or for appointing liquidators; but, if an order is made within a year for winding up the company by the court, the special resolution is not valid unless sanctioned by the court.

Extent Information

E1This version of this provision extends to England and Wales only; a separate version has been created for Scotland only

Textual Amendments

F246Words in s. 110(1) inserted (6.4.2001) by S.I. 2001/1090, reg. 9, Sch. 5 para. 15(2)

F247Words in s. 110(1)(a) substituted (1.10.2009) by The Companies Act 2006 (Consequential Amendments, Transitional Provisions and Savings) Order 2009, (S.I. 2009/1941) arts. 2(1), 8, {Sch. 1 para. 75(11)} (with art. 10, Sch. 1 para. 84)

F248Word in s. 110(2) substituted (6.4.2001) by S.I. 2001/1090, reg. 9, Sch. 5 para. 15(3)

F249Words in s. 110(4) substituted (6.4.2001) by S.I. 2001/1090, reg. 9, Sch. 5 para. 15(4)

110 Acceptance of shares, etc., as consideration for sale of company property.S

(1)This section applies, in the case of a company proposed to be, or being, wound up voluntarily, where the whole or part of the company’s business or property is proposed to be transferred or sold

[F1123(a)]to another company (“the transferee company”), whether or not the latter is a [F1124company registered under the Companies Act 2006][F1123, or

(b)to a limited liability partnership (the “transferee limited liability partnership”).]

(2)With the requisite sanction, the liquidator of the company being, or proposed to be, wound up (“the transferor company”) may receive, in compensation or part compensation for the transfer or [F1125sale–

(a)in the case of the transferee company, shares, policies or other like interests in the company for distribution among the members of the transferor company, or

(b)in the case of the transferee limited liability partnership, membership in the limited liability partnership for distribution among the members of the transferor company.]

(3)The sanction requisite under subsection (2) is—

(a)in the case of a members’ voluntary winding up, that of a special resolution of the company, conferring either a general authority on the liquidator or an authority in respect of any particular arrangement, and

(b)in the case of a creditors’ voluntary winding up, that of either the court or the liquidation committee.

(4)Alternatively to subsection (2), the liquidator [F1126may-

(a)in the case of the transferee company, in lieu of receiving cash, shares, policies or other like interests (or in addition thereto) participate in the profits of, or receive any other benefit from, the company, or

(b)in the case of the transferee limited liability partnership, in lieu of receiving cash, or membership (or in addition thereto) participate in some other way in the profits of, or receive any other benefit from, the limited liability partnership.]

(5)A sale or arrangement in pursuance of this section is binding on members of the transferor company.

(6)A special resolution is not invalid for purposes of this section by reason that it is passed before or concurrently with a resolution for voluntary winding up or for appointing liquidators; but, if an order is made within a year for winding up the company by the court, the special resolution is not valid unless sanctioned by the court.

Extent Information

E2This version of this provision extends to Scotland only; a separate version has been created for England and Wales only

Textual Amendments

F1123Words in s. 110(1) inserted (6.4.2001) by S.S.I. 2001/128, reg. 5, Sch. 4 para. 1(2)

F1124Words in s. 110(1)(a) substituted (1.10.2009) by The Companies Act 2006 (Consequential Amendments, Transitional Provisions and Savings) Order 2009, (S.I. 2009/1941) arts. 2(1), 8, {Sch. 1 para. 75(11)} (with art. 10, Sch. 1 para. 84)

F1125Words in s. 110(2) substituted (6.4.2001) by S.S.I. 2001/128, reg. 5, Sch. 4 para. 1(3)

F1126Words in s. 110(4) substituted (6.4.2001) by S.S.I. 2001/128, reg. 5, Sch. 4 para. 1(4)

Modifications etc. (not altering text)

C972S. 110 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

S. 110 modified (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(2), Sch. 3

111 Dissent from arrangement under s. 110.E+W+S

(1)This section applies in the case of a voluntary winding up where, for the purposes of section 110(2) or (4), there has been passed a special resolution of the transferor company providing the sanction requisite for the liquidator under that section.

(2)If a member of the transferor company who did not vote in favour of the special resolution expresses his dissent from it in writing, addressed to the liquidator and left at the company’s registered office within 7 days after the passing of the resolution, he may require the liquidator either to abstain from carrying the resolution into effect or to purchase his interest at a price to be determined by agreement or by arbitration under this section.

(3)If the liquidator elects to purchase the member’s interest, the purchase money must be paid before the company is dissolved and be raised by the liquidator in such manner as may be determined by special resolution.

(4)For purposes of an arbitration under this section, the provisions of the M4Companies Clauses Consolidation Act 1845 or, in the case of a winding up in Scotland, the M5Companies Clauses Consolidation (Scotland) Act 1845 with respect to the settlement of disputes by arbitration are incorporated with this Act, and—

(a)in the construction of those provisions this Act is deemed the special Act and “the company” means the transferor company, and

(b)any appointment by the incorporated provisions directed to be made under the hand of the secretary or any two of the directors may be made in writing by the liquidator (or, if there is more than one liquidator, then any two or more of them).

Modifications etc. (not altering text)

C194S. 111 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

S. 111 modified (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(2), Sch. 3

Marginal Citations

112 Reference of questions to court.E+W+S

(1)The liquidator or any contributory or creditor may apply to the court to determine any question arising in the winding up of a company, or to exercise, as respects the enforcing of calls or any other matter, all or any of the powers which the court might exercise if the company were being wound up by the court.

(2)The court, if satisfied that the determination of the question or the required exercise of power will be just and beneficial, may accede wholly or partially to the application on such terms and conditions as it thinks fit, or may make such other order on the application as it thinks just.

(3)A copy of an order made by virtue of this section staying the proceedings in the winding up shall forthwith be forwarded by the company, or otherwise as may be prescribed, to the registrar of companies, who shall enter it in his records relating to the company.

Modifications etc. (not altering text)

C195S. 112 amended (1.12.2001) by 2000 c. 8, s. 365(2); S.I. 2001/3538, art. 2(1)

S. 112 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C196S. 112(3) amended (1.7.1999) by 1998 c. 46, s. 125, Sch. 8 para. 23(2)(3) (with s. 126(3)-(11)); S.I. 1998/3178, arts. 2, 3

113 Court’s power to control proceedings (Scotland).E+W+S

If the court, on the application of the liquidator in the winding up of a company registered in Scotland, so directs, no action or proceeding shall be proceeded with or commenced against the company except by leave of the court and subject to such terms as the court may impose.

Modifications etc. (not altering text)

C197S. 113 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

114 No liquidator appointed or nominated by company.E+W+S

(1)This section applies where, in the case of a voluntary winding up, no liquidator has been appointed or nominated by the company.

(2)The powers of the directors shall not be exercised, except with the sanction of the court or (in the case of a creditors’ voluntary winding up) so far as may be necessary to secure compliance with sections [F25098 (creditors’ meeting) and] 99 (statement of affairs) [F251and 100(1B) (nomination of liquidator by creditors)] , during the period before the appointment or nomination of a liquidator of the company.

(3)Subsection (2) does not apply in relation to the powers of the directors—

(a)to dispose of perishable goods and other goods the value of which is likely to diminish if they are not immediately disposed of, and

(b)to do all such other things as may be necessary for the protection of the company’s assets.

(4)If the directors of the company without reasonable excuse fail to comply with this section, they are liable to a fine.

Textual Amendments

Modifications etc. (not altering text)

C198S. 114 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

115 Expenses of voluntary winding up.E+W+S

All expenses properly incurred in the winding up, including the remuneration of the liquidator, are payable out of the company’s assets in priority to all other claims.

Modifications etc. (not altering text)

C199S. 115 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

116 Saving for certain rights.E+W+S

The voluntary winding up of a company does not bar the right of any creditor or contributory to have it wound up by the court; but in the case of an application by a contributory the court must be satisfied that the rights of the contributories will be prejudiced by a voluntary winding up.

Chapter VIE+W+S Winding Up by the Court

Jurisdiction (England and Wales)E+W+S

117 High Court and county court jurisdiction.E+W+S

(1)The High Court has jurisdiction to wind up any company registered in England and Wales.

(2)Where [F252in the case of a company registered in England and Wales the amount of its] share capital paid up or credited as paid up does not exceed £120,000, then (subject to this section) the county court F253... has concurrent jurisdiction with the High Court to wind up the company.

[F254(2A)Despite subsection (2), proceedings for the exercise of the jurisdiction to wind up a company registered in England and Wales may be commenced only in the High Court if the place which has longest been the company’s registered office during the 6 months immediately preceding the presentation of the petition for winding up is in the district that is the London insolvency district for the purposes of the second Group of Parts of this Act.]

(3)The money sum for the time being specified in subsection (2) is subject to increase or reduction by order under section 416 in Part XV.

F255(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5)Every court in England and Wales having winding-up jurisdiction has for the purposes of that jurisdiction all the powers of the High Court; and every prescribed officer of the court shall perform any duties which an officer of the High Court may discharge by order of a judge of that court or otherwise in relation to winding up.

F256(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F257(7)This section is subject to Article 3 of the EC Regulation (jurisdiction under EC Regulation).]

[F258(8)The Lord Chief Justice may nominate a judicial office holder (as defined in section 109(4) of the Constitutional Reform Act 2005) to exercise his functions under this section.]

Textual Amendments

F252Words in s. 117(2) substituted (22.4.2014) by Crime and Courts Act 2013 (c. 22), s. 61(3), Sch. 9 para. 93(a)(i); S.I. 2014/954, art. 2(c) (with art. 3) (with transitional provisions and savings in S.I. 2014/956, arts. 3-11)

F253Words in s. 117(2) omitted (22.4.2014) by virtue of Crime and Courts Act 2013 (c. 22), s. 61(3), Sch. 9 para. 93(a)(ii); S.I. 2014/954, art. 2(c) (with art. 3) (with transitional provisions and savings in S.I. 2014/956, arts. 3-11)

F254S. 117(2A) inserted by S.I. 1991/724, Sch. Pt. 1 (as amended) (E.W.) (22.4.2014) by The High Court and County Court Jurisdiction (Amendment) Order 2014 (S.I. 2014/821), arts. 1, 2(10)(a)(ii) (with art. 3)

F255S. 117(4) omitted (22.4.2014) by virtue of Crime and Courts Act 2013 (c. 22), s. 61(3), Sch. 9 para. 93(b); S.I. 2014/954, art. 2(c) (with art. 3) (with transitional provisions and savings in S.I. 2014/956, arts. 3-11)

F256S. 117(6) omitted (22.4.2014) by virtue of Crime and Courts Act 2013 (c. 22), s. 61(3), Sch. 9 para. 93(b); S.I. 2014/954, art. 2(c) (with art. 3) (with transitional provisions and savings in S.I. 2014/956, arts. 3-11)

F257S. 117(7) inserted (31.5.2002) by S.I. 2002/1240, reg. 6

Modifications etc. (not altering text)

C200S. 117 applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 7(3), Sch. 3 Pt. II para. 6

S. 117 applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 8(3)(9), Sch. 4 Pt. II para. 5

S. 117 applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 10(1), Sch. 6 para. 1

S. 117 applied (with modifications) (2.4.2001) by 2000 c. 39, s. 8, Sch. 4 Pt. I para. 5; S.I. 2001/766, art. 2(1)(a) (subject to art. 3)

C201S. 117 modified (1.12.1994) by S.I. 1994/2421, art. 9(a), Sch. 5 para. 1

118 Proceedings taken in wrong court.E+W+S

(1)Nothing in section 117 invalidates a proceeding by reason of its being taken in the wrong court.

(2)The winding up of a company by the court in England and Wales, or any proceedings in the winding up, may be retained in the court in which the proceedings were commenced, although it may not be the court in which they ought to have been commenced.

119 Proceedings in county court; case stated for High Court.E+W+S

(1)If any question arises in any winding-up proceedings in a county court which all the parties to the proceedings, or which one of them and the judge of the court, desire to have determined in the first instance in the High Court, the judge shall state the facts in the form of a special case for the opinion of the High Court.

(2)Thereupon the special case and the proceedings (or such of them as may be required) shall be transmitted to the High Court for the purposes of the determination.

Jurisdiction (Scotland)E+W+S

120 Court of Session and sheriff court jurisdiction.E+W+S

(1)The Court of Session has jurisdiction to wind up any company registered in Scotland.

(2)When the Court of Session is in vacation, the jurisdiction conferred on that court by this section may (subject to the provisions of this Part) be exercised by the judge acting as vacation judge [F259in pursuance of section 4 of the Admnistration of Justice (Scotland) Act 1933].

(3)Where the amount of a company’s share capital paid up or credited as paid up does not exceed £120,000, the sheriff court of the sheriffdom in which the company’s registered office is situated has concurrent jurisdiction with the Court of Session to wind up the company; but—

(a)the Court of Session may, if it thinks expedient having regard to the amount of the company’s assets to do so—

(i)remit to a sheriff court any petition presented to the Court of Session for winding up such a company, or

(ii)require such a petition presented to a sheriff court to be remitted to the Court of Session; and

(b)the Court of Session may require any such petition as above mentioned presented to one sheriff court to be remitted to another sheriff court; and

(c)in a winding up in the sheriff court the sheriff may submit a stated case for the opinion of the Court of Session on any question of law arising in that winding up.

(4)For purposes of this section, the expression “registered office” means the place which has longest been the company’s registered office during the 6 months immediately preceding the presentation of the petition for winding up.

(5)The money sum for the time being specified in subsection (3) is subject to increase or reduction by order under section 416 in Part XV.

[F260(6)This section is subject to Article 3 of the EC Regulation (jurisdiction under EC Regulation).]

Textual Amendments

F260S. 120(6) inserted (31.5.2002) by S.I. 2002/1240, reg. 7

Modifications etc. (not altering text)

C202S. 120 extended (with modifications) by S.I. 1989/638, regs. 19(2), 21

S. 120 applied (with modifications) (2.4.2001) by 2000 c. 39, s. 8, Sch. 4 Pt. I para. 5; S.I. 2001/766, art. 2(1)(a) (subject to art. 3)

121 Power to remit winding up to Lord Ordinary.E+W+S

(1)The Court of Session may, by Act of Sederunt, make provision for the taking of proceedings in a winding up before one of the Lords Ordinary; and, where provision is so made, the Lord Ordinary has, for the purposes of the winding up all the powers and jurisdiction of the court.

(2)However, the Lord Ordinary may report to the Inner House any matter which may arise in the course of a winding up.

Modifications etc. (not altering text)

Grounds and effect of winding-up petitionE+W+S

122 Circumstances in which company may be wound up by the court.E+W+S

(1)A company may be wound up by the court if—

(a)the company has by special resolution resolved that the company be wound up by the court,

(b)being a public company which was registered as such on its original incorporation, the company has not been issued with [F261a trading certificate under section 761 of the Companies Act 2006 (requirement as to minimum share capital)] and more than a year has expired since it was so registered,

(c)it is an old public company, within the meaning of the [F262Schedule 3 to the Companies Act 2006 (Consequential Amendments, Transitional Provisions and Savings) Order 2009],

(d)the company does not commence its business within a year from its incorporation or suspends its business for a whole year;

(e)F263. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(f)the company is unable to pay its debts,

[F264(fa)at the time at which a moratorium for the company under section 1A comes to an end, no voluntary arrangement approved under Part I has effect in relation to the company]

(g)the court is of the opinion that it is just and equitable that the company should be wound up.

(2)In Scotland, a company which the Court of Session has jurisdiction to wind up may be wound up by the Court if there is subsisting a floating charge over property comprised in the company’s property and undertaking, and the court is satisfied that the security of the creditor entitled to the benefit of the floating charge is in jeopardy.

For this purpose a creditor’s security is deemed to be in jeopardy if the Court is satisfied that events have occurred or are about to occur which render it unreasonable in the creditor’s interests that the company should retain power to dispose of the property which is subject to the floating charge.

Textual Amendments

F262Words in s. 122(1)(c) substituted (1.10.2009) by The Companies Act 2006 (Consequential Amendments, Transitional Provisions and Savings) Order 2009, (S.I. 2009/1941) arts. 2(1), 8, {Sch. 1 para. 75(12)} (with art. 10, Sch. 1 para. 84)