Insolvency Act 1986 (c. 45)

Insolvency Act 1986

1986 CHAPTER 45

An Act to consolidate the enactments relating to company insolvency and winding up (including the winding up of companies that are not insolvent, and of unregistered companies); enactments relating to the insolvency and bankruptcy of individuals; and other enactments bearing on those two subject matters, including the functions and qualification of insolvency practitioners, the public administration of insolvency, the penalisation and redress of malpractice and wrongdoing, and the avoidance of certain transactions at an undervalue

[25th July 1986]

Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—

Modifications etc. (not altering text)

C1 Act amended by Social Security Pensions Act 1975 (c. 60), s. 59D(3) (as inserted by Social Security Act 1990 (c. 27), s. 12(1), Sch. 3)

Act amended (25.4.1991) by Companies Act 1989 (c. 40), ss. 154, 155, 158(1), 174(1), 190(6); S.I. 1991/878, art. 2, Sch. (with art. 3(4))

Act amended (29.6.1992) by Social Security Pensions Act 1975 (c. 60), s. 58B(5) (as inserted (29.6.1992) by Social Security Act 1990 (c. 27), s. 14, Sch. 4 Pt. I para. 2; S.I. 1992/1532, art. 2)

Act amended (1.4.1994) by 1993 c. 43, ss. 59(3), 150(1)(c), Sch. 6 Pt. III para. 20(1)-(3); S.I. 1994/571, art. 5 (with transitional provision in art. 7)

Act (except ss. 8-10, 24-26) amended (1.2.2001) by 2000 c. 38, s. 30, Sch. 1 Pt. II para. 13(1)(3) (with ss. 105(2)(5), 106); S.I. 2001/57, art. 3(1), Sch. 2 Pt. I (subject to transitional provision and saving in Sch. 2 Pt. II)

Act amended (1.2.2001) by 2000 c. 38, s. 30, Sch. 1 Pt. II para. 13(2)(3) (with ss. 105(2)(5), 106); S.I. 2001/57, art. 3(1), Sch. 2 Pt. I (subject to transitional provision and saving in Sch. 2 Pt. II)

Act amended (30.12.2002) by 2002 c. 29, s. 311(4); S.I. 2002/3015, art. 2(1), Sch.

C2 Act restricted (E.W.S.) by Drug Trafficking Offences Act 1986 (c. 32), s. 15(3)(7)

Act restricted (25.4.1991) by Companies Act 1989 (c. 40), s. 182(4), Sch. 22 para. 4(2); S.I. 1991/878, art. 2, Sch.

Act restricted (3.2.1995) by 1994 c. 37, ss. 32(4), 69(2), Sch. 2 para. 5 (with s. 66(2))

Act restricted (31.3.1996) by 1995 c. 20, s. 110(1), Sch. 4 para. 2(4); S.I. 1996/517, art. 3(2) (subject to arts. 4-6, Sch. 2)

Act restricted (1.4.1996) by 1995 c. 43, ss. 44, 50(2), Sch. 2 para. 2(4)

Act restricted (6.4.1996 for certain purposes and 6.4.1997 otherwise) by 1995 c. 26, s. 75(8)(a) (with s. 121(5)); S.I. 1996/778, art. 2(5)(a), Sch. Pt. V; S.I. 1997/664, art. 2(3), Sch. Pt. II (with transitional adaptations, modifications and savings in arts. 3-14)

Act restricted (7.10.1996) by 1992 c. 5, ss. 71(10A), 78(3A) (as inserted by 1995 c. 18, s. 32; S.I. 1996/2208, art. 2)

Act restricted (S.) (1.11.2001) by 2001 asp 10, s. 63, Sch. 7 paras. 9(4), 10(6); S.S.I. 2001/336, art. 2(3), Sch. Pt. II (subject to transitional provisions and savings in art. 3)

Act restricted (24.3.2003) by 2002 c. 29, ss. 417(4), 458(1)(3); S.I. 2003/333, art. 2, Sch. (subject to transitional provisions and savings in arts. 3-13 (as amended by S.I. 2003/531, arts. 3, 4))

C3 Act excluded (E.W.S.) by Drug Trafficking Offences Act 1986 (c. 32), ss. 15(5)( a )(7), 17(3)

Act excluded by Criminal Justice (Scotland) Act 1987 (c. 41), ss. 30(6), 34(3)(4), 35(3), 36(3), 47(4)(a)

Act excluded (E.W.) by Dartford-Thurrock Crossing Act 1988 (c. 20), ss. 15(4), 19

Act excluded by Criminal Justice Act 1988 (c. 33), ss. 84(3), 86(3), 123, Sch. 8 para. 16

Act excluded by Social Security Act 1989 (c. 24), s. 22, Sch. 4 Pt. II para. 8(1)

Act excluded (25.4.1991) by Companies Act 1989 (c. 40), ss. 154, 155, 159(2), 180(2); S.I. 1991/878, art. 2, Sch.

Act excluded (13.2.1992) by Severn Bridges Act 1992 (c. 3), s. 20(4)

Act excluded (1.7.1992) by Social Security Administration Act 1992 (c. 5), ss. 89(1), 93(1), 192(4) (with s. 89(1))

Act excluded (31.10.1994) by 1994 c. 21, s. 29(2) (with s. 40(7)); S.I. 1994/2552, art. 2, Sch. 1

Act excluded (3.2.1995) by 1994 c. 37, ss. 32(2), 34(2), 69(2), Sch. 2 para. 5 (with s. 66(2))

Act excluded (31.3.1996) by 1995 c. 20, s. 110(1), Sch. 4 paras. 2(3), 3(3), 4(3); S.I. 1996/517, art. 3(2) (subject to arts. 4-6, Sch. 2)

Act excluded (1.4.1996) by 1995 c. 43, ss. 44, 50(2), Sch. 2 paras. 2(3), 3(3), 4(3)

Act excluded (1.10.1996) by 1996 c. 52, s. 7, Sch. 1 Pt. II para. 15(2); S.I. 1996/2402, art. 3 (subject to transitional provisions and savings in Sch.)

Act excluded (E.W.S.) (11.12.1999) by S.I. 1999/2979, reg. 14(2)

Act excluded (E.W.) (1.9.2001) by 2001 c. 17, s. 38, Sch. 6 paras. 9(3), 11(3) (with s. 78); S.I. 2001/2161, art. 2

Act excluded (S.) (1.11.2001) by 2001 asp 10, s. 63, Sch. 7 para. 12(3); S.S.I. 2001/336, art. 2(3), Sch. Pt. II (subject to transitional provisions and savings in art. 3)

Act excluded (S.) (17.12.2001) by 2001 asp 13, s. 20(b), Sch. 6 paras. 9(3), 10(5); S.S.I. 2001/456, art. 2

Act excluded (24.3.2003) by 2002 c. 29, ss. 418(4), 426(7), 430(7), 458(1)(3); S.I. 2003/333, art. 2, Sch. (subject to transitional provisions and savings in arts. 3-13 (as amended by S.I. 2003/531, arts. 3, 4))

C4 Act modified by Financial Services Act 1986 (c. 60), s. 72(4)

Act modified by S.I. 1986/2142, arts. 1(2), 3(a), 15

Act modified by S.I. 1989/638, regs. 8(1), 21

Act modified (7.2.1994) by 1993 c. 48, ss. 144(7)(a), 147(3) (with s. 6(8)); S.I. 1994/86, art. 2

Act modified (31.10.1994) by 1994 c. 21, s. 36(1) (with s. 40(7)); S.I. 1994/2553, art. 2

Act modified (S.) (1.11.2001) by 2001 asp 10, s. 63, Sch. 7 para. 11; S.S.I. 2001/336, art. 2(3), Sch. Pt. II (subject to transitional provisions and savings in art. 3)

Act modified (E.W.S.) (5.10.2004) by Energy Act 2004 (c. 20), ss. 159, 198, Sch. 20 paras. 41, 42; S.I. 2004/2575, art. 2(1), Sch. 1

Act modified (E.W.) (1.10.2005) by The Energy Administration Rules 2005 (S.I. 2005/2483), rules 3, 184

Act modified (S.) (6.4.2006) by The Energy Administration (Scotland) Rules 2006 (S.I. 2006/772), rules 3, 68

C5 Act applied (with modifications) by S.I. 1986/2142, arts. 1(2), 8(1)(b)(2), 13(3)(4)(6), 15, Sch. 2

Act applied (with modifications) (6.1.1997) by S.I. 1996/2827, reg. 25(1)-(4)

Act applied (with modifications) (1.12.2001) by S.I. 2001/1228, regs. 1(2), 31(1) (with reg. 1(3)); S.I. 2001/3538, art. 2(1)

Act applied (1.12.2001) by 2000 c. 8, s. 367(7); S.I. 2001/3538, art. 2(1)

C6 Act extended by Banking Act 1987 (c. 22), s. 92(2)

Act extended (E.W.) by Water Act 1989 (c. 15), s. 23, Sch. 6 Pt. II para. 11(1)(2)(3) (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)

Act extended (E.W.) (1.12.1991) by Water Industry Act 1991 (c. 56), ss. 23(3), 223(2), Sch. 3 Pt. II paras.11(1)-(3), 12(2) ( with ss. 82(3), 186(1), 222(1), Sch. 14 para. 6).

Act (except s. 413, Sch. 7) extended (E.W.) (1.1.1992) by S.I. 1991/2684, arts. 2(1), 4, Sch.1.

Act extended (1.10.1996) by 1996 c. 52. s. 7, Sch. 1 Pt. II para. 14(1); S.I. 1996/2402, art. 3 (subject to transitional provisions and savings in Sch.)

Act (except ss. 8-10, 24-26) extended (15.7.2003) by 1999 c. 29, s. 220(3), Sch. 14 Pt. III para. 20; S.I. 2003/1920, art. 2

C7 Act: power to modify conferred (2.4.2001) by 2000 c. 39, s. 7(2); S.I. 2001/776, art. 2(1)(a) (subject to transitional provisions in art. 3)

Act: power to apply (with modifications) conferred (E.W.S.) (15.9.2003) by 2002 c. 40, ss. 254(1), 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))

Act: power to amend conferred (E.W.) (1.4.2004) by 2002 c. 40, ss. 264(2), 279 (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))

C8 Act modified (1.8.2007) by The European Grouping of Territorial Cooperation Regulations 2007 (S.I. 2007/1949), reg. 7, Sch. Pt. 2

C9 Act applied (with modifications) (6.4.2008) by Serious Crime Act 2007 (c. 27), ss. 27(2)-(4), 94; S.I. 2008/755, art. 15(1)(f)

C10 Act applied in part (with modifications) (8.10.2008 at 12.15 p.m.) by The Kaupthing Singer & Friedlander Limited Transfer of Certain Rights and Liabilities Order 2008 (S.I. 2008/2674), Pt. 5 (arts. 19-27)

C11 Act applied in part (with modifications) (7.10.2008 at 9.30 a.m.) by The Heritable Bank plc Transfer of Certain Rights and Liabilities Order 2008 (S.I. 2008/2644), Pt. 4 (arts. 18-25)

C12 Act excluded (26.1.2009) by 1998 c. 17 s. 38A(6) (as inserted by Energy Act 2008 (c. 32), ss. 74(1), 110; S.I. 2009/45, art. 2(b)(i))

C13 Act excluded (6.4.2009) by Energy Act 2008 (c. 32), ss. 56(5), 110; S.I. 2009/45, art. 4(b)(i)

C14 Act excluded (E.W.) (1.4.2010) by Housing and Regeneration Act 2008 (c. 17), ss. 167(5)(b), 325; S.I. 2010/862, art. 2 (with Sch.)

C15 Act: power to amend conferred (17.2.2009 for certain purposes, otherwise 21.02.2009) by Banking Act 2009 (c. 1), s. 158(2)(b) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch.

C16 Act: power to amend conferred (17.2.2009 for certain purposes, otherwise 21.02.2009) by Banking Act 2009 (c. 1), s. 159(2)(b) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch.

C17 Act applied in part by S.I. 1989/638, reg. 19 (as amended (1.10.2009) by The European Economic Interest Grouping (Amendment) Regulations 2009 (S.I. 2009/2399), reg. 20 (with reg. 2))

C18 Act applied (1.11.2009) by The Water Industry (Special Administration) Rules 2009 (S.I. 2009/2477), rule 102 (with rules 3(2), 4)

C19 Act applied (with modifications) (23.11.2009) by The Scottish and Northern Ireland Banknote Regulations 2009 (S.I. 2009/3056), reg. 29, Sch. 1 para. 2

C20 Act: power to modify conferred (E.W.) (1.10.2010 for specified purposes) by Flood and Water Management Act 2010 (c. 29), ss. 34, 49(3), Sch. 5 para. 3 (with s. 49(1)(6)); S.I. 2010/2169, art. 4, Sch.

C21 Act applied (with modifications) (8.2.2011) by The Investment Bank Special Administration Regulations 2011 (S.I. 2011/245), regs. 8(7), 9, 15, 16-21, 24, 25, Schs. 1-4 (as amended (1.4.2013) by The Financial Services Act 2012 (Consequential Amendments and Transitional Provisions) Order 2013 (S.I. 2013/472), Sch. 2 para. 198(i)(n) (with Sch. 2 para. 213); (7.4.2017) by The Deregulation Act 2015, the Small Business, Enterprise and Employment Act 2015 and the Insolvency (Amendment) Act (Northern Ireland) 2016 (Consequential Amendments and Transitional Provisions) Regulations 2017 (S.I. 2017/400), reg. 10); (28.11.2017) by The Central Securities Depositories Regulations 2017 (S.I. 2017/1064), reg. 1, Sch. para. 36(4) (with regs. 7(4), 9(1)); and (13.3.2018) by The Small Business, Enterprise and Employment Act 2015 (Consequential Amendments, Savings and Transitional Provisions) Regulations 2018 (S.I. 2018/208), reg. 13)

C22 Act modified (30.6.2011) by The Investment Bank Special Administration (England and Wales) Rules 2011 (S.I. 2011/1301), rule 334 (with rule 5(2))

C23 Act modified (1.10.2011) by Postal Services Act 2011 (c. 5), ss. 73, 93(2)(3), Sch. 10 paras. 40, 41; S.I. 2011/2329, art. 3 (with arts. 4, 5)

C24 Act: power to modify conferred (1.10.2011) by Postal Services Act 2011 (c. 5), ss. 73, 93(2)(3), Sch. 10 para. 46; S.I. 2011/2329, art. 3 (with arts. 4, 5)

C25 Act applied in part (with modifications) (23.12.2011) by The Legal Services Act 2007 (Designation as a Licensing Authority) (No. 2) Order 2011 (S.I. 2011/2866), art. 8(1), Sch. 2

C26 Act excluded (S.) (1.4.2012) by Housing (Scotland) Act 2010 (asp 17), ss. 106(7)(b), 166(2); S.S.I. 2012/39, art. 2, sch. 1 (with sch. 2) (as amended (1.4.2012) by S.S.I. 2012/91, art. 4)

C27 Act modified (7.6.2013) by The Energy Supply Company Administration Rules 2013 (S.I. 2013/1046), rules 1, 205(2)-(4) (with rules 3, 208)

C28 Act modified (31.1.2014) by The Postal Administration Rules 2013 (S.I. 2013/3208), rule 206 (with rules 3, 210)

C29 Act excluded (10.1.2015) by The Bank Recovery and Resolution (No. 2) Order 2014 (S.I. 2014/3348), art. 217

C30 Act applied (with modifications) (31.7.2015) by The European Grouping of Territorial Cooperation Regulations 2015 (S.I. 2015/1493), reg. 8(2) (with reg. 11)

C31 Act: power to apply (with or without modifications) conferred by 2007 c. 27, s. 27A(7) (as inserted (1.3.2016) by Serious Crime Act 2015 (c. 9), s. 88(1), Sch. 1 para. 20; S.I. 2016/148, reg. 3(f))

C32 Act applied by 2007 c. 27, s. 27A(2) (as inserted (1.3.2016) by Serious Crime Act 2015 (c. 9), s. 88(1), Sch. 1 para. 20; S.I. 2016/148, reg. 3(f))

C33 Act modified by The Insolvent Partnerships Order 1994 (S.I. 1994/2421), Sch. 4 (as amended (6.4.2017) by The Deregulation Act 2015 and Small Business, Enterprise and Employment Act 2015 (Consequential Amendments) (Savings) Regulations 2017 (S.I. 2017/540), Sch. 2 para. 8 (with reg. 4))

C34 Act modified by The Insolvent Partnerships Order 1994 (S.I. 1994/2421), Sch. 7 (as amended (6.4.2017) by The Deregulation Act 2015 and Small Business, Enterprise and Employment Act 2015 (Consequential Amendments) (Savings) Regulations 2017 (S.I. 2017/540), Sch. 2 para. 9 (with reg. 4))

C35 Act applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), reg. 1, Sch. 2 (with reg. 24) (as amended (7.4.2017) by The Deregulation Act 2015, the Small Business, Enterprise and Employment Act 2015 and the Insolvency (Amendment) Act (Northern Ireland) 2016 (Consequential Amendments and Transitional Provisions) Regulations 2017 (S.I. 2017/400), reg. 11(2); and (13.3.2018) by The Small Business, Enterprise and Employment Act 2015 (Consequential Amendments, Savings and Transitional Provisions) Regulations 2018 (S.I. 2018/208), regs. 1(3), 14)

C36 Act modified by 1986 c. 46, s. 22H(4)(g) (as inserted (8.12.2017) by The Risk Transformation Regulations 2017 (S.I. 2017/1212), reg. 1(2), Sch. 4 para. 3 (with reg. 189))

C37 Act applied (with modifications) (8.12.2017) by The Risk Transformation Regulations 2017 (S.I. 2017/1212), regs. 1(2), 166(2), 167(2), Sch. 2, Sch. 3 (with regs. 168, 189)

C38 Act modified by S.I. 2012/3013, Sch. 2 para. 34 (as inserted (4.7.2018) by The Insolvency of Registered Providers of Social Housing Regulations 2018 (S.I. 2018/728), regs. 1, 3(6), Sch. 2)

C39 Act modified in part (5.7.2018) by Housing and Planning Act 2016 (c. 22), s. 216(3), Sch. 5 para. 39 (with Sch. 5 para. 40); S.I. 2018/805, reg. 3(b)

C40 Act: power to modify conferred (5.7.2018) by Housing and Planning Act 2016 (c. 22), s. 216(3), Sch. 5 para. 45(2); S.I. 2018/805, reg. 3(b)

C41 Act specified provisions applied (with modifications) (13.7.2018 for E.W.) by Financial Services (Banking Reform) Act 2013 (c. 33), s. 148(5), Sch. 6 para. 5 (as amended by S.I. 2017/400, regs. 1(2), 6(a)(b) and S.I. 2018/208, regs. 1(3), 6(b)); S.I. 2018/848, art. 2(b)

C42 Act power to modify or exclude conferred (31.1.2019) by Technical and Further Education Act 2017 (c. 19), ss. 6(2)(a)(3)(4), 47(2); S.I. 2018/1161, reg. 3(a)

C43 Act modified in part (31.1.2019) by The Further Education Bodies (Insolvency) Regulations 2019 (S.I. 2019/138), regs. 4-6 (with regs. 1(2), 3(a)(i))

C44 Act excluded (31.1.2019) by The Education Administration Rules 2018 (S.I. 2018/1135), rules 1.1, 4.10(2) (with rule 1.2)

C45 Act applied in part (with modifications) (31.1.2019) by Technical and Further Education Act 2017 (c. 19), ss. 6(2)(b)(3), 9-12, 47(2); S.I. 2018/1161, reg. 3(a)

C46 Act applied (with modifications) (23.7.2019) by The Small Business, Enterprise and Employment Act 2015 (Consequential Amendments, Savings and Transitional Provisions) Regulations 2019 (S.I. 2019/1058), regs. 1, 14

C47 Act modified (1.8.2020) by The Smart Meter Communication Licensee Administration (England and Wales) Rules 2020 (S.I. 2020/629), rules 1, 3(2)-(4) (with rule 4(1))

C48 Act modified (12.11.2021) by The Payment and Electronic Money Institution Insolvency (England and Wales) Rules 2021 (S.I. 2021/1178), rules 2, 295

C49 Act modified (S.) (19.12.2022) by The Payment and Electronic Money Institution Insolvency (Scotland) Rules 2022 (S.I. 2022/1239), rules 2, 206

C50 Act: power to apply (with modifications) conferred (29.8.2023) by Financial Services and Markets Act 2023 (c. 29), s. 86(3), Sch. 11 para. 165; S.I. 2023/779, reg. 4(ddd)(xiv)

C51 Act power to apply and modify conferred (26.12.2023) by Energy Act 2023 (c. 52), ss. 48, 334(3)(a)

C52 Act: power to modify conferred (1.10.2010 for specified purposes, 12.1.2024 in so far as not already in force) by 1991 c. 56, s. 23(2E)-(2G) (as inserted by Flood and Water Management Act 2010 (c. 29), s. 49(3), Sch. 5 para. 3 (with s. 49(1)(6)); S.I. 2010/2169, art. 4, Sch.; S.I. 2024/35, art. 2(b))

Commencement Information

I1 Act not in force at Royal Assent, see s. 443

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

Modifications etc. (not altering text)

C53 First 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. (as amended (1.4.2013) by The Financial Services Act 2012 (Consequential Amendments and Transitional Provisions) Order 2013 (S.I. 2013/472), art. 1(1), Sch. 2 para. 117; and (13.3.2018) by The Small Business, Enterprise and Employment Act 2015 (Consequential Amendments, Savings and Transitional Provisions) Regulations 2018 (S.I. 2018/208), regs. 1(3), 11)

C54 Pts. 1-4 applied (with modifications) in part (2.1.2013) by The Charitable Incorporated Organisations (Insolvency and Dissolution) Regulations 2012 (S.I. 2012/3013), reg. 1, Sch. paras. 1(2)(a)(3)-(7)

[F1 Part A1 U.K. Moratorium

Textual Amendments

F1 Pt. A1 inserted (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), ss. 1(1), 49(1) (with ss. 2(2), 5(2))

Modifications etc. (not altering text)

C55 Pt. A1 excluded by S.I. 2012/3013, Sch. 1 para. 1(2A) (as inserted (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 3 para. 49(4) (with ss. 2(2), 5(2)))

C56 Pt. A1 power to apply (with modifications) conferred by 2011 c. 25, s. 247A (as inserted (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 3 para. 45 (with ss. 2(2), 5(2)))

C57 Pt. A1 applied (with modifications) by S.I. 2014/229, art. 2(A1), Sch. 1 para. 1(2), Pt. 1A (as inserted (18.7.2020) by The Co-operative and Community Benefit Societies and Credit Unions (Arrangements, Reconstructions and Administration) (Amendment) and Consequential Amendments Order 2020 (S.I. 2020/744), arts. 1, 7(b), 11(b)(c))

C58 Pt. A1 applied (with modifications) (E.W.S.) (3.9.2020) by The Insolvency (Moratorium) (Special Administration for Energy Licensees) Regulations 2020 (S.I. 2020/943), regs. 1(2), 2-10

Chapter 1 U.K. Introductory

A1 Overview U.K.

(1) This Part contains provision that enables an eligible company, in certain circumstances, to obtain a moratorium, giving it various protections from creditors set out in this Part.

(2) In this Chapter section A2 introduces Schedule ZA1 (which defines what is meant by an “eligible” company).

(3) Chapter 2 sets out how an eligible company may obtain a moratorium.

(4) Chapter 3 sets out for how long a moratorium has effect.

(5) Chapter 4 sets out the effects of a moratorium on the company and its creditors.

(6) Chapter 5 contains provision about the monitor.

(7) Chapter 6 contains provision about challenges.

(8) Chapter 7 contains provision about certain offences.

(9) Chapter 8 contains miscellaneous and general provision, including—

(a) special provision for certain kinds of company;

(b) definitions for the purposes of this Part;

(c) provision about regulations under this Part.

A2 Eligible companies U.K.

Schedule ZA1 contains provision for determining whether a company is an eligible company for the purposes of this Part.

Chapter 2 U.K. Obtaining a moratorium

A3 Obtaining a moratorium by filing or lodging documents at court U.K.

(1) This section applies to an eligible company that—

(a) is not subject to an outstanding winding-up petition, and

(b) is not an overseas company.

(2) The directors of the company may obtain a moratorium for the company by filing the relevant documents with the court (for the relevant documents, see section A6).

(3) For the purposes of this Chapter a company is “subject to an outstanding winding-up petition” if—

(a) a petition for the winding up of the company has been presented, and

(b) the petition has not been withdrawn or determined.

Modifications etc. (not altering text)

C59 S. A3 modified (temp.) (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 4 para. 5 (with ss. 2(2), 5(2), Sch. 4 para. 1)

C60 S. A3 modified (temp.) (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 4 para. 6(1)(a) (with ss. 2(2), 5(2), Sch. 4 para. 1)

A4 Obtaining a moratorium for company subject to winding-up petition U.K.

(1) This section applies to an eligible company that is subject to an outstanding winding-up petition.

(2) The directors of the company may apply to the court for a moratorium for the company.

(3) The application must be accompanied by the relevant documents (for the relevant documents, see section A6).

(4) On hearing the application the court may—

(a) make an order that the company should be subject to a moratorium, or

(b) make any other order which the court thinks appropriate.

(5) The court may make an order under subsection (4)(a) only if it is satisfied that a moratorium for the company would achieve a better result for the company’s creditors as a whole than would be likely if the company were wound up (without first being subject to a moratorium).

Modifications etc. (not altering text)

C61 S. A4 modified (temp.) (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 4 para. 5 (with ss. 2(2), 5(2), Sch. 4 para. 1)

C62 S. A4 modified (temp.) (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 4 para. 6(2) (with ss. 2(2), 5(2), Sch. 4 para. 1)

A5 Obtaining a moratorium for other overseas companies U.K.

(1) This section applies to an eligible company that—

(a) is not subject to an outstanding winding-up petition, and

(b) is an overseas company.

(2) The directors of the company may apply to the court for a moratorium for the company.

(3) The application must be accompanied by the relevant documents (for the relevant documents, see section A6).

(4) On hearing the application the court may—

(a) make an order that the company should be subject to a moratorium, or

(b) make any other order which the court thinks appropriate.

Modifications etc. (not altering text)

C63 S. A5 modified (temp.) (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 4 para. 5 (with ss. 2(2), 5(2), Sch. 4 para. 1)

A6 The relevant documents U.K.

(1) For the purposes of this Chapter, “the relevant documents” are—

(a) a notice that the directors wish to obtain a moratorium,

(b) a statement from a qualified person (“the proposed monitor”) that the person—

(i) is a qualified person, and

(ii) consents to act as the monitor in relation to the proposed moratorium,

(c) a statement from the proposed monitor that the company is an eligible company,

(d) a statement from the directors that, in their view, the company is, or is likely to become, unable to pay its debts, and

(e) a statement from the proposed monitor that, in the proposed monitor’s view, it is likely that a moratorium for the company would result in the rescue of the company as a going concern.

(2) Where it is proposed that more than one person should act as the monitor in relation to the proposed moratorium—

(a) each of them must make a statement under subsection (1)(b), (c) and (e), and

(b) the statement under subsection (1)(b) must specify—

(i) which functions (if any) are to be exercised by the persons acting jointly, and

(ii) which functions (if any) are to be exercised by any or all of the persons.

(3) The rules may make provision about the date on which a statement comprised in the relevant documents must be made.

(4) The Secretary of State may by regulations amend this section for the purposes of adding to the list of documents in subsection (1).

(5) Regulations under subsection (4) are subject to the affirmative resolution procedure.

Modifications etc. (not altering text)

C64 S. A6(1)(e) modified (temp.) (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 4 para. 6(1)(b) (with ss. 2(2), 5(2), Sch. 4 para. 1)

C65 S. A6(1)(e) modified (temp.) (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 4 para. 7(a) (with ss. 2(2), 5(2), Sch. 4 para. 1)

A7 Beginning of moratorium and appointment of monitor U.K.

(1) A moratorium for a company comes into force at the time at which—

(a) in the case of a company to which section A3 applies, the relevant documents are filed with the court under subsection (2) of that section;

(b) in the case of a company to which section A4 applies, an order is made under section A4(4)(a);

(c) in the case of a company to which section A5 applies, an order is made under section A5(4)(a).

(2) On the coming into force of a moratorium, the person or persons who made the statement mentioned in section A6(1)(b) become the monitor in relation to the moratorium.

A8 Obligations to notify where moratorium comes into force U.K.

(1) As soon as reasonably practicable after a moratorium for a company comes into force, the directors must notify the monitor of that fact.

(2) As soon as reasonably practicable after receiving a notice under subsection (1), the monitor must notify the following that a moratorium for the company has come into force—

(a) the registrar of companies,

(b) every creditor of the company of whose claim the monitor is aware,

(c) in a case where the company is or has been an employer in respect of an occupational pension scheme that is not a money purchase scheme, the Pensions Regulator, and

(d) in a case where the company is an employer in respect of such a pension scheme that is an eligible scheme within the meaning given by section 126 of the Pensions Act 2004, the Board of the Pension Protection Fund.

(3) A notice under subsection (2) must specify—

(a) when the moratorium came into force, and

(b) when, subject to any alteration under or by virtue of any of the provisions mentioned in section A9(3) or (4), the moratorium will come to an end.

(4) If the directors fail to comply with subsection (1), any director who did not have a reasonable excuse for the failure commits an offence.

(5) If the monitor without reasonable excuse fails to comply with subsection (2), the monitor commits an offence.

Chapter 3 U.K. Length of moratorium

Initial period U.K.

A9 End of the moratorium U.K.

(1) A moratorium ends at the end of the initial period unless it is extended, or comes to an end sooner, under or by virtue of a provision mentioned in subsection (3) or (4).

(2) In this Chapter “the initial period”, in relation to a moratorium, means the period of 20 business days beginning with the business day after the day on which the moratorium comes into force.

(3) For provision under or by virtue of which a moratorium is or may be extended, see—

• section A10 (extension by directors without creditor consent);

• section A11 (extension by directors with creditor consent);

• section A13 (extension by court on application of directors);

• section A14 (extension while proposal for CVA pending);

• section A15 (extension by court in course of other proceedings).

(4) For provision under or by virtue of which the moratorium is or may be terminated, see—

• section A16 (termination on entry into insolvency procedure etc);

• section A38 (termination by monitor);

• section A42 or A44 (termination by court).

(5) A moratorium may not be extended under a provision mentioned in subsection (3) once it has come to an end.

(6) Where the application of two or more of the provisions mentioned in subsections (3) and (4) would produce a different length of moratorium, the provision that applies last is to prevail (irrespective of whether that results in a shorter or longer moratorium).

Extension of moratorium U.K.

A10 Extension by directors without creditor consent U.K.

(1) During the initial period, but after the first 15 business days of that period, the directors may extend the moratorium by filing with the court—

(a) a notice that the directors wish to extend the moratorium,

(b) a statement from the directors that all of the following that have fallen due have been paid or otherwise discharged—

(i) moratorium debts, and

(ii) pre-moratorium debts for which the company does not have a payment holiday during the moratorium (see section A18),

(c) a statement from the directors that, in their view, the company is, or is likely to become, unable to pay its pre-moratorium debts, and

(d) a statement from the monitor that, in the monitor’s view, it is likely that the moratorium will result in the rescue of the company as a going concern.

(2) The rules may make provision about the date on which a statement mentioned in subsection (1) must be made.

(3) On the filing with the court of the documents mentioned in subsection (1), the moratorium is extended so that it ends at the end of the period—

(a) beginning immediately after the initial period ends, and

(b) ending with the 20th business day after the initial period ends.

Modifications etc. (not altering text)

C66 S. A10(1)(d) modified (temp.) (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 4 para. 8(2) (with ss. 2(2), 5(2), Sch. 4 para. 1)

A11 Extension by directors with creditor consent U.K.

(1) At any time after the first 15 business days of the initial period the directors may, if they have obtained creditor consent, extend the moratorium by filing with the court—

(a) a notice that the directors wish to extend the moratorium,

(b) a statement from the directors that all of the following that have fallen due have been paid or otherwise discharged—

(i) moratorium debts, and

(ii) pre-moratorium debts for which the company does not have a payment holiday during the moratorium (see section A18),

(c) a statement from the directors that, in their view, the company is, or is likely to become, unable to pay its pre-moratorium debts,

(d) a statement from the monitor that, in the monitor’s view, it is likely that the moratorium will result in the rescue of the company as a going concern, and

(e) a statement from the directors that creditor consent has been obtained, and of the revised end date for which that consent was obtained.

(2) The rules may make provision about the date on which a statement mentioned in subsection (1) must be made.

(3) On the filing with the court of the documents mentioned in subsection (1), the moratorium is extended so that it ends with the revised end date mentioned in the statement under subsection (1)(e).

(4) A moratorium may be extended under this section more than once.

Modifications etc. (not altering text)

C67 S. A11(1)(d) modified (temp.) (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 4 para. 8(2) (with ss. 2(2), 5(2), Sch. 4 para. 1)

A12 Creditor consent for the purposes of section A11 U.K.

(1) References in section A11 to creditor consent are to the consent of pre-moratorium creditors to a revised end date for the moratorium.

(2) The decision as to consent is to be made using a qualifying decision procedure.

(3) The revised end date must be a date before the end of the period of one year beginning with the first day of the initial period.

(4) In this section “pre-moratorium creditor” means a creditor in respect of a pre-moratorium debt—

(a) for which the company has a payment holiday during the moratorium (see section A18), and

(b) which has not been paid or otherwise discharged.

(5) In determining for the purposes of subsection (4) what counts as a pre-moratorium debt for which the company has a payment holiday during the moratorium, sections A18(3) and A53(1)(b) apply as if the references to the moratorium were to the moratorium as proposed to be extended.

(6) The Secretary of State may by regulations amend this section for the purposes of changing the definition of “pre-moratorium creditor”.

(7) Regulations under subsection (6) are subject to the affirmative resolution procedure.

A13 Extension by court on application of directors U.K.

(1) At any time after the first 15 business days of the initial period, the directors may apply to the court for an order that the moratorium be extended.

(2) The application must be accompanied by—

(a) a statement from the directors that all of the following that have fallen due have been paid or otherwise discharged—

(i) moratorium debts, and

(ii) pre-moratorium debts for which the company does not have a payment holiday during the moratorium (see section A18),

(b) a statement from the directors that, in their view, the company is, or is likely to become, unable to pay its pre-moratorium debts,

(c) a statement from the directors as to whether pre-moratorium creditors (as defined by section A12(4) and (5)) have been consulted about the application and if not why not, and

(d) a statement from the monitor that, in the monitor’s view, it is likely that the moratorium will result in the rescue of the company as a going concern.

(3) The rules may make provision about the date on which a statement mentioned in subsection (2) must be made.

(4) On hearing the application the court may—

(a) make an order that the moratorium be extended to such date as is specified in the order, or

(b) make any other order which the court thinks appropriate.

(5) In deciding whether to make an order under subsection (4)(a) the court must, in particular, consider the following—

(a) the interests of pre-moratorium creditors, as defined by section A12(4) and (5), and

(b) the likelihood that the extension of the moratorium will result in the rescue of the company as a going concern.

(6) Subsection (7) applies where—

(a) an application under this section is made, and

(b) apart from that subsection, the moratorium would end at a time before the application has been disposed of.

(7) The moratorium—

(a) does not end at the time mentioned in subsection (6)(b), and

(b) instead, ends—

(i) in a case in which the court makes an order under subsection (4)(a), in accordance with the order;

(ii) otherwise, when the application is withdrawn or disposed of.

(8) A moratorium may be extended under this section more than once.

Modifications etc. (not altering text)

C68 S. A13(2)(d) modified (temp.) (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 4 para. 8(3) (with ss. 2(2), 5(2), Sch. 4 para. 1)

A14 Extension while proposal for CVA pending U.K.

(1) Subsection (2) applies where—

(a) at any time, the directors make a proposal under Part 1 (company voluntary arrangements), and

(b) apart from that subsection, the moratorium would end at a time before the proposal is disposed of.

(2) The moratorium—

(a) does not end at the time mentioned in subsection (1)(b), and

(b) instead, ends when the proposal is disposed of.

(3) For the purposes of this section a proposal under Part 1 is “disposed of” when any of the following takes place—

(a) the company and its creditors both decide under section 4 not to approve the voluntary arrangement contained in the proposal;

(b) the decisions taken by the company and its creditors under section 4 differ, and—

(i) the period for making an application under section 4A(3) expires and either no application has been made within that period or any application made within that period has been withdrawn, or

(ii) an application is made under section 4A(3) and that application is disposed of, or it is withdrawn after the expiry of the period for making an application under section 4A(3);

(c) the voluntary arrangement contained in the proposal takes effect under section 5;

(d) the proposal is withdrawn.

A15 Extension by court in the course of other proceedings U.K.

(1) Subsection (2) applies where—

(a) an application is made under section 896 or 901C(1) of the Companies Act 2006 (arrangements and reconstructions: court order for holding of meeting) in respect of a company, and

(b) during proceedings before a court in connection with the application, a moratorium for the company is in force.

(2) The court may make an order that the moratorium be extended to such date as is specified in the order.

Early termination on certain grounds U.K.

A16 Company enters into insolvency procedure etc U.K.

(1) A moratorium comes to an end at any time at which the company—

(a) enters into a compromise or arrangement (see subsection (2)), or

(b) enters into a relevant insolvency procedure (see subsection (3)).

(2) For the purposes of this section a company enters into a compromise or arrangement if an order under section 899 or 901F of the Companies Act 2006 (court sanction for compromise or arrangement) comes into effect in relation to the company.

(3) For the purposes of this section a company enters into a relevant insolvency procedure if—

(a) a voluntary arrangement takes effect under section 5 in relation to the company,

(b) the company enters administration (within the meaning of Schedule B1 (see paragraph 1(2)(b) of that Schedule)),

(c) paragraph 44 of Schedule B1 (administration: interim moratorium) begins to apply in relation to the company, or

(d) the company goes into liquidation (see section 247).

Modifications etc. (not altering text)

C69 S. A16 applied (with modifications) (E.W.) (15.3.2024) by The Water Industry (Special Administration) Regulations 2024 (S.I. 2024/205), regs. 2(2), 5(1), 42 (with reg. 64)

Obligations to notify change in end of moratorium U.K.

A17 Obligations to notify change in end of moratorium U.K.

(1) The table imposes obligations on the directors of a company to notify the monitor where a moratorium for the company is extended or comes to an end.

	Where a moratorium is extended or comes to an end under or by virtue of the following provision	the directors must
1	Section A10	Notify the monitor of the extension.
2	Section A11	Notify the monitor of the extension and of the revised end date.
3	Section A13(4)	Notify the monitor of the extension and provide the monitor with the court order under section A13(4).
4	Section A13(7)(a)	Notify the monitor of the extension.
5	Section A13(7)(b)(ii)	Notify the monitor that the moratorium has come to an end and of the date that it ended.
6	Section A14(2)(a)	Notify the monitor of the extension.
7	Section A14(2)(b)	Notify the monitor that the moratorium has come to an end and of the date that it ended.
8	Section A15	Notify the monitor of the extension and provide the monitor with any court order under section A15.
9	Section A16	Notify the monitor that the moratorium has come to an end.
10	Section A42	Notify the monitor that the moratorium has come to an end and provide the monitor with the court order under section A42.
11	Section A44	Notify the monitor that the moratorium has come to an end and provide the monitor with the court order under section A44.

(2) After receiving a notice under subsection (1), other than a notice under entry 4 or 6 of the table, the monitor must notify the relevant persons of when the moratorium ended or, subject to any alteration under or by virtue of any of the provisions mentioned in section A9(3) or (4), the moratorium will come to an end.

(3) After receiving a notice under entry 4 or 6 of the table, the monitor must notify the relevant persons.

(4) If a moratorium comes to an end under section A38 (termination by monitor), the monitor must notify the company and the relevant persons of when the moratorium ended.

(5) The rules may—

(a) make further provision about the timing of a notice required to be given under this section;

(b) require a notice to be accompanied by other documents.

(6) If the directors fail to comply with subsection (1), any director who did not have a reasonable excuse for the failure commits an offence.

(7) If the monitor without reasonable excuse fails to comply with any of subsections (2) to (4), the monitor commits an offence.

(8) In this section “the relevant persons” means—

(a) the registrar of companies,

(b) every creditor of the company of whose claim the monitor is aware,

(c) in a case where the company is or has been an employer in respect of an occupational pension scheme that is not a money purchase scheme, the Pensions Regulator, and

(d) in a case where the company is an employer in respect of such a pension scheme that is an eligible scheme within the meaning given by section 126 of the Pensions Act 2004, the Board of the Pension Protection Fund.

Chapter 4 U.K. Effects of moratorium

Introductory U.K.

A18 Overview and construction of references to payment holidays U.K.

(1) This Chapter makes provision about the main effects of a moratorium for a company.

(2) The provision made by this Chapter includes restrictions on the enforcement or payment of the debts that are defined by subsection (3) as pre-moratorium debts for which a company has a payment holiday during a moratorium.

(3) In this Part a reference to pre-moratorium debts for which a company has a payment holiday during a moratorium is to its pre-moratorium debts that have fallen due before the moratorium, or that fall due during the moratorium, except in so far as they consist of amounts payable in respect of—

(a) the monitor’s remuneration or expenses,

(b) goods or services supplied during the moratorium,

(c) rent in respect of a period during the moratorium,

(d) wages or salary arising under a contract of employment,

(e) redundancy payments, or

(f) debts or other liabilities arising under a contract or other instrument involving financial services.

(4) The rules may make provision as to what is, or is not, to count as the supply of goods or services for the purposes of subsection (3)(b).

(5) The Secretary of State may by regulations amend this section for the purposes of changing the list in subsection (3).

(6) Regulations under subsection (5) are subject to the affirmative resolution procedure.

(7) In this section—

• “contract or other instrument involving financial services” has the meaning given by Schedule ZA2;

• “monitor’s remuneration or expenses” does not include remuneration in respect of anything done by a proposed monitor before the moratorium begins;

• “redundancy payment” means—

  (a)

  a redundancy payment under Part 11 of the Employment Rights Act 1996 or Part 12 of the Employment Rights (Northern Ireland) Order 1996, or

  (b)

  a payment made to a person who agrees to the termination of their employment in circumstances where they would have been entitled to a redundancy payment under that Part if dismissed;

• “wages or salary” includes—

  (a)

  a sum payable in respect of a period of holiday (for which purpose the sum is to be treated as relating to the period by reference to which the entitlement to holiday accrued),

  (b)

  a sum payable in respect of a period of absence through illness or other good cause,

  (c)

  a sum payable in lieu of holiday, and

  (d)

  a contribution to an occupational pension scheme.

Publicity about moratorium U.K.

A19 Publicity about moratorium U.K.

(1) During a moratorium, the company must, in any premises—

(a) where business of the company is carried on, and

(b) to which customers of the company or suppliers of goods or services to the company have access,

display, in a prominent position so that it may easily be read by such customers or suppliers, a notice containing the required information.

(2) During a moratorium, any websites of the company must state the required information.

(3) During a moratorium, every business document issued by or on behalf of the company must state the required information.

(4) For the purposes of subsections (1), (2) and (3), “the required information” is—

(a) that a moratorium is in force in relation to the company, and

(b) the name of the monitor.

(5) If subsection (1), (2) or (3) is contravened—

(a) the company commits an offence, and

(b) any officer of the company who without reasonable excuse authorised or permitted the contravention commits an offence.

(6) In this section “business document” means—

(a) an invoice,

(b) an order for goods or services,

(c) a business letter, and

(d) an order form,

whether in hard copy, electronic or any other form.

Effect on creditors etc U.K.

A20 Restrictions on insolvency proceedings etc U.K.

(1) During a moratorium—

(a) no petition may be presented for the winding up of the company, except by the directors,

(b) no resolution may be passed for the voluntary winding up of the company under section 84(1)(a),

(c) a resolution for the voluntary winding up of the company under section 84(1)(b) may be passed only if the resolution is recommended by the directors,

(d) no order may be made for the winding up of the company, except on a petition by the directors,

(e) no administration application may be made in respect of the company, except by the directors,

(f) no notice of intention to appoint an administrator of the company under paragraph 14 or 22(1) of Schedule B1 may be filed with the court,

(g) no administrator of the company may be appointed under paragraph 14 or 22(1) of Schedule B1, and

(h) no administrative receiver of the company may be appointed.

(2) Subsection (1)(a) does not apply to an excepted petition; and subsection (1)(d) does not apply to an order on an excepted petition.

(3) For these purposes, “excepted petition” means a petition under—

(a) section 124A, 124B or 124C, or

(b) section 367 of the Financial Services and Markets Act 2000 on the ground mentioned in subsection (3)(b) of that section.

A21 Restrictions on enforcement and legal proceedings U.K.

(1) During a moratorium—

(a) a landlord or other person to whom rent is payable may not exercise a right of forfeiture by peaceable re-entry in relation to premises let to the company, except with the permission of the court,

(b) in Scotland, a landlord or other person to whom rent is payable may not exercise a right of irritancy in relation to premises let to the company, except with the permission of the court,

(c) no steps may be taken to enforce any security over the company’s property except—

(i) steps to enforce a collateral security charge (within the meaning of the Financial Markets and Insolvency (Settlement Finality) Regulations 1999 (S.I. 1999/2979)),

(ii) steps to enforce security created or otherwise arising under a financial collateral arrangement (within the meaning of regulation 3 of the Financial Collateral Arrangements (No. 2) Regulations 2003 (S.I. 2003/3226)), or

(iii) steps taken with the permission of the court,

(d) no steps may be taken to repossess goods in the company’s possession under any hire-purchase agreement, except with the permission of the court, and

(e) no legal process (including legal proceedings, execution, distress or diligence) may be instituted, carried out or continued against the company or its property except—

(i) employment tribunal proceedings or any legal process arising out of such proceedings,

(ii) proceedings, not within sub-paragraph (i), involving a claim between an employer and a worker, or

(iii) a legal process instituted, carried out or continued with the permission of the court.

(2) An application may not be made for permission under subsection (1) for the purposes of enforcing a pre-moratorium debt for which the company has a payment holiday during the moratorium.

(3) An application may not be made for permission under subsection (1)(c), (d) or (e) with a view to obtaining—

(a) the crystallisation of a floating charge, or

(b) the imposition, by virtue of provision in an instrument creating a floating charge, of any restriction on the disposal of any property of the company.

(4) Permission of the court under subsection (1) may be given subject to conditions.

(5) Subsection (1)(c)(iii) is subject to section A23(1).

(6) In this section—

• “agency worker” has the meaning given by section 13(2) of the Employment Relations Act 1999;

• “employer”—

  (a)

  in relation to an agency worker, has the meaning given by section 13(2) of the Employment Relations Act 1999;

  (b)

  otherwise, has the meaning given by section 230(4) of the Employment Rights Act 1996;

• “worker” means an individual who is—

  (a)

  a worker within the meaning of section 230(3) of the Employment Rights Act 1996, or

  (b)

  an agency worker.

Modifications etc. (not altering text)

C70 A21 excluded by S.I. 2015/912, reg. 37(12A)(c) (as inserted (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 3 para. 55(4) (with ss. 2(2), 5(2)))

A22 Floating charges U.K.

(1) This section applies where there is an uncrystallised floating charge on the property of a company for which a moratorium is in force.

(2) During the moratorium, the holder of the floating charge may not give any notice which would have the effect of—

(a) causing the floating charge to crystallise, or

(b) causing the imposition, by virtue of provision in the instrument creating the charge, of any restriction on the disposal of property of the company.

(3) No other event occurring during the moratorium is to have the effect mentioned in subsection (2)(a) or (b).

(4) Subsection (5) applies where—

(a) the holder of a floating charge (“the chargee”) is prevented by subsection (2) from giving a notice mentioned there during the moratorium, and

(b) under the terms of the floating charge, the time for giving such a notice ends during the moratorium or before the chargee is given notice of the end of the moratorium under section A17.

(5) The chargee may give notice later than is required under the terms of the floating charge, but only if the chargee does so as soon as is practicable after—

(a) the end of the moratorium, or

(b) if later, the day on which the chargee is notified of the end of the moratorium.

(6) Where—

(a) subsection (3) prevents an event which occurs during the moratorium from having the effect mentioned there, and

(b) the holder of the floating charge gives notice of the event to the company as soon as is practicable after—

(i) the end of the moratorium, or

(ii) if later, the day on which the chargee is notified of the end of the moratorium,

the event is to be treated as if it had occurred when the notice was given.

(7) This section does not apply in relation to a floating charge that is—

(a) a collateral security (as defined by section A27);

(b) a market charge (as defined by section A27);

(c) a security financial collateral arrangement (within the meaning of regulation 3 of the Financial Collateral Arrangements (No. 2) Regulations 2003 (S.I. 2003/3226));

(d) a system-charge (as defined by section A27).

A23 Enforcement of security granted during moratorium U.K.

(1) Security granted by a company during a moratorium in relation to the company may be enforced only if the monitor consented to the grant of security under section A26.

(2) See also section A21(1)(c), which restricts enforcement during a moratorium.

Notification of insolvency proceedings U.K.

A24 Duty of directors to notify monitor of insolvency proceedings etc U.K.

(1) The directors of a company must notify the monitor before taking any of the following steps during a moratorium—

(a) presenting a petition for the winding up of the company;

(b) making an administration application in respect of the company;

(c) appointing an administrator under paragraph 22(2) of Schedule B1.

(2) The directors of a company must notify the monitor if, during a moratorium for the company, they recommend that the company passes a resolution for voluntary winding up under section 84(1)(b).

(3) The rules may make provision about the timing of a notice required to be given under subsection (1) or (2).

(4) If the directors fail to comply with subsection (1) or (2), any director who did not have a reasonable excuse for the failure commits an offence.

Restrictions on transactions U.K.

A25 Restrictions on obtaining credit U.K.

(1) During a moratorium, the company may not obtain credit to the extent of £500 or more from a person unless the person has been informed that a moratorium is in force in relation to the company.

(2) The reference to the company obtaining credit includes—

(a) the company entering into a conditional sale agreement in accordance with which goods are to be sold to the company,

(b) the company entering into any other form of hire-purchase agreement under which goods are to be bailed (in Scotland, hired) to the company, and

(c) the company being paid in advance (whether in money or otherwise) for the supply of goods or services.

(3) If a company contravenes subsection (1)—

(a) the company commits an offence, and

(b) any officer of the company who without reasonable excuse authorised or permitted the obtaining of the credit commits an offence.

A26 Restrictions on grant of security etc U.K.

(1) During a moratorium, the company may grant security over its property only if the monitor consents.

(2) The monitor may give consent under subsection (1) only if the monitor thinks that the grant of security will support the rescue of the company as a going concern.

(3) In deciding whether to give consent under subsection (1), the monitor is entitled to rely on information provided by the company unless the monitor has reason to doubt its accuracy.

(4) If the company grants security over its property during the moratorium otherwise than as authorised by subsection (1)—

(a) the company commits an offence, and

(b) any officer of the company who without reasonable excuse authorised or permitted the grant of the security commits an offence.

(5) For the consequences of a company granting security over its property in contravention of subsection (1), see also section A23.

(6) The monitor may not give consent under this section if the granting of security is an offence under section A27.

A27 Prohibition on entering into market contracts etc U.K.

(1) If a company enters into a transaction to which this section applies during a moratorium for the company—

(a) the company commits an offence, and

(b) any officer of the company who without reasonable excuse authorised or permitted the company to enter into the transaction commits an offence.

(2) A company enters into a transaction to which this section applies if it—

(a) enters into a market contract,

(b) enters into a financial collateral arrangement,

(c) gives a transfer order,

(d) grants a market charge or a system-charge, or

(e) provides any collateral security.

(3) Where during the moratorium a company enters into a transaction to which this section applies, nothing done by or in pursuance of the transaction is to be treated as done in contravention of any of sections A19, A21, A25, A26 and A28 to A32.

(4) In this section—

• “collateral security” has the same meaning as in the Financial Markets and Insolvency (Settlement Finality) Regulations 1999 (S.I. 1999/2979);

• “financial collateral arrangement” has the same meaning as in the Financial Collateral Arrangements (No. 2) Regulations 2003 (S.I. 2003/3226);

• “market charge” has the same meaning as in Part 7 of the Companies Act 1989;

• “market contract” has the same meaning as in Part 7 of the Companies Act 1989;

• “system-charge” has the meaning given by the Financial Markets and Insolvency Regulations 1996 (S.I. 1996/1469);

• “transfer order” has the same meaning as in the Financial Markets and Insolvency (Settlement Finality) Regulations 1999.

Restrictions on payments and disposal of property U.K.

A28 Restrictions on payment of certain pre-moratorium debts U.K.

(1) During a moratorium, the company may make one or more relevant payments to a person that (in total) exceed the specified maximum amount only if—

(a) the monitor consents,

(b) the payment is in pursuance of a court order, or

(c) the payment is required by section A31(3) or A32(3).

(2) In subsection (1)—

• “relevant payments” means payments in respect of pre-moratorium debts for which the company has a payment holiday during the moratorium (see section A18);

• “specified maximum amount” means an amount equal to the greater of—

  (a)

  £5000, and

  (b)

  1% of the value of the debts and other liabilities owed by the company to its unsecured creditors when the moratorium began, to the extent that the amount of such debts and liabilities can be ascertained at that time.

(3) The monitor may give consent under subsection (1)(a) only if the monitor thinks that it will support the rescue of the company as a going concern.

(4) In deciding whether to give consent under subsection (1)(a), the monitor is entitled to rely on information provided by the company unless the monitor has reason to doubt its accuracy.

(5) If the company makes a payment to which subsection (1) applies otherwise than as authorised by that subsection—

(a) the company commits an offence, and

(b) any officer of the company who without reasonable excuse authorised or permitted the payment commits an offence.

A29 Restrictions on disposal of property U.K.

(1) During a moratorium, the company may dispose of its property only if authorised by subsection (2) or (5).

(2) In the case of property that is not subject to a security interest, the company may dispose of the property if—

(a) the disposal is made in the ordinary way of the company’s business,

(b) the monitor consents, or

(c) the disposal is in pursuance of a court order.

(3) The monitor may give consent under subsection (2)(b) only if the monitor thinks that it will support the rescue of the company as a going concern.

(4) In deciding whether to give consent under subsection (2)(b), the monitor is entitled to rely on information provided by the company unless the monitor has reason to doubt its accuracy.

(5) In the case of property that is subject to a security interest, the company may dispose of the property if the disposal is in accordance with—

(a) section A31(1), or

(b) the terms of the security.

(6) If the company disposes of its property during the moratorium otherwise than as authorised by this section—

(a) the company commits an offence, and

(b) any officer of the company who without reasonable excuse authorised or permitted the disposal commits an offence.

Modifications etc. (not altering text)

C71 Ss. A29-A32 excluded by S.I. 2015/912, reg. 37(12A)(d) (as inserted (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 3 para. 55(4) (with ss. 2(2), 5(2)))

A30 Restrictions on disposal of hire-purchase property U.K.

(1) During a moratorium, the company may dispose of any goods in the possession of the company under a hire-purchase agreement only if the disposal is in accordance with —

(a) section A32(1), or

(b) the terms of the agreement.

(2) If the company disposes of goods in the possession of the company under a hire-purchase agreement otherwise than as authorised by subsection (1)—

(a) the company commits an offence, and

(b) any officer of the company who without reasonable excuse authorised or permitted the disposal commits an offence.

Modifications etc. (not altering text)

C71 Ss. A29-A32 excluded by S.I. 2015/912, reg. 37(12A)(d) (as inserted (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 3 para. 55(4) (with ss. 2(2), 5(2)))

Disposals of property free from charges etc U.K.

A31 Disposal of charged property free from charge U.K.

(1) During a moratorium, the company may, with the permission of the court, dispose of property which is subject to a security interest as if it were not subject to the security interest.

(2) The court may give permission under subsection (1) only if the court thinks that it will support the rescue of the company as a going concern.

(3) Where the court gives permission under subsection (1) other than in relation to a floating charge, the company must apply the following towards discharging the sums secured—

(a) the net proceeds of disposal of the property, and

(b) any money required to be added to the net proceeds so as to produce the amount determined by the court as the net amount which would be realised on a sale of the property in the open market by a willing vendor.

(4) Where the permission relates to two or more security interests, the condition in subsection (3) requires the application of money in the order of the priorities of the security interests.

(5) Where property subject to a floating charge is disposed of under subsection (1), the holder of the floating charge has the same priority in respect of acquired property as they had in respect of the property disposed of.

(6) In subsection (5) “acquired property” means property of the company which directly or indirectly represents the property disposed of.

(7) Where the court makes an order giving permission under subsection (1), the directors must, within the period of 14 days beginning with the date of the order, send a copy of it to the registrar of companies.

(8) If the directors fail to comply with subsection (7), any director who did not have a reasonable excuse for the failure commits an offence.

(9) Where property in Scotland is disposed of under subsection (1), the company must grant to the disponee an appropriate document of transfer or conveyance of the property, and—

(a) that document, or

(b) recording, intimation or registration of that document (where recording, intimation or registration of the document is a legal requirement for completion of title to the property),

has the effect of disencumbering the property of or, as the case may be, freeing the property from, the security interest.

(10) If a company fails to comply with subsection (3) or (9)—

(a) the company commits an offence, and

(b) any officer of the company who without reasonable excuse authorised or permitted the failure commits an offence.

(11) Subsection (1) does not apply in relation to any property which is subject to a financial collateral arrangement, a market charge, a system-charge or a collateral security (as defined by section A27).

Modifications etc. (not altering text)

C71 Ss. A29-A32 excluded by S.I. 2015/912, reg. 37(12A)(d) (as inserted (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 3 para. 55(4) (with ss. 2(2), 5(2)))

A32 Disposal of hire-purchase property U.K.

(1) During a moratorium, the company may, with the permission of the court, dispose of goods which are in the possession of the company under a hire-purchase agreement as if all of the rights of the owner under the agreement were vested in the company.

(2) The court may give permission under subsection (1) only if the court thinks that it will support the rescue of the company as a going concern.

(3) Where the court gives permission under subsection (1), the company must apply the following towards discharging the sums payable under the hire-purchase agreement—

(a) the net proceeds of disposal of the goods, and

(b) any additional money required to be added to the net proceeds so as to produce the amount determined by the court as the net amount which would be realised on a sale of the goods in the open market by a willing vendor.

(4) If a company fails to comply with subsection (3)—

(a) the company commits an offence, and

(b) any officer of the company who without reasonable excuse authorised or permitted the failure commits an offence.

(5) Where the court makes an order giving permission under subsection (1), the directors must, within the period of 14 days beginning with the date of the order, send a copy of it to the registrar of companies.

(6) If the directors fail to comply with subsection (5), any director who did not have a reasonable excuse for the failure commits an offence.

(7) In Scotland, where goods in the possession of the company under a hire-purchase agreement are disposed of under subsection (1), the disposal has the effect of extinguishing, as against the disponee, all rights of the owner of the goods under the agreement.

Modifications etc. (not altering text)

C71 Ss. A29-A32 excluded by S.I. 2015/912, reg. 37(12A)(d) (as inserted (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 3 para. 55(4) (with ss. 2(2), 5(2)))

Effect of contravention of certain provisions of Chapter U.K.

A33 Contravention of certain requirements imposed under this Chapter U.K.

The fact that a company contravenes section A19 or any of sections A25 to A32 does not—

(a) make any transaction void or unenforceable, or

(b) affect the validity of any other thing.

CHAPTER 5 U.K. The monitor

A34 Status of monitor U.K.

The monitor in relation to a moratorium is an officer of the court.

A35 Monitoring U.K.

(1) During a moratorium, the monitor must monitor the company’s affairs for the purpose of forming a view as to whether it remains likely that the moratorium will result in the rescue of the company as a going concern.

(2) In forming the view mentioned in subsection (1), the monitor is entitled to rely on information provided by the company, unless the monitor has reason to doubt its accuracy.

Modifications etc. (not altering text)

C72 S. A35(1) modified (temp.) (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 4 para. 9 (with ss. 2(2), 5(2), Sch. 4 para. 1)

A36 Provision of information to monitor U.K.

(1) The monitor may require the directors of the company to provide any information required by the monitor for the purpose of carrying out the monitor’s functions.

(2) The directors must comply with a requirement to provide information as soon as practicable.

(3) For the potential consequences of failing to comply with a requirement to provide information, see section A38.

A37 Application by monitor for directions U.K.

The monitor in relation to a moratorium may apply to the court for directions about the carrying out of the monitor’s functions.

A38 Termination of moratorium by monitor U.K.

(1) The monitor must bring a moratorium to an end by filing a notice with the court if—

(a) the monitor thinks that the moratorium is no longer likely to result in the rescue of the company as a going concern,

(b) the monitor thinks that the objective of rescuing the company as a going concern has been achieved,

(c) the monitor thinks that, by reason of a failure by the directors to comply with a requirement under section A36, the monitor is unable properly to carry out the monitor’s functions, or

(d) the monitor thinks that the company is unable to pay any of the following that have fallen due—

(i) moratorium debts;

(ii) pre-moratorium debts for which the company does not have a payment holiday during the moratorium (see section A18).

(2) The rules may provide for debts that are to be disregarded for the purposes of subsection (1)(d).

(3) On the filing with the court of a notice under subsection (1), the moratorium comes to an end.

(4) The rules may make provision about the timing of a notice required to be given under subsection (1).

(5) The Secretary of State may by regulations amend this section for the purposes of changing the circumstances in which the monitor must bring a moratorium to an end under subsection (1).

(6) Regulations under subsection (5) are subject to the affirmative resolution procedure.

(7) See also section A17 (obligations to notify change in end of moratorium).

Modifications etc. (not altering text)

C73 S. A38(1) modified (temp.) (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 4 para. 10 (with ss. 2(2), 5(2), Sch. 4 para. 1)

A39 Replacement of monitor or appointment of additional monitor U.K.

(1) The court may make an order authorising the appointment of a qualified person to act as the monitor in relation to a moratorium instead of, or in addition to, a person who already acts as the monitor.

(2) The court may make an order providing that a person ceases to act as the monitor in relation to a moratorium.

(3) An order under subsection (1) or (2) may be made only on an application by the directors or the monitor.

(4) The court may make an order authorising the appointment of a monitor under subsection (1) only if the person has provided the court with a statement that the person—

(a) is a qualified person, and

(b) consents to act as the monitor in relation to the moratorium.

(5) Where it is proposed that more than one person should act as the monitor in relation to the moratorium, the statement under subsection (4) must specify—

(a) which functions (if any) are to be exercised by the persons acting jointly, and

(b) which functions (if any) are to be exercised by any or all of the persons.

(6) The rules may make provision about the date on which the statement under subsection (4) must be made.

(7) Where the court makes an order under subsection (1) or (2) the person begins to act as the monitor, or ceases to act as the monitor, in relation to the moratorium at the time specified in, or determined in accordance with, the order (“the relevant time”).

(8) As soon as reasonably practicable after the relevant time, the monitor must notify the following of the effect of the order—

(a) the registrar of companies,

(b) every creditor of the company of whose claim the monitor is aware,

(c) in a case where the company is or has been an employer in respect of an occupational pension scheme that is not a money purchase scheme, the Pensions Regulator, and

(d) in a case where the company is an employer in respect of such a pension scheme that is an eligible scheme within the meaning given by section 126 of the Pensions Act 2004, the Board of the Pension Protection Fund.

(9) If the monitor without reasonable excuse fails to comply with subsection (8), the monitor commits an offence.

A40 Application of Part where two or more persons act as monitor U.K.

(1) Where two or more persons act jointly as the monitor—

(a) a reference in this Act to the monitor is a reference to those persons acting jointly;

(b) where an offence of omission is committed by the monitor, each of the persons appointed to act jointly—

(i) commits the offence, and

(ii) may be proceeded against and punished individually.

(2) Where persons act jointly in respect of only some of the functions of the monitor, subsection (1) applies only in relation to those functions.

(3) Where two or more persons act concurrently as the monitor a reference in this Act to the monitor is a reference to any of the persons appointed (or any combination of them).

A41 Presumption of validity U.K.

An act of the monitor is valid in spite of a defect in the monitor’s appointment or qualification.

Chapter 6 U.K. Challenges

A42 Challenge to monitor’s actions U.K.

(1) Any of the persons specified below may apply to the court on the ground that an act, omission or decision of the monitor during a moratorium has unfairly harmed the interests of the applicant.

(2) The persons who may apply are—

(a) a creditor, director or member of the company, or

(b) any other person affected by the moratorium.

(3) An application under subsection (1) may be made during the moratorium or after it has ended.

(4) On an application under subsection (1) the court may—

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

(b) give the monitor directions, or

(c) make such other order as it thinks fit (but may not, under this paragraph, order the monitor to pay any compensation).

(5) Where an application under subsection (1) relates to a failure by the monitor to bring the moratorium to an end under section A38(1), an order under subsection (4) may, in particular, bring the moratorium to an end and make such consequential provision as the court thinks fit.

(6) Where an application under subsection (1) relates to the monitor bringing a moratorium to an end under section A38(1), an order under subsection (4) may, in particular, provide that the moratorium is not to be taken into account for the purposes of paragraph 2(1)(b) of Schedule ZA1 (company not eligible for moratorium if moratorium in force within previous 12 months).

(7) In making an order under subsection (4) the court must have regard to the need to safeguard the interests of persons who have dealt with the company in good faith and for value.

(8) See also section A17 (obligations to notify change in end of moratorium).

A43 Challenges to monitor remuneration in insolvency proceedings U.K.

(1) The rules may confer on an administrator or liquidator of a company the right to apply to the court on the ground that remuneration charged by the monitor in relation to a prior moratorium for the company was excessive.

(2) Rules under subsection (1) may (among other things) make provision as to—

(a) time limits;

(b) disposals available to the court;

(c) the treatment of costs (or, in Scotland, the expenses) of the application in the administration or winding up.

Modifications etc. (not altering text)

C74 S. A43 applied (with modifications) (E.W.) (15.3.2024) by The Water Industry (Special Administration) Regulations 2024 (S.I. 2024/205), regs. 2(2), 5(1) (with reg. 64)

A44 Challenge to directors’ actions U.K.

(1) A creditor or member of a company may apply to the court for an order under this section on the ground that—

(a) during a moratorium, the company’s affairs, business and property are being or have been managed by the directors in a manner which has unfairly harmed the interests of its creditors or members generally or of some part of its creditors or members (including at least the applicant), or

(b) any actual or proposed act or omission of the directors during a moratorium causes or would cause such harm.

(2) An application under subsection (1) may be made during the moratorium or after it has ended.

(3) On an application under subsection (1) the court may make such order as it thinks fit.

(4) An order under subsection (3) may in particular—

(a) regulate the management by the directors of the company’s affairs, business and property during the remainder of the moratorium,

(b) require the directors to refrain from doing or continuing an act complained of by the applicant or to do an act which the applicant has complained they have omitted to do,

(c) require a decision of the company’s creditors to be sought (using a qualifying decision procedure) on such matters as the court may direct, or

(d) bring the moratorium to an end and make such consequential provision as the court thinks fit.

(5) In making an order under subsection (3) the court must have regard to the need to safeguard the interests of persons who have dealt with the company in good faith and for value.

(6) See also section A17 (obligations to notify change in end of moratorium).

A45 Challenge brought by Board of the Pension Protection Fund U.K.

(1) This section applies where—

(a) a moratorium—

(i) is in force in relation to a company that is an employer in respect of an eligible scheme, or

(ii) is or has been in force in relation to a company that has been an employer in respect of an eligible scheme at any time during the moratorium, and

(b) the trustees or managers of the scheme are a creditor of the company.

(2) The Board of the Pension Protection Fund may make any application under section A42(1) or A44(1) that could be made by the trustees or managers as a creditor.

(3) For the purposes of such an application, any reference in section A42(1) or A44(1) to the interests of the applicant is to be read as a reference to the interests of the trustees or managers as a creditor.

(4) In this section “eligible scheme” has the meaning given by section 126 of the Pensions Act 2004.

CHAPTER 7 U.K. Offences: general

A46 Offence of fraud etc during or in anticipation of moratorium U.K.

(1) An officer of a company commits an offence if, during a moratorium for the company or at any time within the period of 12 months ending with the day on which a moratorium for the company comes into force, the officer—

(a) does any of the things mentioned in subsection (2), or

(b) was privy to the doing by others of any of the things mentioned in subsection (2)(c), (d) and (e).

(2) Those things are—

(a) concealing any part of the company’s property to the value of £500 or more, or concealing any debt due to or from the company,

(b) fraudulently removing any part of the company’s property to the value of £500 or more,

(c) concealing, destroying, mutilating or falsifying any document affecting or relating to the company’s property or affairs,

(d) making any false entry in any document affecting or relating to the company’s property or affairs,

(e) fraudulently parting with, altering or making any omission in any document affecting or relating to the company’s property or affairs, or

(f) pawning, pledging or disposing of any property of the company which has been obtained on credit and has not been paid for (unless the pawning, pledging or disposal was in the ordinary way of the company’s business).

(3) It is a defence—

(a) for a person charged with an offence under subsection (1) in respect of any of the things mentioned in subsection (2)(a) or (f) to prove that the person had no intent to defraud, and

(b) for a person charged with an offence under subsection (1) in respect of any of the things mentioned in subsection (2)(c) or (d) to prove that the person had no intent to conceal the state of affairs of the company or to defeat the law.

(4) Where a person pawns, pledges or disposes of any property of a company in circumstances which amount to an offence under subsection (1), every person who takes in pawn or pledge, or otherwise receives, the property commits an offence if the person knows it to be pawned, pledged or disposed of in circumstances which—

(a) amount to an offence under subsection (1), or

(b) would, if a moratorium were obtained for the company within the period of 12 months beginning with the day on which the pawning, pledging or disposal took place, amount to an offence under subsection (1).

(5) In this section, “officer” includes a shadow director.

A47 Offence of false representation etc to obtain a moratorium U.K.

(1) An officer of a company commits an offence if, for the purpose of obtaining a moratorium for the company or an extension of a moratorium for the company, the officer—

(a) makes any false representation, or

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

(2) Subsection (1) applies even if no moratorium or extension is obtained.

(3) In this section, “officer” includes a shadow director.

A48 Prosecution of delinquent officers of company U.K.

(1) This section applies where a moratorium has been obtained for a company.

(2) If it appears to the monitor that any past or present officer of the company has committed an offence in connection with the moratorium, the monitor must 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 monitor and relating to the matter in question) as the authority requires.

(3) In subsection (2), “the appropriate authority”—

(a) in the case of a company registered in England and Wales, means the Secretary of State,

(b) in the case of a company registered in Scotland, means the Lord Advocate, and

(c) in the case of an unregistered company means—

(i) if it has a principal place of business in England and Wales but not Scotland, the Secretary of State,

(ii) if it has a principal place of business in Scotland but not England and Wales, the Lord Advocate,

(iii) if it has a principal place of business in both England and Wales and Scotland, the Secretary of State and the Lord Advocate, and

(iv) if it does not have a principal place of business in England and Wales or Scotland, the Secretary of State.

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

(5) For the purpose of such an investigation any obligation imposed on a person by any provision of the 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 the Secretary of State’s investigation.

(6) Where a question is put to a person in exercise of the powers conferred by subsection (4), the person’s answer may be used in evidence against them.

(7) However, in criminal proceedings in which the person is charged with an offence other than a false statement offence—

(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 the person.

(8) In subsection (7) “false statement offence” means—

(a) an offence under section 2 or 5 of the Perjury 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 Criminal Law (Consolidation) (Scotland) Act 1995 (false statements made on oath or otherwise than on oath).

(9) Where a prosecuting authority institutes criminal proceedings following any report under subsection (2), the monitor, and every officer and agent of the company past and present (other than the defendant or defender), must give the authority all assistance in connection with the prosecution which they are reasonably able to give.

(10) 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.

(11) The court may, on the application of the prosecuting authority, direct a person who has failed to comply with subsection (9) to comply with it.

Chapter 8 U.K. Miscellaneous and general

Special rules for certain kinds of company etc U.K.

A49 Regulated companies: modifications to this Part U.K.

(1) For the purposes of sections A3 and A4 as they apply in relation to a regulated company, section A6(1) has effect as if the documents listed there included a reference to the written consent of the appropriate regulator to the appointment of the proposed monitor.

(2) The remaining provisions of this section apply in relation to a moratorium for a regulated company.

(3) Any notice under section A8(2), A17(2) to (4) or A39(8) must also be sent by the monitor to the appropriate regulator.

(4) The directors must give the appropriate regulator notice of any qualifying decision procedure by which a decision of the company’s creditors is sought for the purposes of section A12(2) or A44(4)(c).

(5) If the directors fail to comply with subsection (4), any director who did not have a reasonable excuse for the failure commits an offence.

(6) The appropriate regulator, or a person appointed by the appropriate regulator, may in the way provided for by the rules, participate (but not vote) in any qualifying decision procedure by which a decision of the company’s creditors is sought for the purposes of this Part.

(7) The appropriate regulator is entitled to be heard on any application to the court for permission under section A31(1) or A32(1) (disposal of charged property, etc).

(8) The court may make an order under section A39(1) only if the appropriate regulator has given its written consent to the appointment of the proposed monitor.

(9) The persons who may apply to the court under section A39(3), A42(1) or A44(1) include the appropriate regulator.

(10) If a person other than a regulator applies to the court under section A39(3), A42(1) or A44(1) the appropriate regulator is entitled to be heard on the application.

(11) If either regulator makes an application to the court under section A39(3), A42(1) or A44(1) in relation to a PRA-regulated company, the other regulator is entitled to be heard on the application.

(12) This section does not affect any right that the appropriate regulator has (apart from this section) as a creditor of a regulated company.

(13) In this section—

• “the appropriate regulator” means—

  (a)

  where the regulated company is a PRA-regulated company, each of the Financial Conduct Authority and the Prudential Regulation Authority, and

  (b)

  where the regulated company is not a PRA-regulated company, the Financial Conduct Authority;

• “PRA-authorised person” has the meaning given by section 2B(5) of the Financial Services and Markets Act 2000;

• “PRA-regulated company” means a regulated company which—

  (a)

  is, or has been, a PRA-authorised person,

  (b)

  is, or has been, an appointed representative within the meaning given by section 39 of the Financial Services and Markets Act 2000, whose principal (or one of whose principals) is, or was, a PRA-authorised person, or

  (c)

  is carrying on, or has carried on, a PRA-regulated activity (within the meaning of section 22A of that Act) in contravention of the general prohibition;

• “regulated activity” has the meaning given by section 22 of the Financial Services and Markets Act 2000, taken with Schedule 2 to that Act and any order under that section;

• “regulated company” means a company which—

  (a)

  is, or has been, an authorised person within the meaning given by section 31 of the Financial Services and Markets Act 2000,

  (b)

  is, or has been, an appointed representative within the meaning given by section 39 of that Act, or

  (c)

  is carrying on, or has carried on, a regulated activity in contravention of the general prohibition within the meaning given by section 19 of that Act;

• “regulator” means the Financial Conduct Authority or the Prudential Regulation Authority.

(14) The Secretary of State may by regulations amend this section for the purposes of changing the definition of “regulated company” in subsection (13).

(15) Regulations under subsection (14) are subject to the affirmative resolution procedure.

A50 Power to modify this Part etc in relation to certain companies U.K.

(1) The Secretary of State may by regulations make provision under the law of England and Wales or Scotland—

(a) to modify this Part as it applies in relation to a company for which there is a special administration regime, or

(b) in connection with the interaction between this Part and any other insolvency procedure in relation to such a company.

(2) The Welsh Ministers may by regulations make provision under the law of England and Wales—

(a) to modify this Part as it applies in relation to a company that is a social landlord registered under Part 1 of the Housing Act 1996, or

(b) make provision in connection with the interaction between this Part and any other insolvency procedure in relation to such a company.

(3) The Scottish Ministers may by regulations make provision under the law of Scotland—

(a) to modify this Part as it applies in relation to a company that is a social landlord registered under Part 2 of the Housing (Scotland) Act 2010 (asp 17), or

(b) make provision in connection with the interaction between this Part and any other insolvency procedure in relation to such a company.

(4) The Secretary of State may, by regulations, make any provision under the law of England and Wales, Scotland or Northern Ireland that appears to the Secretary of State to be appropriate in view of provision made under subsection (1), (2) or (3).

(5) The power in subsection (1), (2), (3) or (4) may, in particular, be used to amend, repeal, revoke or otherwise modify any provision made by an enactment.

(6) Regulations under subsection (1) or (4) are subject to the affirmative resolution procedure.

(7) A statutory instrument containing regulations under subsection (2) may not be made unless a draft of the statutory instrument containing them has been laid before and approved by a resolution of Senedd Cymru.

(8) Regulations made by the Scottish Ministers under subsection (3) are subject to the affirmative procedure (see section 29 of the Interpretation and Legislative Reform (Scotland) Act 2010 (asp 10)).

(9) In this section—

• “insolvency procedure” includes—

  (a)

  in relation to subsection (1)(b), the provision made by sections 143A to 159 of the Housing and Regeneration Act 2008;

  (b)

  in relation to subsection (2)(b), the provision made by sections 39 to 50 of the Housing Act 1996;

  (c)

  in relation to subsection (3)(b), the provision made by Part 7 of the Housing (Scotland) Act 2010;

• “ordinary administration” means the insolvency procedure provided for by Schedule B1;

• “special administration regime” means provision made by an enactment for an insolvency procedure that—

  (a)

  is similar or corresponds to ordinary administration, and

  (b)

  provides for the administrator to have one or more special objectives instead of or in addition to the objectives of ordinary administration.

A51 Power to make provision in connection with pension schemes U.K.

(1) The Secretary of State may by regulations provide that, in a case where—

(a) a moratorium—

(i) is in force in relation to a company that is an employer in respect of an eligible scheme, or

(ii) is or has been in force in relation to a company that has been an employer in respect of an eligible scheme at any time during the moratorium, and

(b) the trustees or managers of the scheme are a creditor of the company,

the Board of the Pension Protection Fund may exercise any of the following rights.

(2) The rights are those which are exercisable by the trustees or managers as a creditor of the company under or by virtue of—

(a) section A12, or

(b) a court order under section A44(4)(c).

(3) Regulations under subsection (1) may provide that the Board may exercise any such rights—

(a) to the exclusion of the trustees or managers of the scheme, or

(b) in addition to the exercise of those rights by the trustees or managers of the scheme.

(4) Regulations under subsection (1)—

(a) may specify conditions that must be met before the Board may exercise any such rights;

(b) may provide for any such rights to be exercisable by the Board for a specified period;

(c) may make provision in connection with any such rights ceasing to be so exercisable at the end of such a period.

(5) Regulations under subsection (1) are subject to the affirmative resolution procedure.

(6) In this section “eligible scheme” has the meaning given by section 126 of the Pensions Act 2004.

Floating charges U.K.

A52 Void provisions in floating charge documents U.K.

(1) A provision in an instrument creating a floating charge is void if it provides for the obtaining of a moratorium, or anything done with a view to obtaining a moratorium, to be—

(a) an event causing the floating charge to crystallise,

(b) an event causing restrictions which would not otherwise apply to be imposed on the disposal of property by the company, or

(c) a ground for the appointment of a receiver.

(2) The reference in subsection (1) to anything done with a view to obtaining a moratorium includes any preliminary decision or investigation.

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

(4) Subsection (1) does not apply to a provision in an instrument creating a floating charge that is—

(a) a collateral security (as defined by section A27);

(b) a market charge (as defined by section A27);

(c) a security financial collateral arrangement (within the meaning of regulation 3 of the Financial Collateral Arrangements (No. 2) Regulations 2003 (S.I. 2003/3226));

(d) a system-charge (as defined by section A27).

Interpretation of this Part U.K.

A53 Meaning of “pre-moratorium debt” and “moratorium debt” U.K.

(1) In this Part “pre-moratorium debt”, in relation to a company for which a moratorium is or has been in force, means—

(a) any debt or other liability to which the company becomes subject before the moratorium comes into force, or

(b) any debt or other liability to which the company has become or may become subject during the moratorium by reason of any obligation incurred before the moratorium comes into force,

but this is subject to subsection (3).

(2) In this Part “moratorium debt”, in relation to a company for which a moratorium is or has been in force, means—

(a) any debt or other liability to which the company becomes subject during the moratorium, other than by reason of an obligation incurred before the moratorium came into force, or

(b) any debt or other liability to which the company has become or may become subject after the end of the moratorium by reason of an obligation incurred during the moratorium,

but this is subject to subsection (3).

(3) For the purposes of this Part—

(a) a liability in tort or delict is a “pre-moratorium debt” if either—

(i) the cause of action has accrued before the moratorium comes into force, or

(ii) all the elements necessary to establish the cause of action exist before the moratorium comes into force except for actionable damage;

(b) a liability in tort or delict is a “moratorium debt” if it does not fall within paragraph (a) and either—

(i) the cause of action has accrued during the moratorium, or

(ii) all the elements necessary to establish the cause of action exist before the moratorium comes to an end except for actionable damage.

(4) The Secretary of State may by regulations amend this section for the purposes of changing the definition of “pre-moratorium debt” or “moratorium debt” in this Part.

(5) Regulations under subsection (4) are subject to the affirmative resolution procedure.

A54 Interpretation of this Part: general U.K.

(1) In this Part—

• “company” means—

  (a)

  a company registered under the Companies Act 2006 in England and Wales or Scotland, or

  (b)

  an unregistered company that may be wound up under Part 5 of this Act;

• “the court” means such court as is prescribed;

• “eligible”, in relation to a company, has the meaning given by Schedule ZA1;

• “employer”, in relation to a pension scheme—

  (a)

  in sections A8(2)(c), A17(8)(c) and A39(8)(c), means an employer within the meaning of section 318(1) of the Pensions Act 2004;

  (b)

  elsewhere in this Part, has the same meaning that it has for the purposes of Part 2 of the Pensions Act 2004 (see section 318(1) and (4) of that Act);

• “enactment” includes an Act of the Scottish Parliament and an instrument made under such an Act;

• “hire-purchase agreement” includes a conditional sale agreement, a chattel leasing agreement and a retention of title agreement;

• “liability” means (subject to subsection (2)) a liability to pay money or money’s worth, including any liability under an enactment, a liability for breach of trust, any liability in contract, tort, delict or bailment, and any liability arising out of an obligation to make restitution;

• “money purchase scheme” has the meaning given by section 181(1) of the Pension Schemes Act 1993;

• “the monitor”, in relation to a moratorium, means the person who has the functions of the monitor in relation to the moratorium (see also section A40 for cases where two or more persons act as the monitor);

• “moratorium” means a moratorium under this Part;

• “moratorium debt” has the meaning given by section A53;

• “occupational pension scheme” has the meaning given by section 1 of the Pension Schemes Act 1993;

• “pension scheme” has the meaning given by section 1 of the Pension Schemes Act 1993;

• “pre-moratorium debt” has the meaning given by section A53;

• “qualified person” means a person qualified to act as an insolvency practitioner;

• “unable to pay its debts”—

  (a)

  in relation to a registered company, has the same meaning as in Part 4 (see section 123);

  (b)

  in relation to an unregistered company, has the same meaning as in Part 5 (see sections 222 to 224).

(2) For the purposes of references in any provision of this Part to a debt or liability it is immaterial whether the debt or liability is present or future, whether it is certain or contingent, or whether its amount is fixed or liquidated, or is capable of being ascertained by fixed rules or as a matter of opinion.

(3) In this Part references to filing a document with the court are, in relation to a court in Scotland, references to lodging it in court.

(4) The Secretary of State may by regulations amend this section for the purposes of changing the definition of “qualified person” in subsection (1).

(5) Regulations under subsection (4) are subject to the affirmative resolution procedure.

Modifications etc. (not altering text)

C75 S. A54(1) modified (temp.) (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 4 paras. 13, 53 (with ss. 2(2), 5(2), Sch. 4 para. 1)

C76 S. A54(1) modified (30.9.2021) by S.I. 2014/229, art. 2(2A), Sch. A1 para. 1(3) (as inserted by The Co-operative and Community Benefit Societies (Administration) (Amendment) Order 2021 (S.I. 2021/1048), arts. 1(1), 2)

Regulations U.K.

A55 Regulations U.K.

(1) Regulations under this Part may make—

(a) different provision for different purposes;

(b) consequential, supplementary, incidental or transitional provision or savings.

(2) Regulations under this Part are to be made by statutory instrument, unless they are made by the Scottish Ministers.

(3) Where regulations of the Secretary of State under this Part are subject to “the affirmative resolution procedure”, they may not be made unless a draft of the statutory instrument containing them has been laid before Parliament and approved by a resolution of each House of Parliament.]

Part I E+W+S Company Voluntary Arrangements

Modifications etc. (not altering text)

C77 Pt. 1 applied (with modifications) (1.12.1994) by The Insolvent Partnerships Order 1994 (S.I. 1994/2421), arts. 4(1), 5(1), Sch. 1 (as amended (1.1.2003) by S.I. 2002/2708, arts. 4-6 (with transitional provisions in art. 11); (1.7.2005) by S.I. 2005/1516, art. 6; (1.4.2013) by S.I. 2013/472, Sch. 2 para. 11(a); (1.1.2015) by S.I. 2014/3486, arts. 1(2), 12 (with art. 3); (6.4.2017) by S.I. 2017/540, reg. 1, Sch. 2 para. 4 (with reg. 4); (19.12.2018) by S.I. 2018/1244, arts. 1(2), 18(2) (with art. 3)); and (28.12.2020) (temp.) by S.I. 2020/1350, regs. 1(4), 121(2))

C78 Pt. 1 (ss. 1-7), Pt. 2 (ss. 8-27) modified by Company Directors Disqualification Act 1986 (c. 46, SIF 27), ss. 21(2), 25

C79 Pts. 1-7 (ss. 1-251) applied (with modifications) by S.I. 1989/1276, arts. 2, 3

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

Pt. 1 (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. 1(i)) (as amended (13.3.2018) by The Small Business, Enterprise and Employment Act 2015 (Consequential Amendments, Savings and Transitional Provisions) Regulations 2018 (S.I. 2018/208), regs. 1(3), 2(3))

C80 Pt. 1: power to apply or incorporate conferred (6.4.2001) by 2000 c. 12, s. 14; S.I. 2000/3316, art. 2

Pt. 1: 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

C81 Pts. 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; (1.10.2005) by S.I. 2005/1989, reg. 3, Sch. 2 (with reg. 4); (8.12.2017) by S.I. 2017/1119, reg. 1(1), Sch. 1 Pts. 2, 3; (temp.) (retrospective to 27.4.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), Sch. 10 paras. 8(1)(2), 14, Sch. 12 para. 6 (with ss. 2(2), 5(2); (26.6.2020) by S.I. 2020/643, reg. 1(1), Sch. 1 (with reg. 2); (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 12 para. 6 (with ss. 2(2), 5(2), 14(4)); and (16.2.2021) by S.I. 2021/60, reg. 1(1), Sch. 1 (with reg. 3(2)))

C82 First 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. (as amended (1.4.2013) by S.I. 2013/472, art. 1(1), Sch. 2 para. 117; and (13.3.2018) by S.I. 2018/208, regs. 1(3), 11)

C83 Pt. 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.

C84 Pt. 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

C85 Pts. 1-4 applied in part (with modifications) (E.W.) (2.1.2013) by The Charitable Incorporated Organisations (Insolvency and Dissolution) Regulations 2012 (S.I. 2012/3013), reg. 1, Sch. para. 1 (as amended (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 3 para. 49(3) (with ss. 2(2), 5(2)); (7.7.2020) by S.I. 2020/710, regs. 1, 4 (with reg. 6) (which affecting legislation is revoked and this amendment reversed (13.8.2020) by S.I. 2020/856, regs. 1(2), 2); and (13.8.2020 immediately after the coming into force of S.I. 2020/856, reg. 2) by S.I. 2020/856, regs. 1(3), 5 (with reg. 7))

C86 Pt. 1 applied (with modifications) (6.4.2014) by The Co-operative and Community Benefit Societies and Credit Unions (Arrangements, Reconstructions and Administration) Order 2014 (S.I. 2014/229), art. 2(1), Sch. 1 (as renamed (1.8.2014) by S.I. 2014/1815, Sch. para 33; and as amended (1.8.2014) by S.I. 2014/1822, art. 5; (13.3.2018) by S.I. 2018/208, regs. 1(3), 15(3)(a); and (18.7.2020) by S.I. 2020/744, arts. 1, 11)

C87 Pt. 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)

C88 Pts. 1-4 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), reg. 2, Sch. 1 para. 3 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4)

C89 Pt. 1 applied (with modifications) (E.W.S) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 44 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 18)

The Proposal E+W+S

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

(1) The directors of a company [F2 (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 F3 [F4 ... in relation to the voluntary arrangement].

(3) Such a proposal may also be made—

[F5 (a) where the company is in administration, by the administrator,]

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

[F6 (4) In this Part “company” means—

[F7 (a) a company registered under the Companies Act 2006 in England and Wales or Scotland;]

(b) a company incorporated in an EEA State F8 ...; or

(c) a company not incorporated in an EEA State but having its centre of main interests in a member State [F9 (other than Denmark) or in the United Kingdom].

(5) In subsection (4), in relation to a company, “centre of main interests” has the same meaning as in the [F10 Article 3 of the EU 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

F2 Words 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))

F3 Words in s. 1(2) omitted (1.10.2015) by virtue of Deregulation Act 2015 (c. 20), s. 115(7), Sch. 6 para. 20(2)(a); S.I. 2015/1732, art. 2(e)(vi)

F4 Words 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)

F5 S. 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))

F6 S. 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)

F7 S. 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)

F8 Words in s. 1(4)(b) omitted (31.12.2020) by virtue of The Insolvency (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/146), reg. 1(3), Sch. para. 17(a) (with regs. 4, 5); 2020 c. 1, Sch. 5 para. 1(1)

F9 Words in s. 1(4)(c) substituted (31.12.2020) by The Insolvency (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/146), reg. 1(3), Sch. para. 17(b) (with regs. 4, 5); 2020 c. 1, Sch. 5 para. 1(1)

F10 Words in s. 1(5) substituted (26.6.2017) by The Insolvency Amendment (EU 2015/848) Regulations 2017 (S.I. 2017/702), reg. 1, Sch. para. 2 (with regs. 3, 4)

Modifications etc. (not altering text)

C90 S. 1 modified (E.W.) (31.1.2019) by The Further Education Bodies (Insolvency) Regulations 2019 (S.I. 2019/138), regs. 1(1), 7 (with regs. 1(2), 3(a)(ii))

C91 S. 1 restricted (24.3.2022) by Commercial Rent (Coronavirus) Act 2022 (c. 12), ss. 25(2)(a), 31(4) (with s. 30)

C92 Ss. 1-7B applied (with modifications) (E.W.) (15.3.2024) by The Water Industry (Special Administration) Regulations 2024 (S.I. 2024/205), regs. 2(2), 5(1), 43-45 (with reg. 64)

F11 1A Moratorium. E+W+S

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

Textual Amendments

F11 S. 1A omitted (26.6.2020) by virtue of Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 3 para. 2 (with ss. 2(2), 5(2))

Modifications etc. (not altering text)

C92 Ss. 1-7B applied (with modifications) (E.W.) (15.3.2024) by The Water Industry (Special Administration) Regulations 2024 (S.I. 2024/205), regs. 2(2), 5(1), 43-45 (with reg. 64)

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 F12 ....

(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) [F13 whether, in his opinion, the proposed voluntary arrangement has a reasonable prospect of being approved and implemented,]

[F14 (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.

[F15 (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 practitioner F16 ... in relation to the voluntary arrangement.]

Textual Amendments

F12 Words in s. 2(1) omitted (26.6.2020) by virtue of Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 3 para. 3 (with ss. 2(2), 5(2))

F13 Words in s. 2(2) 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)

F14 S. 2(2)(b)(c) substituted for s. 2(2)(aa)(b) (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 2; S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F15 S. 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)

F16 Words in s. 2(4) omitted (1.10.2015) by virtue of Deregulation Act 2015 (c. 20), s. 115(7), Sch. 6 para. 20(2)(b); S.I. 2015/1732, art. 2(e)(vi)

Modifications etc. (not altering text)

C92 Ss. 1-7B applied (with modifications) (E.W.) (15.3.2024) by The Water Industry (Special Administration) Regulations 2024 (S.I. 2024/205), regs. 2(2), 5(1), 43-45 (with reg. 64)

C93 Ss. 2-6 applied (with modifications) by 2009 c. 1, s. 154(3A) (as inserted (13.3.2018) by The Small Business, Enterprise and Employment Act 2015 (Consequential Amendments, Savings and Transitional Provisions) Regulations 2018 (S.I. 2018/208), regs. 1(3), 5(6)(c))

3 [F17 Consideration 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 [F18 under 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 [F19 directs)—

(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 [F20 shall—

(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.]

[F21 (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.]

Textual Amendments

F17 S. 3 heading substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 3(5); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F18 Words in s. 3(1) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 3(2)(a); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F19 Words in s. 3(1) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 3(2)(b); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F20 Words in s. 3(2) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 3(3); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F21 S. 3(3)(4) substituted for s. 3(3) (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 3(4); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

Modifications etc. (not altering text)

C92 Ss. 1-7B applied (with modifications) (E.W.) (15.3.2024) by The Water Industry (Special Administration) Regulations 2024 (S.I. 2024/205), regs. 2(2), 5(1), 43-45 (with reg. 64)

C93 Ss. 2-6 applied (with modifications) by 2009 c. 1, s. 154(3A) (as inserted (13.3.2018) by The Small Business, Enterprise and Employment Act 2015 (Consequential Amendments, Savings and Transitional Provisions) Regulations 2018 (S.I. 2018/208), regs. 1(3), 5(6)(c))

C94 S. 3 modified (E.W.) (31.1.2019) by The Further Education Bodies (Insolvency) Regulations 2019 (S.I. 2019/138), regs. 1(1), 5 (with regs. 1(2), 3(a)(i))

Consideration and implementation of proposal E+W+S

4 Decisions of [F22 the company and its creditors]. E+W+S

[F23 (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 F24 ... [F25 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) [F26 Neither 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, [F27 neither 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, F28 ...

[F29 (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 [F30 an ordinary preferential debt] that bears to that debt a smaller proportion than is borne to [F31 another ordinary] preferential debt by the amount that is to be paid in respect of that other debt [F32 , F33 ...

(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.] [F34 or

(d) in the case of a company which is a relevant financial institution (see section 387A), any non-preferential debt is to be paid otherwise than in accordance with the rules in section 176AZA(2) or (3).]

However, F35 ... such a proposal or modification [F36 may be approved] with the concurrence of the F37 ... creditor concerned.

[F38 (4A) Subject to subsection (4B), where the nominee’s report under section 2(2) is submitted to the court before the end of the period of 12 weeks beginning with the day after the end of any moratorium for the company under Part A1, neither the company nor its creditors may approve any proposal or modification under which the following are to be paid otherwise than in full—

(a) moratorium debts (within the meaning given by section 174A);

(b) priority pre-moratorium debts (within the meaning given by section 174A).

(4B) Subsection (4A) does not prevent the approval of such a proposal or modification with the concurrence of the creditor concerned.]

(5) Subject as above, [F39 the meeting of the company and the qualifying decision procedure] shall be conducted in accordance with the rules.

(6) After the conclusion of [F40 the 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.

[F41 (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 [F42 , 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

F22 Words in s. 4 heading substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) 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); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F23 S. 4(1)(1A) substituted for s. 4(1) (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) 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); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F24 Words in s. 4(2) omitted (1.10.2015) by virtue of Deregulation Act 2015 (c. 20), s. 115(7), Sch. 6 para. 20(2)(c); S.I. 2015/1732, art. 2(e)(vi)

F25 Words 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)

F26 Words in s. 4(3) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) 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); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F27 Words in s. 4(4) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 4(4)(a); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F28 Word in s. 4(4)(a) omitted (1.1.2015) by virtue of The Banks and Building Societies (Depositor Preference and Priorities) Order 2014 (S.I. 2014/3486), arts. 1(2), 4(2)(a) (with art. 3)

F29 S. 4(4)(aa) inserted (1.1.2015) by The Banks and Building Societies (Depositor Preference and Priorities) Order 2014 (S.I. 2014/3486), arts. 1(2), 4(2)(b) (with art. 3)

F30 Words in s. 4(4)(b) substituted (1.1.2015) by The Banks and Building Societies (Depositor Preference and Priorities) Order 2014 (S.I. 2014/3486), arts. 1(2), 4(2)(c)(i) (with art. 3)

F31 Words in s. 4(4)(b) substituted (1.1.2015) by The Banks and Building Societies (Depositor Preference and Priorities) Order 2014 (S.I. 2014/3486), arts. 1(2), 4(2)(c)(ii) (with art. 3)

F32 S. 4(4)(c) and word inserted (1.1.2015) by The Banks and Building Societies (Depositor Preference and Priorities) Order 2014 (S.I. 2014/3486), arts. 1(2), 4(2)(d) (with art. 3)

F33 Word in s. 4(4)(b) omitted (19.12.2018) by virtue of The Banks and Building Societies (Priorities on Insolvency) Order 2018 (S.I. 2018/1244), arts. 1(2), 5(a) (with art. 3)

F34 S. 4(4)(d) and word inserted (19.12.2018) by The Banks and Building Societies (Priorities on Insolvency) Order 2018 (S.I. 2018/1244), arts. 1(2), 5(b) (with art. 3)

F35 Words in s. 4(4) omitted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) 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); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F36 Words in s. 4(4) inserted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 4(4)(c); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F37 Word in s. 4(4) omitted (19.12.2018) by virtue of The Banks and Building Societies (Priorities on Insolvency) Order 2018 (S.I. 2018/1244), arts. 1(2), 5(c) (with art. 3)

F38 S. 4(4A)(4B) inserted (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 3 para. 4(2) (with ss. 2(2), 5(2))

F39 Words in s. 4(5) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) 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); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F40 Words in s. 4(6) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) 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); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F41 S. 4(6A) inserted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 4(7); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F42 Words in s. 4(7) inserted (1.1.2015) by The Banks and Building Societies (Depositor Preference and Priorities) Order 2014 (S.I. 2014/3486), arts. 1(2), 4(3) (with art. 3)

Modifications etc. (not altering text)

C92 Ss. 1-7B applied (with modifications) (E.W.) (15.3.2024) by The Water Industry (Special Administration) Regulations 2024 (S.I. 2024/205), regs. 2(2), 5(1), 43-45 (with reg. 64)

C93 Ss. 2-6 applied (with modifications) by 2009 c. 1, s. 154(3A) (as inserted (13.3.2018) by The Small Business, Enterprise and Employment Act 2015 (Consequential Amendments, Savings and Transitional Provisions) Regulations 2018 (S.I. 2018/208), regs. 1(3), 5(6)(c))

C95 S. 4 modified (20.4.2003) by The Insurers (Reorganisation and Winding Up) Regulations 2003 (S.I. 2003/1102), reg. 33(1)(2) (with reg. 3)

S. 4 modified (18.2.2004) by The Insurers (Reorganisation and Winding Up) Regulations 2004 (S.I. 2004/353), reg. 33(1)(2) (with reg. 3) (as amended (3.3.2004) by S.I. 2004/546, reg. 2(5) and modified (10.8.2005) by S.I. 2005/1998, regs. 2(3), 40(1)-(4); and as amended (23.7.2019) by The Small Business, Enterprise and Employment Act 2015 (Consequential Amendments, Savings and Transitional Provisions) Regulations 2019 (S.I. 2019/1058), regs. 1, 6(4))

C96 S. 4 modified (28.12.2020 until IP completion day when the amending provision ceases to have effect in accordance with reg. 1(4) of the amending S.I.) by The Bank Recovery and Resolution (Amendment) (EU Exit) Regulations 2020 (S.I. 2020/1350), regs. 1(4), 110 (with reg. 108)

[F43 4A 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 [F44 the 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 [F45 (6)]) it has been taken by the [F46 company's creditors pursuant to] that section.

(3) If the decision taken by the [F47 company'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 [F48 company'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, [F49 as defined by section A49(13)], applies to the court under subsection (3), the [F50 appropriate regulator] is entitled to be heard on the application.

[F51 (5A) The appropriate regulator” means—

(a) where the regulated company is a PRA-regulated company [F52 as defined by section A49(13)], 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 [F53 company's creditors], or

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

Textual Amendments

F43 S. 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)

F44 Words in s. 4A(2)(a) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 5(2)(a); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F45 Word in s. 4A(2)(b) substituted (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 3 para. 5(2) (with ss. 2(2), 5(2))

F46 Words in s. 4A(2)(b) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 5(2)(b); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F47 Words in s. 4A(3) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 5(3); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F48 Words in s. 4A(4)(a) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 5(3); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F49 Words in s. 4A(5) substituted (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 3 para. 5(3) (with ss. 2(2), 5(2))

F50 Words in s. 4A(5) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 18 para. 52(2) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F51 S. 4A(5A) inserted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 18 para. 52(3) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F52 Words in s. 4A(5A) substituted (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 3 para. 5(4) (with ss. 2(2), 5(2))

F53 Words in s. 4A(6)(a) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 5(3); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

Modifications etc. (not altering text)

C92 Ss. 1-7B applied (with modifications) (E.W.) (15.3.2024) by The Water Industry (Special Administration) Regulations 2024 (S.I. 2024/205), regs. 2(2), 5(1), 43-45 (with reg. 64)

C93 Ss. 2-6 applied (with modifications) by 2009 c. 1, s. 154(3A) (as inserted (13.3.2018) by The Small Business, Enterprise and Employment Act 2015 (Consequential Amendments, Savings and Transitional Provisions) Regulations 2018 (S.I. 2018/208), regs. 1(3), 5(6)(c))

C97 S. 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

[F54 (1) This section applies where a decision approving a voluntary arrangement has effect under section 4A.]

(2) The F55 ... voluntary arrangement—

(a) takes effect as if made by the company at the [F56 time the creditors decided to approve the voluntary arrangement], and

[F57 (b) binds every person who in accordance with the rules—

(i) was entitled to vote [F58 in 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 [F59 is 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 [F59 provide 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 F55 ... voluntary arrangement.

[F60 (3A) Where immediately before the voluntary arrangement took effect a moratorium for the company was in force under Part A1 and a petition for the winding up of the company, other than an excepted petition within the meaning of section A20, was presented before the beginning of the moratorium, the court must dismiss the petition.]

(4) The court shall not make an order under subsection (3)(a) [F61 or dismiss a petition under subsection (3A)]—

(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) [F62 and (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.

[F63 (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

F54 S. 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)

F55 Words 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)

F56 Words in s. 5(2)(a) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 6(2)(a); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F57 S. 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)

F58 Words in s. 5(2)(b)(i) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 6(2)(b); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F59 Words 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))

F60 S. 5(3A) inserted (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 3 para. 6(2) (with ss. 2(2), 5(2))

F61 Words in s. 5(4) inserted (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 3 para. 6(3) (with ss. 2(2), 5(2))

F62 Words in s. 5(4)(a) inserted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 6(3); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F63 S. 5(5)(6) inserted (5.10.2004) by Energy Act 2004 (c. 20), ss. 159(1), 198, Sch. 20 para. 43; S.I. 2004/2575, art. 2(1), Sch. 1

Modifications etc. (not altering text)

C92 Ss. 1-7B applied (with modifications) (E.W.) (15.3.2024) by The Water Industry (Special Administration) Regulations 2024 (S.I. 2024/205), regs. 2(2), 5(1), 43-45 (with reg. 64)

C93 Ss. 2-6 applied (with modifications) by 2009 c. 1, s. 154(3A) (as inserted (13.3.2018) by The Small Business, Enterprise and Employment Act 2015 (Consequential Amendments, Savings and Transitional Provisions) Regulations 2018 (S.I. 2018/208), regs. 1(3), 5(6)(c))

C98 S. 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)

C99 S. 5 modified (1.10.2011) by Postal Services Act 2011 (c. 5), ss. 73, 93(2)(3), Sch. 10 para. 43; S.I. 2011/2329, art. 3 (with arts. 4, 5)

C100 S. 5 modified by S.I. 2012/3013, Sch. 2 para. 36 (as inserted (4.7.2018) by The Insolvency of Registered Providers of Social Housing Regulations 2018 (S.I. 2018/728), regs. 1, 3(6), Sch. 2)

C101 S. 5 modified (5.7.2018) by Housing and Planning Act 2016 (c. 22), s. 216(3), Sch. 5 para. 42; S.I. 2018/805, reg. 3(b)

C102 S. 5 restricted by 2010 asp17, s. 103 (as substituted (8.3.2019) by Housing (Amendment) (Scotland) Act 2018 (asp 13), ss. 6(11), 11(2); S.S.I. 2018/253, reg. 2(2))

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 [F64 which 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 [F65 the meeting of the company, or in relation to the relevant qualifying decision procedure].

[F66 (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 [F67 subsection (1)] are—

(a) a person entitled, in accordance with the rules, to vote at [F68 the meeting of the company or in the relevant qualifying decision procedure];

[F69 (aa) a person who would have been entitled, in accordance with the rules, to vote [F70 in 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 [F71 is in administration], the liquidator or administrator.

[F72 (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

[F73 (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) [F74 and (6A)] has been made to the court [F75 or

(b) in the case of a person who was not given notice of the [F76 relevant qualifying decision procedure], after the end of the period of 28 days beginning with the day on which he became aware that [F77 the 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) [F78 or, in the case of an application under subsection (2A), as to the ground mentioned in that subsection], it may do [F79 any] of the following, namely—

(a) revoke or suspend [F80 any decision approving the voluntary arrangement which has effect under section 4A] or, in a case falling within subsection (1)(b), any [F81 decision taken by the meeting [F82 of 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 [F83 a 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), [F84 and relating to the company meeting, a further company] meeting to reconsider the original proposal;

[F85 (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) [F86 or (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 [F87 decision 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 [F88 or relevant qualifying decision procedure] —

(a) gives a direction under subsection (4)(b) [F89 or (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 [F90 under the voluntary arrangement since it took effect].

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

[F91 (a)] [F92 a decision taken] at a [F93 company] meeting summoned under section 3 is not invalidated by any irregularity at or in relation to the meeting [F94 , 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.]

[F95 (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

F64 Words 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)

F65 Words in s. 6(1)(b) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) 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); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F66 S. 6(1A) inserted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 7(3); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F67 Words in s. 6(2) substituted (5.10.2004) by Energy Act 2004 (c. 20), ss. 159(1), 198, Sch. 20 para. 44(2); S.I. 2004/2575, art. 2(1), Sch. 1

F68 Words in s. 6(2)(a) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) 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); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F69 S. 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)

F70 Words in s. 6(2)(aa) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) 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); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F71 Words 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))

F72 S. 6(2A) inserted (5.10.2004) by Energy Act 2004 (c. 20), ss. 159(1), 198, Sch. 20 para. 44(3); S.I. 2004/2575, art. 2(1), Sch. 1

F73 In 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)

F74 Words in s. 6(3)(a) inserted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) 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); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F75 S. 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)

F76 Words in s. 6(3)(b) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) 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); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F77 Words in s. 6(3)(b) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) 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); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F78 Words in s. 6(4) inserted (5.10.2004) by Energy Act 2004 (c. 20), ss. 159(1), 198, Sch. 20 para. 44(4); S.I. 2004/2575, art. 2(1), Sch. 1

F79 Word in s. 6(4) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) 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); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F80 Words 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)

F81 Words 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)

F82 Words in s. 6(4)(a) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) 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); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F83 Words in s. 6(4)(b) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) 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); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F84 Words in s. 6(4)(b) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) 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); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F85 S. 6(4)(c) inserted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 7(10); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F86 Words in s. 6(5) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) 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); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F87 Words 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)

F88 Words in s. 6(6) inserted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 7(12)(a); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F89 Words in s. 6(6)(a) inserted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 7(12)(b); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F90 Words 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)

F91 S. 6(7)(a): words in s. 6(7) renumbered as s. 6(7)(a) (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) 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); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F92 Words 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)

F93 Word in s. 6(7)(a) inserted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 7(13)(b); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F94 S. 6(7)(b) and word inserted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 7(13)(c); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F95 S. 6(8) inserted (5.10.2004) by Energy Act 2004 (c. 20), ss. 159(1), 198, Sch. 20 para. 44(5); S.I. 2004/2575, art. 2(1), Sch. 1

Modifications etc. (not altering text)

C92 Ss. 1-7B applied (with modifications) (E.W.) (15.3.2024) by The Water Industry (Special Administration) Regulations 2024 (S.I. 2024/205), regs. 2(2), 5(1), 43-45 (with reg. 64)

C93 Ss. 2-6 applied (with modifications) by 2009 c. 1, s. 154(3A) (as inserted (13.3.2018) by The Small Business, Enterprise and Employment Act 2015 (Consequential Amendments, Savings and Transitional Provisions) Regulations 2018 (S.I. 2018/208), regs. 1(3), 5(6)(c))

C103 S. 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)

C104 S. 6 modified (1.10.2011) by Postal Services Act 2011 (c. 5), ss. 73, 93(2)(3), Sch. 10 para. 44; S.I. 2011/2329, art. 3 (with arts. 4, 5)

C105 S. 6 modified by S.I. 2012/3013, Sch. 2 para. 37 (as inserted (4.7.2018) by The Insolvency of Registered Providers of Social Housing Regulations 2018 (S.I. 2018/728), regs. 1, 3(6), Sch. 2)

C106 S. 6 modified (5.7.2018) by Housing and Planning Act 2016 (c. 22), s. 216(3), Sch. 5 para. 43; S.I. 2018/805, reg. 3(b)

[F96 6A 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

F96 S. 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)

Modifications etc. (not altering text)

C92 Ss. 1-7B applied (with modifications) (E.W.) (15.3.2024) by The Water Industry (Special Administration) Regulations 2024 (S.I. 2024/205), regs. 2(2), 5(1), 43-45 (with reg. 64)

7 Implementation of proposal. E+W+S

(1) This section applies where a voluntary arrangement [F97 has effect under section 4A].

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

[F98 (a) on the nominee by virtue of the approval [F99 of 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 F100 ... [F101 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

F97 Words 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)

F98 S. 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)

F99 Words in s. 7(2)(a) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 8; S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F100 Words in s. 7(5) omitted (1.10.2015) by virtue of Deregulation Act 2015 (c. 20), s. 115(7), Sch. 6 para. 20(2)(d); S.I. 2015/1732, art. 2(e)(vi)

F101 Words 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)

C92 Ss. 1-7B applied (with modifications) (E.W.) (15.3.2024) by The Water Industry (Special Administration) Regulations 2024 (S.I. 2024/205), regs. 2(2), 5(1), 43-45 (with reg. 64)

C107 S. 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)

C108 S. 7 applied (with modifications) by 2009 c. 1, s. 154(3A) (as inserted (13.3.2018) by The Small Business, Enterprise and Employment Act 2015 (Consequential Amendments, Savings and Transitional Provisions) Regulations 2018 (S.I. 2018/208), regs. 1(3), 5(6)(c))

[F102 7A Prosecution of delinquent officers of company. E+W+S

[F103 (1) This section applies where the approval of a voluntary arrangement in relation to a company has taken effect under section 4A.]

(2) [F104 If it appears to the supervisor that any past or present officer of the company has committed an offence in connection with the voluntary arrangement, the supervisor must 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 F105 ... supervisor and relating to the matter in question) as the authority requires.

• In this subsection, “the appropriate authority” means—

  (i)

  in the case of a company registered in England and Wales, the Secretary of State, and

  (ii)

  in the case of a company registered in Scotland, the Lord Advocate.

(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 [F106 the 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 [F107 the 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 M1 Perjury 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 M2 Criminal 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 F108 ... 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

F102 Ss. 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)

F103 S. 7A(1) substituted (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 3 para. 7(2) (with ss. 2(2), 5(2))

F104 Words in s. 7A(2) substituted (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 3 para. 7(3)(a) (with ss. 2(2), 5(2))

F105 Words in s. 7A(2)(b) omitted (26.6.2020) by virtue of Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 3 para. 7(3)(b) (with ss. 2(2), 5(2))

F106 Words 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)

F107 Words 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)

F108 Words in s. 7A(8) omitted (26.6.2020) by virtue of Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 3 para. 7(4) (with ss. 2(2), 5(2))

Modifications etc. (not altering text)

C92 Ss. 1-7B applied (with modifications) (E.W.) (15.3.2024) by The Water Industry (Special Administration) Regulations 2024 (S.I. 2024/205), regs. 2(2), 5(1), 43-45 (with reg. 64)

C109 S. 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)

C110 S. 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

M1 1911 c. 6.

M2 1995 c. 39.

F109 7B 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 F110 ... 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) F111 ....

Textual Amendments

F109 Ss. 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)

F110 Words in s. 7B omitted (26.6.2020) by virtue of Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 3 para. 8(a) (with ss. 2(2), 5(2))

F111 Words in s. 7B omitted (26.6.2020) by virtue of Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 3 para. 8(b) (with ss. 2(2), 5(2))

Modifications etc. (not altering text)

C92 Ss. 1-7B applied (with modifications) (E.W.) (15.3.2024) by The Water Industry (Special Administration) Regulations 2024 (S.I. 2024/205), regs. 2(2), 5(1), 43-45 (with reg. 64)

[F112 Part II E+W+S Administration

Textual Amendments

F112 Pt. 2 (s. 8) substituted (15.9.2003) for Pt. 2 (ss. 8-27) by Enterprise Act 2002 (c. 40), ss. 248(1), 279 (with savings for special administration regimes in s. 249(1)-(3)(6) and further savings in S.I. 2003/2093, art. 3); S.I. 2003/2093, art. 2(1), Sch. 1 (subject to arts. 3-8 (as amended by S.I. 2003/2332, art. 2)).

Pt. 2 as saved by 2002 c. 40, s. 249 or S.I. 2003/2093, art. 3 modified by Water Industry Act 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)); modified (1.4.1994) by Railways Act 1993 c. 43, ss. 59-62, 150(1)(c), Sch. 6 and S.I. 1994/571, art. 5 (with a transitional provision in art. 7); applied (with modifications) (1.12.1997) by Building Societies Act 1986 (c. 53), Sch. 15A (as inserted by 1997 c. 32, s. 39(2), Sch. 6 para. 1(2)(a) and S.I. 1997/2668, art. 2, Sch. Pt. I(i)); modified (1.2.2001) by Transport Act 2000 (c. 38), ss. 27-30, Sch. 1; modified (15.7.2003) by Greater London Authority Act 1999 (c. 29), ss. 220-223, 425(2), Sch. 14 (with Sch. 12 para. 9(1)) and S.I. 2003/1920, art. 2; excluded (26.12.2003) by S.I. 2003/3226, reg. 8(3)(4); applied (with modifications) and modified in part (28.11.2005) by S.I. 2005/3050, regs. 4, 14, 20, Sch. 3 paras. 1(a), 2 (with Sch. 4); applied and amended in part (30.11.2007) by S.I. 2007/3141, rules 3, 13(4), 18(1); amended (6.4.2008) by S.I. 2008/948, art. 3(1), Sch. 1 para. 101 (with arts. 6, 11 and 12); amended in part (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); amended (1.10.2009) by S.I. 2009/1972, reg. 7(a); modified in part (26.5.2015) by Deregulation Act 2015 (c. 20), s. 115(3)(n), Sch. 6 para. 25; amended (31.12.2020) by S.I. 2019/146, reg. 1(3), Sch. para. 45(2) (with regs. 4, 5); 2020 c. 1, Sch. 5 para. 1(1)

Modifications etc. (not altering text)

C111 Pt. 2 (including Sch. B1) applied (with modifications) (1.12.1994) by The Insolvent Partnerships Order 1994 (S.I. 1994/2421), art. 6(1), Sch. 2 (as amended (1.7.2005) by S.I. 2005/1516, art. 7, Sch. 1; (1.4.2013) by S.I. 2013/472, Sch. 2 para. 11(b)); (1.1.2015) by S.I. 2014/3486, arts. 1(2), 13 (with art. 3); (6.4.2017) by S.I. 2017/540, reg. 1, Sch. 2 para. 6 (with reg. 4); (19.12.2018) by S.I. 2018/1244, arts. 1(2), 19(2)(3) (with art. 3)); and (28.12.2020) (temp.) by S.I. 2020/1350, regs. 1(4), 121(3))

C112 Pts. 1, 2 modified by Company Directors Disqualification Act 1986 (c. 46), ss. 21(2), 25

C113 First 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. (as amended (1.4.2013) by S.I. 2013/472, art. 1(1), Sch. 2 para. 117; (13.3.2018) by S.I. 2018/208), regs. 1(3), 11; and (23.7.2019) by S.I. 2019/1058, regs. 1, 7)

C114 Pt. 2: power to apply or incorporate conferred (6.4.2001) by Limited Liability Partnerships Act 2000 (c. 12), s. 14; S.I. 2000/3316, art. 2

Pt. 2: 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))

C115 Pt. 2 (including Sch. B1) applied (with modifications) (1.2.2011) by The Financial Services and Markets Act 2000 (Administration Orders Relating to Insurers) Order 2010 (S.I. 2010/3023), art. 2 Sch. (with art. 6) (as amended (1.4.2013) by S.I. 2013/472, Sch. 2 para. 195(c); (7.4.2014) by S.I. 2017/400, regs. 1(2), 9; (13.3.2018) by S.I. 2018/208, regs. 1(3), 12 (with reg. 22); and (23.7.2019) by S.I. 2019/1058, regs. 1, 8)

C116 Pts. 1-4 applied (with modifications) in part (E.W.) (2.1.2013) by The Charitable Incorporated Organisations (Insolvency and Dissolution) Regulations 2012 (S.I. 2012/3013), reg. 1, Sch. para. 1(2)(a)(3)-(7) (as amended (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 3 para. 49(3) (with ss. 2(2), 5(2)); (7.7.2020) by S.I. 2020/710, regs. 1, 4 (with reg. 6) (which affecting legislation is revoked and this amendment reversed (13.8.2020) by S.I. 2020/856, regs. 1(2), 2); and (13.8.2020 immediately after the coming into force of S.I. 2020/856, reg. 2) by S.I. 2020/856, regs. 1(3), 5 (with reg. 7))

C117 Pt. 2 (including Sch. B1) applied (with modifications) (6.4.2014) by The Co-operative and Community Benefit Societies and Credit Unions (Arrangements, Reconstructions and Administration) Order 2014 (S.I. 2014/229), art. 2(2), Sch. 1 (as renamed (1.8.2014) by S.I. 2014/1815, Sch. para 33; and as amended (1.8.2014) by S.I. 2014/1822, art. 5; and (13.3.2018) by S.I. 2018/208, regs. 1(3), 15(3)(b))

C118 Pt. 2: power to apply (with modifications) conferred (20.7.2001) by Financial Services and Markets Act 2000 (c. 8), s. 360 (as amended (29.8.2023) by Financial Services and Markets Act 2023 (c. 29), s. 86(2)(e), Sch. 12 para. 1(2)); S.I. 2001/2632, art. 2(1), Sch. Pt. 1

8 Administration E+W+S

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

F112 Part II E+W+S Administration Orders

Making etc. of administration order E+W+S

9 Application for order. E+W+S

(1) An application to the court for an administration order shall be by petition presented either by the company or the directors, or by a creditor or creditors (including any contingent or prospective creditor or creditors), [F113 or by the clerk of a magistrates’ court in the exercise of the power conferred by section 87A of the Magistrates’ Courts Act 1980 (enforcement of fines imposed on companies)] or by all or any of those parties, together or separately.

(2) Where a petition is presented to the court—

(a) notice of the petition shall be given forthwith to any person who has appointed, or is or may be entitled to appoint, an administrative receiver of the company, and to such other persons as may be prescribed, and

(b) the petition shall not be withdrawn except with the leave of the court.

(3) Where the court is satisfied that there is an administrative receiver of the company, the court shall dismiss the petition unless it is also satisfied either—

(a) that the person by whom or on whose behalf the receiver was appointed has consented to the making of the order, or

(b) that, if an administration order were made, any security by virtue of which the receiver was appointed would—

[F114 (i) be void against the administrator to any extent by virtue of the provisions of Part XII of the Companies Act 1985 (registration of company charges),]

[F114 (i)(ii)] be liable to be released or discharged under sections 238 to 240 in Part VI (transactions at an undervalue and preferences),

[F114 (ii)(iii)] be avoided under section 245 in that Part (avoidance of floating charges), or

[F114 (iii)(iv)] be challengeable under section 242 (gratuitous alienations) or 243 (unfair preferences) in that Part, or under any rule of law in Scotland.

(4) Subject to subsection (3), on hearing a petition the court may dismiss it, or adjourn the hearing conditionally or unconditionally, or make an interim order or any other order that it thinks fit.

(5) Without prejudice to the generality of subsection (4), an interim order under that subsection may restrict the exercise of any powers of the directors or of the company (whether by reference to the consent of the court or of a person qualified to act as an insolvency practitioner in relation to the company, or otherwise).

10. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11 Effect of order. E+W+S

(1) On the making of an administration order—

(a) any petition for the winding up of the company shall be dismissed, and

(b) any administrative receiver of the company shall vacate office.

(2) Where an administration order has been made, any receiver of part of the company’s property shall vacate office on being required to do so by the administrator.

(3) During the period for which an administration order is in force—

(a) no resolution may be passed or order made for the winding up of the company;

(b) no administrative receiver of the company may be appointed;

[F116 (ba) no landlord or other person to whom rent is payable may exercise any right of forfeiture by peaceable re-entry in relation to premises let to the company in respect of a failure by the company to comply with any term or condition of its tenancy of such premises, except with the consent of the administrator or the leave of the court and subject (where the court gives leave) to such terms as the court may impose]

(c) no other steps may be taken to enforce any security over the company’s property, or to repossess goods in the company’s possession under any hire-purchase agreement, except with the consent of the administrator or the leave of the court and subject (where the court gives leave) to such terms as the court may impose; and

(d) no other proceedings and no execution or other legal process may be commenced or continued, and no distress may be levied, against the company or its property except with the consent of the administrator or the leave of the court and subject (where the court gives leave) to such terms as aforesaid.

(4) Where at any time an administrative receiver of the company has vacated office under subsection (1)(b), or a receiver of part of the company’s property has vacated office under subsection (2)—

(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 (subject to subsection (3) above) paid out of any property of the company which was 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.

(5) Neither an administrative receiver who vacates office under subsection (1)(b) nor a receiver who vacates office under subsection (2) is required on or after so vacating office to take any steps for the purpose of complying with any duty imposed on him by section 40 or 59 of this Act (duty to pay preferential creditors).

Textual Amendments

F116 S. 11(3)(ba) inserted (2.4.2001) by 2000 c. 39, s. 9(3); S.I. 2001/766, art. 2(1)(b) (subject to transitional provisions in art. 3)

Modifications etc. (not altering text)

C133 S. 11 applied (with modifications) by Water Act 1989 (c. 15, SIF 130), s. 23, Sch. 6 Pt. I para. 1 (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)

Ss. 11-23, 27 applied (with modifications) (1.2.2001) by 2000 c. 38, s. 30, Sch. 1 Pt. I para. 2; S.I. 2001/57, art. 3(1), Sch. 2 Pt. I (subject to transitional provision and saving in art. 3(1), Sch. 2 Pt. II)

C134 Ss. 11-15 modified (E.W) (1.12.1991) by Water Industry Act 1991 (c. 56), ss. 23(3), 223(2), Sch. 3 Pts. I, II paras. 1, 12(2) (with ss. 82(3), 186(1), 222(1), Sch. 14 para. 6)

Ss. 11-23 modified (1.4.1994) by 1993 c. 43, ss. 59(3), 150(1)(c), Sch. 6 Pt. I para. 1; S.I. 1994/571, art. 5 (with transitional provision in art. 7)

Ss. 11-23 modified (1.4.1994) by 1993 c. 43, ss. 59(3), 150(1)(c), Sch. 6 Pt. II para. 12(1); S.I. 1994/571, art. 5 (with transitional provision in art. 7)

Ss. 11-23, 27 modified (1.2.2001) by 2000 c. 38, s. 215, Sch. 16 para 2; S.I. 2001/57, art. 3(1), Sch. 2 Pt. I (with transitional provision and saving in art. 3(1), Sch. 2 Pt. II)

Ss. 11-23, 27 modified (15.7.2003) by 1999 c. 29, ss. 220(3), 425(2), Sch. 14 paras. 1-11, 12-19 (with Sch. 12 para. 9(1)); S.I. 2003/1920, art. 2(b)

C135 S. 11(2) excluded (25.4.1991) by Companies Act 1989 (c. 40), ss. 154, 155, 175(1), 182(4), Sch. 22 para. 11(2); S.I. 1991/878, art. 2, Sch.

S. 11(2) excluded (15.8.1995) by S.I. 1995/2049, reg. 21(2)(3)

S. 11(2) excluded (11.12.1999) by S.I. 1999/2979, reg. 19(1)

C136 S. 11(2) excluded by The Financial Market and Insolvency (Settlement Finality) Regulations 1999 (S.I. 1999/2979), reg. 19(1ZA) (as inserted 1.10.2009 by The Financial Markets and Insolvency (Settlement Finality) (Amendment) Regulations 2009 (S.I. 2009/1972), reg. 7(a))

C137 S. 11(3) excluded (25.4.1991) by Companies Act 1989 (c. 40), ss. 154, 155, 161(4), 182(4), Sch. 22 para. 5(2); S.I. 1991/878, art. 2, Sch.

C138 S. 11(3)(c) excluded (25.4.1991) by Companies Act 1989 (c. 40), ss. 154, 155, 175(1)(a), 182(4), Sch. 22 para. 11(1); S.I. 1991/878, art. 2, Sch.

S. 11(3)(c) excluded (15.8.1995) by S.I. 1995/2049, reg. 21(2)(3)

S. 11(3)(c) excluded (11.12.1999) by S.I. 1999/2979, reg. 19(1)(a)

C139 s. 11(3)(c) excluded by The Financial Market and Insolvency (Settlement Finality) Regulations 1999 (S.I. 1999/2979), reg. 19(1ZA) (as inserted 1.10.2009 by The Financial Markets and Insolvency (Settlement Finality) (Amendment) Regulations 2009 (S.I. 2009/1972), reg. 7(a))

C140 S. 11(3)(d) modified (25.4.1991) by Companies Act 1989 (c. 40), s. 182(4), Sch. 22 para. 12(4); S.I. 1991/878, art. 2, Sch.

12 Notification of order. E+W+S

(1) Every invoice, order for goods or business letter which, at a time when an administration order is in force in relation to a company, is issued by or on behalf of the company or the administrator, being a document on or in which the company’s name appears, shall also contain the administrator’s name and a statement that the affairs, business and property of the company are being managed by the administrator.

(2) If default is made in complying with this section, the company and any of the following persons who without reasonable excuse authorises or permits the default, namely, the administrator and any officer of the company, is liable to a fine.

Administrators E+W+S

13 Appointment of administrator. E+W+S

(1) The administrator of a company shall be appointed either by the administration order or by an order under the next subsection.

(2) If a vacancy occurs by death, resignation or otherwise in the office of the administrator, the court may by order fill the vacancy.

(3) An application for an order under subsection (2) may be made—

(a) by any continuing administrator of the company; or

(b) where there is no such administrator, by a creditors’ committee established under section 26 below; or

(c) where there is no such administrator and no such committee, by the company or the directors or by any creditor or creditors of the company.

14 General powers. E+W+S

(1) The administrator of a company—

(a) may do all such things as may be necessary for the management of the affairs, business and property of the company, and

(b) without prejudice to the generality of paragraph (a), has the powers specified in Schedule 1 to this Act;

and in the application of that Schedule to the administrator of a company the words “he” and “him” refer to the administrator.

(2) The administrator also has power—

(a) to remove any director of the company and to appoint any person to be a director of it, whether to fill a vacancy or otherwise, and

(b) to call any meeting of the members or creditors of the company.

(3) The administrator may apply to the court for directions in relation to any particular matter arising in connection with the carrying out of his functions.

(4) Any power conferred on the company or its officers, whether by this Act or the Companies Act or by the memorandum or articles of association, which could be exercised in such a way as to interfere with the exercise by the administrator of his powers is not exercisable except with the consent of the administrator, which may be given either generally or in relation to particular cases.

(5) In exercising his powers the administrator is deemed to act as the company’s agent.

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

15 Power to deal with charged property, etc. E+W+S

(1) The administrator of a company may dispose of or otherwise exercise his powers in relation to any property of the company which is subject to a security to which this subsection applies as if the property were not subject to the security.

(2) Where, on an application by the administrator, the court is satisifed that the disposal (with or without other assets) of—

(a) any property of the company subject to a security to which this subsection applies, or

(b) any goods in the possession of the company under a hire-purchase agreement,

would be likely to promote the purpose or one or more of the purposes specified in the administration order, the court may by order authorise the administrator to dispose of the property as if it were not subject to the security or to dispose of the goods as if all rights of the owner under the hire-purchase agreement were vested in the company.

(3) Subsection (1) applies to any security which, as created, was a floating charge; and subsection (2) applies to any other security.

(4) Where property is disposed of under subsection (1), the holder of the security has the same priority in respect of any property of the company directly or indirectly representing the property disposed of as he would have had in respect of the property subject to the security.

(5) It shall be a condition of an order under subsection (2) 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 goods 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 or payable under the hire-purchase agreement.

(6) Where a condition imposed in pursuance of subsection (5) relates to two or more securities, that condition requires 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.

(7) An office copy of an order under subsection (2) shall, within 14 days after the making of the order, be sent by the administrator to the registrar of companies.

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

(9) References in this section to hire-purchase agreements include conditional sale agreements, chattel leasing agreements and retention of title agreements.

16 Operation of s. 15 in Scotland. E+W+S

(1) Where property is disposed of under section 15 in its application to Scotland, the administrator shall grant to the disponee an appropriate document of transfer or conveyance of the property, and—

(a) that document, or

(b) where any recording, intimation or registration of the document is a legal requirement for completion of title to the property, that recording, intimation or registration,

has the effect of disencumbering the property of or, as the case may be, freeing the property from the security.

(2) Where goods in the possession of the company under a hire-purchase agreement, conditional sale agreement, chattel leasing agreement or retention of title agreement are disposed of under section 15 in its application to Scotland, the disposal has the effect of extinguishing, as against the disponee, all rights of the owner of the goods under the agreement.

17 General duties. E+W+S

(1) The administrator of a company shall, on his appointment, take into his custody or under his control all the property to which the company is or appears to be entitled.

(2) The administrator shall manage the affairs, business and property of the company—

(a) at any time before proposals have been approved (with or without modifications) under section 24 below, in accordance with any directions given by the court, and

(b) at any time after proposals have been so approved, in accordance with those proposals as from time to time revised, whether by him or a predecessor of his.

(3) The administrator shall summon a meeting of the company’s creditors if—

(a) he is requested, in accordance with the rules, to do so by one-tenth, in value, of the company’s creditors, or

(b) he is directed to do so by the court.

18 Discharge or variation of administration order. E+W+S

(1) The administrator of a company may at any time apply to the court for the administration order to be discharged, or to be varied so as to specify an additional purpose.

(2) The administrator shall make an application under this section if—

(a) it appears to him that the purpose or each of the purposes specified in the order either has been achieved or is incapable of achievement, or

(b) he is required to do so by a meeting of the company’s creditors summoned for the purpose in accordance with the rules.

(3) On the hearing of an application under this section, the court may by order discharge or vary the administration order and make such consequential provision as it thinks fit, or adjourn the hearing conditionally or unconditionally, or make an interim order or any other order it thinks fit.

(4) Where the administration order is discharged or varied the administrator shall, within 14 days after the making of the order effecting the discharge or variation, send an office copy of that order to the registrar of companies.

(5) If the administrator without reasonable excuse fails to comply with subsection (4), he is liable to a fine and, for continued contravention, to a daily default fine.

19. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20 Release of administrator. E+W+S

(1) A person who has ceased to be the administrator of a company has his release with effect from the following time, that is to say—

(a) in the case of a person who has died, the time at which notice is given to the court in accordance with the rules that he has ceased to hold office;

(b) in any other case, such time as the court may determine.

(2) Where a person has his release under this section, he is, with effect from the time specified above, discharged from all liability both in respect of acts or omissions of his in the administration and otherwise in relation to his conduct as administrator.

(3) However, nothing in this section prevents the exercise, in relation to a person who has had his release as above, of the court’s powers under section 212 in Chapter X of Part IV (summary remedy against delinquent directors, liquidators, etc.).

Ascertainment and investigation of company’s affairs E+W+S

21 Information to be given by administrator. E+W+S

(1) Where an administration order has been made, the administrator shall—

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

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

(2) Where an administration order has been made, the administrator shall also, within 14 days after the making of the order, send an office copy of the order to the registrar of companies and to such other persons as may be prescribed.

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

22 Statement of affairs to be submitted to administrator. E+W+S

(1) Where an administration order has been made, the administrator 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) The statement shall be verified by affidavit 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 administration order;

(c) those who are in the company’s employment or have been in its employment within that year, and are in the administrator’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 administrator, 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 administrator.

(5) The administrator, 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 administrator 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.

Administrator’s proposals E+W+S

23 Statement of proposals. E+W+S

(1) Where an administration order has been made, the administrator shall, within 3 months (or such longer period as the court may allow) after the making of the order—

(a) send to the registrar of companies and (so far as he is aware of their addresses) to all creditors a statement of his proposals for achieving the purpose or purposes specified in the order, and

(b) lay a copy of the statement before a meeting of the company’s creditors summoned for the purpose on not less than 14 days’ notice.

(2) The administrator shall also, within 3 months (or such longer period as the court may allow) after the making of the order, either—

(a) send a copy of the statement (so far as he is aware of their addresses) to all members of the company, or

(b) publish in the prescribed manner a notice stating an address to which members of the company should write for copies of the statement to be sent to them free of charge.

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

24 Consideration of proposals by creditors’ meeting. E+W+S

(1) A meeting of creditors summoned under section 23 shall decide whether to approve the administrator’s proposals.

(2) The meeting may approve the proposals with modifications, but shall not do so unless the administrator consents to each modification.

(3) Subject as above, the meeting shall be conducted in accordance with the rules.

(4) After the conclusion of the meeting in accordance with the rules, the administrator shall report the result of the meeting to the court and shall give notice of that result to the registrar of companies and to such persons as may be prescribed.

(5) If a report is given to the court under subsection (4) that the meeting has declined to approve the administrator’s proposals (with or without modifications), the court may by order discharge the administration order and make such consequential provision as it thinks fit, or adjourn the hearing conditionally or unconditionally, or make an interim order or any other order that it thinks fit.

(6) Where the administration order is discharged, the administrator shall, within 14 days after the making of the order effecting the discharge, send an office copy of that order to the registrar of companies.

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

25 Approval of substantial revisions. E+W+S

(1) This section applies where—

(a) proposals have been approved (with or without modifications) under section 24, and

(b) the administrator proposes to make revisions of those proposals which appear to him substantial.

(2) The administrator shall—

(a) send to all creditors of the company (so far as he is aware of their addresses) a statement in the prescribed form of his proposed revisions, and

(b) lay a copy of the statement before a meeting of the company’s creditors summoned for the purpose on not less than 14 days’ notice;

and he shall not make the proposed revisions unless they are approved by the meeting.

(3) The administrator shall also either—

(a) send a copy of the statement (so far as he is aware of their addresses) to all members of the company, or

(b) publish in the prescribed manner a notice stating an address to which members of the company should write for copies of the statement to be sent to them free of charge.

(4) The meeting of creditors may approve the proposed revisions with modifications, but shall not do so unless the administrator consents to each modification.

(5) Subject as above, the meeting shall be conducted in accordance with the rules.

(6) After the conclusion of the meeting in accordance with the rules, the administrator shall give notice of the result of the meeting to the registrar of companies and to such persons as may be prescribed.

Miscellaneous E+W+S

26 Creditors’ committee. E+W+S

(1) Where a meeting of creditors summoned under section 23 has approved the administrator’s proposals (with or without modifications), the meeting may, if it thinks fit, 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 administrator to attend before it at any reasonable time and furnish it with such information relating to the carrying out of his functions as it may reasonably require.

27. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part III E+W+S Receivership

Modifications etc. (not altering text)

C181 Pts. 1-7 (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

C182 Pt. 3 (ss. 28-72) extended by S.I. 1989/638, regs. 19(1), 21

C183 First 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. (as amended (1.4.2013) by S.I. 2013/472, art. 1(1), Sch. 2 para. 117; and (13.3.2018) by S.I. 2018/208, regs. 1(3), 11

C184 Pt. 3: power to apply or incorporate conferred (6.4.2001) by 2000 c. 12, s. 14; S.I. 2000/3316, art. 2

C185 Pts. 1-4 applied in part (with modifications) (E.W.) (2.1.2013) by The Charitable Incorporated Organisations (Insolvency and Dissolution) Regulations 2012 (S.I. 2012/3013), reg. 1, Sch. para. 1(2)(a)(3)-(7) (as amended (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 3 para. 49(3) (with ss. 2(2), 5(2)); (7.7.2020) by S.I. 2020/710, regs. 1, 4 (with reg. 6) (which affecting legislation is revoked and this amendment reversed (13.8.2020) by S.I. 2020/85), regs. 1(2), 2); and (13.8.2020 immediately after the coming into force of S.I. 2020/856, reg. 2) by S.I. 2020/856, regs. 1(3), 5 (with reg. 7))

C186 Pt. 3 applied (with modifications) by Building Societies Act 1986 (1986 c. 53), Sch. 15A Pt. 2 (as amended (28.6.2016) by S.I. 2016/679, art. 1(1)(4), 4(2)(3); and (13.3.2018) by S.I. 2018/208, regs. 1(3), 2(3))

Chapter I E+W+S Receivers and Managers (England and Wales)

Modifications etc. (not altering text)

C187 Pt. 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 provisions E+W+S

[F123 28 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

F123 S. 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 F124 . . . 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 F124 . . . 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

F124 Words 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.

[F126 31 Disqualification of bankrupt [F125 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,

[F127 (aa) a moratorium period under a debt relief order applies in relation to him,] or

(b) a bankruptcy restrictions order [F128 or 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

F125 S. 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

F126 S. 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))

F127 S. 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

F128 Words 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 court E+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)

C188 S. 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 receivership E+W+S

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

[F129 (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.

Textual Amendments

F129 S. 39(1) substituted (1.10.2008) by The Companies (Trading Disclosures) (Insolvency) Regulations 2008 (S.I. 2008/1897), reg. 2(1)

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.

Modifications etc. (not altering text)

C189 S. 40 excluded (6.3.2008) by The Regulated Covered Bonds Regulations 2008 (S.I. 2008/346), reg. 46, Sch. para. 2(1)

C190 S. 40 applied (11.12.1999) by The Financial Market and Insolvency (Settlement Finality) Regulations 1999 (S.I. 1999/2979), reg. 14(5)(a)(iii) (as substituted (1.10.2009) by The Financial Markets and Insolvency (Settlement Finality) (Amendment) Regulations 2009 (S.I. 2009/1972), reg. 4(d)(iii))

C191 S. 40 excluded by S.I. 2003/3226, reg. 10(2A) (as inserted (6.4.2011) by The Financial Markets and Insolvency (Settlement Finality and Financial Collateral Arrangements) (Amendment) Regulations 2010 (S.I. 2010/2993), reg. 4(8)(a))

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)

C192 S. 41(1)(a) amended (1.12.2001) by 2000 c. 8, s. 363(3); S.I. 2001/3538, art. 2(1)

C193 S. 41(2) modified (E.W.) (31.1.2019) by The Further Education Bodies (Insolvency) Regulations 2019 (S.I. 2019/138), regs. 1(1), 8 (with regs. 1(2), 3(a)(ii))

Administrative receivers: general E+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) [F130 A 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

F130 Words 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)

C194 S. 43 excluded (6.3.2008) by The Regulated Covered Bonds Regulations 2008 (S.I. 2008/346), reg. 46, Sch. para. 2(1)

C195 S. 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 [F131 , 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.

[F132 (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.

F133 (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

F131 Words 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)

F132 S. 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)

F133 S. 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 [F134 and, for continued contravention, to a daily default fine].

Textual Amendments

F134 Words repealed (prosp.) by Companies Act 1989 (c. 40, SIF 27), ss. 107, 212, 213(2), 215(2), Sch. 16 para. 3(3), Sch. 24

Administrative receivers: ascertainment and investigation of company’s affairs E+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 [F135 a 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.

Textual Amendments

F135 Words in s. 47(2) substituted (6.4.2010) by The Legislative Reform (Insolvency) (Miscellaneous Provisions) Order 2010 (S.I. 2010/18), art. 5(1)

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 [F136 , 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 [F137 , 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,

F138 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F139 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(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

F136 Words in s. 48(1) inserted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 12(2); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F137 Words in s. 48(2)(a) inserted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 12(3)(a); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F138 Words in s. 48(2) omitted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 12(3)(a); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F139 S. 48(3) omitted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 12(4); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

Modifications etc. (not altering text)

C196 S. 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) [F140 Where 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

F140 Words in s. 49(1) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 13; S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

Modifications etc. (not altering text)

C197 S. 49 amended (1.12.2001) by 2000 c. 8, s. 363(5)(b); S.I. 2001/3538, art. 2(1)

Chapter II S Receivers (Scotland)

50 Extent of this Chapter. S

This Chapter extends to Scotland only.

Modifications etc. (not altering text)

C198 Ss. 50-52 applied (with modifications) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C199 Ss. 50-52 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

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 [F141 a company registered under the Companies Act 2006] or not)

[F142 (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 F143 ... 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.

F144 (2ZA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F145 (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

[F146 (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 [F147 or 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 [F148 ; and

• “bankruptcy restrictions order” means—

  (a)

  a bankruptcy restrictions order made under section [F149 155 of the Bankruptcy (Scotland) Act 2016];

  (b)

  F150 ...

  (c)

  a bankruptcy restrictions order made under paragraph 1 of Schedule 4A to this Act; or

  (d)

  a bankruptcy restrictions undertaking entered into under paragraph 7 of that Schedule.

• [F151 “the EU Regulation” is [F152 Regulation (EU) 2015/848 of the European Parliament and of the Council] on insolvency proceedings [F153 as that Regulation has effect in the law of the European Union];

• “court” is to be construed in accordance with [F154 Article 2(6)] of the EU Regulation;

• “insolvency proceedings” is to be construed in accordance with [F155 Article 2(4)] of the EU Regulation.]]

Textual Amendments

F141 Words 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)

F142 Words in s. 51(1) substituted (17.3.2011) by The Insolvency Act 1986 Amendment (Appointment of Receivers) (Scotland) Regulations 2011 (S.S.I. 2011/140), reg. 2(a)

F143 Words in s. 51(1)(b) omitted (31.12.2020) by virtue of The Insolvency (EU Exit) (Scotland) (Amendment) Regulations 2019 (S.S.I. 2019/94), regs. 1, 2(2)(a) (with reg. 9) (as amended by S.S.I. 2020/337, regs. 1, 2); 2020 c. 1, Sch. 5 para. 1(1)

F144 S. 51(2ZA) repealed (1.4.2016) by The Public Services Reform (Insolvency) (Scotland) Order 2016 (S.S.I. 2016/141), arts. 1(2), 2 (with arts. 14, 15)

F145 S. 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))

F146 S. 51(3)(ba) inserted (1.4.2008) by Bankruptcy and Diligence etc. (Scotland) Act 2007 (asp 3), ss. 3(2), 227(3) (with s. 223); S.S.I. 2008/115, art. 3(1)(a) (with arts. 5, 6, 10); as amended by S.S.I. 2011/31, art. 5

F147 Words in s. 51(5) inserted (1.4.2008) by Bankruptcy and Diligence etc. (Scotland) Act 2007 (asp 3), ss. 3(3), 227(3) (with s. 223); S.S.I. 2008/115, art. 3(1)(a) (with arts. 5, 6, 10); as amended by S.S.I. 2011/31, art. 5

F148 Words in s. 51(6) inserted (1.4.2008) by Bankruptcy and Diligence etc. (Scotland) Act 2007 (asp 3), ss. 3(4), 227(3) (with s. 223); S.S.I. 2008/115, art. 3(1)(a) (with arts. 5, 6, 10); as amended by S.S.I. 2011/31, art. 5

F149 Words in s. 51(6) substituted (30.11.2016) by The Bankruptcy (Scotland) Act 2016 (Consequential Provisions and Modifications) Order 2016 (S.I. 2016/1034), art. 1, Sch. 1 para. 4(2)

F150 Words 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)

F151 Words in s. 51(6) inserted (17.3.2011) by The Insolvency Act 1986 Amendment (Appointment of Receivers) (Scotland) Regulations 2011 (S.S.I. 2011/140), reg. 2(c)

F152 Words in s. 51(6) substituted (26.6.2017) by The Insolvency (Regulation (EU) 2015/848) (Miscellaneous Amendments) (Scotland) Regulations 2017 (S.S.I. 2017/210), regs. 1, 2(2)(a) (with reg. 9)

F153 Words in s. 51(6) inserted (31.12.2020) by The Insolvency (EU Exit) (Scotland) (Amendment) Regulations 2019 (S.S.I. 2019/94), regs. 1, 2(2)(b) (with reg. 9) (as amended by S.S.I. 2020/337, regs. 1, 2); 2020 c. 1, Sch. 5 para. 1(1)

F154 Words in s. 51(6) substituted (26.6.2017) by The Insolvency (Regulation (EU) 2015/848) (Miscellaneous Amendments) (Scotland) Regulations 2017 (S.S.I. 2017/210), regs. 1, 2(2)(b) (with reg. 9)

F155 Words in s. 51(6) substituted (26.6.2017) by The Insolvency (Regulation (EU) 2015/848) (Miscellaneous Amendments) (Scotland) Regulations 2017 (S.S.I. 2017/210), regs. 1, 2(2)(c) (with reg. 9)

Modifications etc. (not altering text)

C199 Ss. 50-52 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C200 Ss. 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)

C199 Ss. 50-52 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C201 Ss. 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 [F156 an 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 [F157 and, for continued contravention, to a daily default fine].

F158 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F159 (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 [F160 register].

(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

F156 Words 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))

F157 Words repealed (prosp.) by Companies Act 1989 (c. 40, SIF 27), ss. 107, 212, 213(2), 215(2), Sch. 16 para. 3(3), Sch. 24

F158 S. 53(3) repealed by Law Reform (Miscellaneous Provisions) (Scotland) Act 1990 (c. 40, SIF 76:2), s. 74, Sch. 8 Pt. II para. 35, Sch. 9

F159 S. 53(4) substituted (1.8.1995) by 1995 c. 7, ss. 14(1), 15(2), Sch. 4 para. 58(b) (with ss. 9(3)(5)(7), 13, 14(3), Sch. 2 para. 3(2))

F160 Word in s. 53(5) substituted (6.4.2013) by The Companies Act 2006 (Amendment of Part 25) Regulations 2013 (S.I. 2013/600), reg. 1, Sch. 2 para. 2(2) (with reg. 6)

Modifications etc. (not altering text)

C202 S. 53 applied in part (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C203 S. 53(1) amended (1.7.1999) by 1998 c. 46, s. 125, Sch. 8 para. 23(2)(3); S.I. 1998/3178, art. 2 (as amended (28.6.2016) by The Building Societies (Floating Charges and Other Provisions) Order 2016 (S.I. 2016/679), arts. 1(1), 6)

C204 S. 53(1)(2)(4)(6)(7) applied (with modifications) (6.4.2001) by S.S.I. 2001/128, reg. 4, Sch. 2

C205 S. 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 [F161 and, 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 [F162 register].

(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

F161 Words repealed (prosp.) by Companies Act 1989 (c. 40, SIF 27), ss. 107, 212, 213(2), 215(2), Sch. 16 para. 3(3), Sch. 24

F162 Word in s. 54(4) substituted (6.4.2013) by The Companies Act 2006 (Amendment of Part 25) Regulations 2013 (S.I. 2013/600), reg. 1, Sch. 2 para. 2(2) (with reg. 6)

Modifications etc. (not altering text)

C206 S. 54 applied in part (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C207 S. 54(1)(2)(3)(5)(6)(7) applied (with modifications) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C208 S. 54(3) amended (1.7.1999) by 1998 c. 46, s. 125, Sch. 8 para. 23(2)(3); S.I. 1998/3178, art. 2 (as amended (28.6.2016) by The Building Societies (Floating Charges and Other Provisions) Order 2016 (S.I. 2016/679), arts. 1(1), 6)

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)

C209 Ss. 55-58 applied (with modifications) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C210 Ss. 55-58 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

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)

C210 Ss. 55-58 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C211 Ss. 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.

[F163 (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 [F164 , to the extent of any qualifying liability,]on any contract of employment adopted by him in the carrying out of those functions.

[F165 (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.

F166 (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

F163 S. 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)

F164 Words 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)

F165 S. 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)

F166 S. 57(2D) repealed (1.4.2016) by The Public Services Reform (Insolvency) (Scotland) Order 2016 (S.S.I. 2016/141), arts. 1(2), 3 (with arts. 14, 15)

Modifications etc. (not altering text)

C210 Ss. 55-58 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C212 Ss. 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)

C210 Ss. 55-58 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C213 Ss. 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.

Modifications etc. (not altering text)

C214 S. 59 applied (11.12.1999) by The Financial Market and Insolvency (Settlement Finality) Regulations 1999 (S.I. 1999/2979), reg. 14(5)(a)(iii) (as substituted (1.10.2009) by The Financial Markets and Insolvency (Settlement Finality) (Amendment) Regulations 2009 (S.I. 2009/1972), reg. 4(d)(iii))

C215 S. 59 excluded by S.I. 2003/3226, reg. 10(2A) (as inserted (6.4.2011) by The Financial Markets and Insolvency (Settlement Finality and Financial Collateral Arrangements) (Amendment) Regulations 2010 (S.I. 2010/2993), reg. 4(8)(a))

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.

Modifications etc. (not altering text)

C216 S. 60 applied in part (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C217 S. 60(1)(e) applied (11.12.1999) by The Financial Market and Insolvency (Settlement Finality) Regulations 1999 (S.I. 1999/2979), reg. 14(5)(a)(iii) (as substituted (1.10.2009) by The Financial Markets and Insolvency (Settlement Finality) (Amendment) Regulations 2009 (S.I. 2009/1972), reg. 4(d)(iii))

C218 S. 60(1)(e) excluded by S.I. 2003/3226, reg. 10(2A) (as inserted (6.4.2011) by The Financial Markets and Insolvency (Settlement Finality and Financial Collateral Arrangements) (Amendment) Regulations 2010 (S.I. 2010/2993), reg. 4(8)(a))

C219 S. 60(2)(3) applied (with modifications) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

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.

[F167 (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) F168 . . . 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

F167 S. 61(1A) inserted (22.4.2009) by Bankruptcy and Diligence etc. (Scotland) Act 2007 (asp 3), ss. 155(2), 227(3) (with s. 223); S.S.I. 2009/67, art. 3(a) (with arts. 5, 6); as amended by S.S.I. 2011/31, art. 5

F168 Words 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)

C220 S. 61 excluded (25.4.1991) by Companies Act 1989 (c. 40), ss. 154, 155, 175(3)(b); S.I. 1991/878, art. 2, Sch. .

C221 S. 61 excluded (15.8.1995) by S.I. 1995/2049, reg. 21(4)(b)

C222 S. 61 applied (with modifications) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C223 S. 61 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C224 S. 61(6) amended (1.7.1999) by 1998 c. 46, s. 125, Sch. 8 para. 23(2)(3); S.I. 1998/3178, art. 2 (as amended (28.6.2016) by The Building Societies (Floating Charges and Other Provisions) Order 2016 (S.I. 2016/679), arts. 1(1), 6)

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 [F169 register].

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 [F170 the company is in administration,] under Part II of this Act F171 . . . .

Textual Amendments

F169 Word in s. 62(5) substituted (6.4.2013) by The Companies Act 2006 (Amendment of Part 25) Regulations 2013 (S.I. 2013/600), reg. 1, Sch. 2 para. 2(2) (with reg. 6)

F170 Words in s. 62(6) substituted (15.9.2003) by The Enterprise Act 2002 (Insolvency) Order 2003 (S.I. 2003/2096), art. 4, Sch. Pt. 1 para. 9(a) (with art. 6)

F171 Words in s. 62(6) repealed (15.9.2003) by The Enterprise Act 2002 (Insolvency) Order 2003 (S.I. 2003/2096), art. 4, Sch. Pt. 1 para. 9(b) (with art. 6)

Modifications etc. (not altering text)

C225 S. 62 applied (with modifications) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C226 S. 62 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C227 S. 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 (as amended (28.6.2016) by The Building Societies (Floating Charges and Other Provisions) Order 2016 (S.I. 2016/679), arts. 1(1), 6)

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)

C228 S. 63 amended (1.12.2001) by 2000 c. 8, s. 363(2); S.I. 2001/3538, art. 2(1)

C229 Ss. 63-66 applied (with modifications) (6.4.2001) by S.S.I. 2001/128, reg. 4, Sch. 2, Sch. 3

C230 Ss. 63-66 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

64 Notification that receiver appointed. S

[F172 (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

F172 S. 64(1) substituted (1.10.2008) by The Companies (Trading Disclosures) (Insolvency) Regulations 2008 (S.I. 2008/1897), reg. 2(2)

Modifications etc. (not altering text)

C230 Ss. 63-66 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C231 Ss. 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)

C230 Ss. 63-66 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C232 Ss. 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 [F173 contain 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

F173 Words in s. 66(2) substituted (1.4.2016 for specified purposes; 6.4.2019 in so far as not already in force) by The Public Services Reform (Insolvency) (Scotland) Order 2016 (S.S.I. 2016/141), arts. 1(2)-(4), 4 (with arts. 14, 15) (see S.I. 2019/816, reg. 4(a))

Modifications etc. (not altering text)

C230 Ss. 63-66 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C233 Ss. 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 [F174 , 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 [F175 , 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,

F176 ...

F177 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(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

F174 Words in s. 67(1) inserted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 14(2); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F175 Words in s. 67(2)(a) inserted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 14(3)(a); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F176 Words in s. 67(2) omitted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 14(3)(b); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F177 S. 67(3) omitted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 14(4); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

Modifications etc. (not altering text)

C234 S. 67 applied (with modifications) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C235 S. 67 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C236 S. 67(1) amended (1.7.1999) by 1998 c. 46, s. 125, Sch. 8 para. 23(2)(3); S.I. 1998/3178, art. 2 (as amended (28.6.2016) by The Building Societies (Floating Charges and Other Provisions) Order 2016 (S.I. 2016/679), arts. 1(1), 6)

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

68 Committee of creditors S

(1) [F178 Where 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

F178 Words in s. 68(1) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 15; S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

Modifications etc. (not altering text)

C237 S. 68 amended (1.12.2001) by 2000 c. 8, s. 363(5)(b); S.I. 2001/3538, art. 2(1)

C238 S. 68 applied (with modifications) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C239 S. 68 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

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)

C240 S. 69 applied (with modifications) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C241 S. 69 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C242 S. 69(1)(a) amended (1.12.2001) by 2000 c. 8, s. 363(3); S.I. 2001/3538, art. 2(1)

C243 S. 69(2) amended (1.7.1999) by 1998 c. 46, s. 125, Sch. 8 para. 23(2)(3); S.I. 1998/3178, art. 2 (as amended (28.6.2016) by The Building Societies (Floating Charges and Other Provisions) Order 2016 (S.I. 2016/679), arts. 1(1), 6)

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—

• “company” means an incorporated company (whether or not [F179 a company registered under the Companies Act 2006]) which the Court of Session has jurisdiction to wind up;

• “fixed security”, in relation to any property of a company, means any security, other than a floating charge or a charge having the nature of a floating charge, which on the winding up of the company in Scotland would be treated as an effective security over that property, and (without prejudice to that generality) includes a security over that property, being—

  (a)

  F180 a heritable security within the meaning of the M3 Conveyancing and Feudal Reform (Scotland) Act 1970[F181 ; or

  (b)

  a statutory pledge within the meaning given by section 113(1) of the Moveable Transactions (Scotland) Act 2023;]

• “instrument of appointment” has the meaning given by section 53(1);

• [F182 “prescribed” means prescribed by regulations made under this Chapter by the Secretary of State;]

• [F183 “prescribed fee” means the fee prescribed by regulations made under this Chapter by the Secretary of State;]

• “receiver” means a receiver of such part of the property of the company as is subject to the floating charge by virtue of which he has been appointed under section 51;

• “[F184 register]” means the register kept by the registrar of companies for the purposes of [F185 Chapter 2 of Part 25 of the Companies Act 2006];

• “secured debenture” means a bond, debenture, debenture stock or other security which, either itself or by reference to any other instrument, creates a floating charge over all or any part of the property of the company, but does not include a security which creates no charge other than a fixed security; and

• “series of secured debentures” means two or more secured debentures created as a series by the company in such a manner that the holders thereof are entitled pari passu to the benefit of the floating charge.

(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

F179 Words 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)

F180 Words in s. 70(1) renumbered (1.4.2025) as para. (a) of the definition by Moveable Transactions (Scotland) Act 2023 (asp 3), ss. 61(a), 121(2); S.S.I. 2024/378, reg. 2

F181 Words in s. 70(1) inserted (1.4.2025) by Moveable Transactions (Scotland) Act 2023 (asp 3), ss. 61(b), 121(2); S.S.I. 2024/378, reg. 2

F182 Words in s. 70(1) repealed (1.10.2017 for specified purposes) by The Public Services Reform (Corporate Insolvency and Bankruptcy) (Scotland) Order 2017 (S.S.I. 2017/209), arts. 1(3), 2(a)

F183 Words in s. 70(1) inserted (1.10.2017 for specified purposes) by The Public Services Reform (Corporate Insolvency and Bankruptcy) (Scotland) Order 2017 (S.S.I. 2017/209), arts. 1(3), 2(b)

F184 Words in s. 70(1) substituted (6.4.2013) by The Companies Act 2006 (Amendment of Part 25) Regulations 2013 (S.I. 2013/600), reg. 1, Sch. 2 para. 2(3) (with reg. 6)

F185 Words 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)

C244 S. 70 applied (with modifications) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C245 S. 70 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

Marginal Citations

M3 1970 c. 35

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)

C246 S. 71 applied (with modifications) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C247 S. 71 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

Chapter III E+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.

[F186 CHAPTER IV E+W+S PROHIBITION OF APPOINTMENT OF ADMINISTRATIVE RECEIVER

Textual Amendments

F186 Pt. 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 receiver E+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)—

• “holder of a qualifying floating charge in respect of a company’s property” has the same meaning as in paragraph 14 of Schedule B1 to this Act, and

• “administrative receiver” has the meaning given by section 251.

(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 [F187 sections 72B to 72GA] .

Subordinate Legislation Made

P1 S. 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

F187 Words in s. 72A(6) substituted (15.9.2003) by The Insolvency Act 1986 (Amendment) (Administrative Receivership and Urban Regeneration etc.) Order 2003 (S.I. 2003/1832), arts. 1, 2(a); S.I. 2003/2093, art. 2(1), Sch. 1

Modifications etc. (not altering text)

C248 S. 72A applied (with modifications) (E.W.) (15.3.2024) by The Water Industry (Special Administration) Regulations 2024 (S.I. 2024/205), regs. 2(2), 5(1), 46 (with reg. 64)

72B First exception: capital market E+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)—

• “capital market arrangement” means an arrangement of a kind described in paragraph 1 of Schedule 2A, and

• “capital market investment” means an investment of a kind described in paragraph 2 or 3 of that Schedule.

72C Second exception: public-private partnership E+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—

• “step-in rights” has the meaning given by paragraph 6 of Schedule 2A, and

• “project company” has the meaning given by paragraph 7 of that Schedule.

72D Third exception: utilities E+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.

[F188 72DA Exception in respect of urban regeneration projects E+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—

• “building” includes any structure or erection, and any part of a building as so defined, but does not include plant and machinery comprised in a building,

• “building operations” includes—

  (a)

  demolition of buildings,

  (b)

  filling in of trenches,

  (c)

  rebuilding,

  (d)

  structural alterations of, or additions to, buildings and

  (e)

  other operations normally undertaken by a person carrying on business as a builder,

• “designated disadvantaged area” means an area designated as a disadvantaged area under section 92 of the Finance Act 2001,

• “engineering operations” includes the formation and laying out of means of access to highways,

• “project company” has the meaning given by paragraph 7 of Schedule 2A,

• “step-in rights” has the meaning given by paragraph 6 of that Schedule,

• “substance” means any natural or artificial substance whether in solid or liquid form or in the form of a gas or vapour, and

• “waste” includes any waste materials, spoil, refuse or other matter deposited on land.]

Textual Amendments

F188 S. 72DA inserted (15.9.2003) by The Insolvency Act 1986 (Amendment) (Administrative Receivership and Urban Regeneration etc.) Order 2003 (S.I. 2003/1832), arts. 1, 2(b); S.I. 2003/2093, art. 2(1), Sch. 1

72E Fourth exception: project finance E+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 market E+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: [F189 social landlords] E+W+S

Section 72A does not prevent the appointment of an administrative receiver of a company which is [F190 —

(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 [F191 Part 2 of the Housing (Scotland) Act 2010 (asp 17)].

Textual Amendments

F189 Words in s. 72G heading substituted (1.4.2010) by The Housing and Regeneration Act 2008 (Consequential Provisions) Order 2010 (S.I. 2010/866), art. 5, Sch. 2 para. 61(3) (with Sch. 3)

F190 Words in s. 72G inserted (1.4.2010) by The Housing and Regeneration Act 2008 (Consequential Provisions) Order 2010 (S.I. 2010/866), art. 5, Sch. 2 para. 61(2) (with Sch. 3)

F191 Words in s. 72G(b) substituted (1.4.2012) by The Housing (Scotland) Act 2010 (Consequential Provisions and Modifications) Order 2012 (S.I. 2012/700), art. 1(3), Sch. para. 3

[F192 72GA Exception 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.]

Textual Amendments

F192 S. 72GA inserted (15.9.2003) by The Insolvency Act 1986 (Amendment) (Administrative Receivership and Urban Regeneration etc.) Order 2003 (S.I. 2003/1832), arts. 1, 2(c); S.I. 2003/2093, art. 2(1), Sch. 1

F193 72H Sections 72A to 72G: supplementary E+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

F193 Pt. 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 IV U.K. Winding Up of Companies Registered under the Companies Acts

Modifications etc. (not altering text)

C249 Pt. 4 (ss. 73-219) modified by Company Directors Disqualification Act 1986 (c. 46, SIF 27), ss. 21(2), 25

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

Pt. 4 modified by Criminal Justice Act 1988 (c. 33, SIF 39:1), ss. 86(5), 123, Sch. 8 para. 16

Pt. 4 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 (as amended (13.3.2018) by S.I. 2018/208, regs. 1(3), 3)

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

Pt. 4 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))

C250 Pt. 4 (ss. 73-219) extended (with modifications) by Building Societies Act 1986 (1986 c. 53), ss. 54(3)(a)(5)(a), 90, 126(3), Sch. 15 (as amended (13.3.2018) by S.I. 2018/208, regs. 1(3), 2(2))

C251 Pts. 1-7 (ss. 1-251) applied (with modifications) by S.I. 1989/1276, arts. 2, 3

Pt. 4 (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. 4 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. 4 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)

C252 Pt. 4 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 and (1.1.2015) by S.I. 2014/3486, arts. 1(2), 14 (with art. 3))

C253 Pt. 4: power to apply or incorporate conferred (6.4.2001) by 2000 c. 12, s. 14(1); S.I. 2000/3316, art. 2

Pt. 4: 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

C254 First 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. (as amended (1.4.2013) by S.I. 2013/472, art. 1(1), Sch. 2 para. 117; and (13.3.2018) by S.I. 2018/208, regs. 1(3), 11

C255 Pt. 4 amended (1.12.2001) by 2000 c. 8, s. 371(2)(b); S.I. 2001/3538, art. 2(1)

C256 Pt. 4 (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)

C257 Pts. 1-4 applied (with modifications) in part (E.W.) (2.1.2013) by The Charitable Incorporated Organisations (Insolvency and Dissolution) Regulations 2012 (S.I. 2012/3013), reg. 1, Sch. para. 1 (as amended (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 3 para. 49(3) (with ss. 2(2), 5(2)); (7.7.2020) by S.I. 2020/710, regs. 1, 4 (with reg. 6) (which affecting legislation is revoked and this amendment reversed (13.8.2020) by S.I. 2020/856, regs. 1(2), 2); and (13.8.2020 immediately after the coming into force of S.I. 2020/856, reg. 2) by S.I. 2020/856, regs. 1(3), 5 (with reg. 7))

C258 Pt. 4 applied (with modifications) (S.) by S.S.I. 2001/128, reg. 4, Schs. 2, 3) (as modified) (temp.) (retrospective to 27.4.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), Sch. 10 paras. 8(1)(2), 14 (with ss. 2(2), 5(2))

C259 Pt. 4 modified (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), ss. 12, 49(1) (with ss. 2(2), 5(2))

Chapter I E+W+S Preliminary

Modifications etc. (not altering text)

C260 Pt. 4 Ch. 1 excluded (E.W.) (31.1.2019) by The Further Education Bodies (Insolvency) Regulations 2019 (S.I. 2019/138), regs. 1(1), 9 (with regs. 1(2), 3(a)(ii))

[F194 Introductory] E+W+S

Textual Amendments

F194 S. 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)

[F195 73 Scheme of this Part E+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

F195 S. 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)

Contributories E+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 F196 . . . ;

(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 [F197 the 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

F196 Words 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)

F197 Words 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)

Modifications etc. (not altering text)

C261 S. 74 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37, Sch. 1 para. 3 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

C262 S. 74(2)(a) modified (temp.) (retrospective to 27.4.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), Sch. 10 paras. 8(1)(2), 10 (with ss. 2(2), 5(2))

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

F198 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F198 S. 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 [F199 Chapter 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 [F200 statement] made in accordance with [F201 section 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 [F200 statement],

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) [F202 Section 74 does not apply] in relation to liability accruing by virtue of this section.

(6) F203 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F199 Words 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)

F200 Words in s. 76(2)(b) substituted (12.5.2011) by The Companies Act 2006 (Consequential Amendments and Transitional Provisions) Order 2011 (S.I. 2011/1265), arts. 1(2), 6(3)

F201 Words 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)

F202 Words 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)

F203 S. 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)

Modifications etc. (not altering text)

C263 Ss. 76-79 applied (with modifications) (E.W.S.) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37, Sch. 1 para. 3 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

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 [F204 re-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 F205 . . .

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

F204 Words 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)

F205 Words 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)

Modifications etc. (not altering text)

C263 Ss. 76-79 applied (with modifications) (E.W.S.) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37, Sch. 1 para. 3 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

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 F206 . . . .

(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

F206 Words 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)

Modifications etc. (not altering text)

C263 Ss. 76-79 applied (with modifications) (E.W.S.) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37, Sch. 1 para. 3 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

79 Meaning of “contributory”. E+W+S

(1) In this Act F207 . . . 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.

F208 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F207 Words 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)

F208 Words 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)

Modifications etc. (not altering text)

C263 Ss. 76-79 applied (with modifications) (E.W.S.) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37, Sch. 1 para. 3 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

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 [F209 an 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

F209 Words in s. 80 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)

Modifications etc. (not altering text)

C264 Ss. 80-82 applied (with modifications) (E.W.S.) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

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.

Modifications etc. (not altering text)

C264 Ss. 80-82 applied (with modifications) (E.W.S.) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

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.

Modifications etc. (not altering text)

C264 Ss. 80-82 applied (with modifications) (E.W.S.) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

83 [F210 Companies 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 [F211 is 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

F210 S. 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)

F211 Words 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)

Modifications etc. (not altering text)

C265 S. 83 applied (with modifications) (E.W.S.) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37, Sch. 1 para. 3 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

Chapter II E+W+S Voluntary Winding Up (Introductory and General)

Resolutions for, and commencement of, voluntary winding up E+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) F212 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) In this Act the expression “a resolution for voluntary winding up” means a resolution passed under [F213 either of the paragraphs] of subsection (1).

[F214 (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.]

[F215 (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).]

[F216 (4) This section has effect subject to section 43 of the Commonhold and Leasehold Reform Act 2002.]

Textual Amendments

F212 S. 84(1)(c) repealed (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)(3), Sch. 4 para. 39(2), Sch. 5 (with art. 12)

F213 Words 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)

F214 S. 84(2A)(2B) inserted (15.9.2003) by The Enterprise Act 2002 (Insolvency) Order 2003 (S.I. 2003/2096), art. 4, Sch. Pt. 1 para. 10 (with art. 6)

F215 S. 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)

F216 S. 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)

C266 S. 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))

C267 S. 84 modified (E.W.) (31.1.2019) by The Further Education Bodies (Insolvency) Regulations 2019 (S.I. 2019/138), regs. 1(1), 5 (with regs. 1(2), 3(a)(i))

C268 S. 84(3) amended (1.7.1999) by 1998 c. 46, Sch. 8 para. 23(2)-(3) (as amended (28.6.2016) by The Building Societies (Floating Charges and Other Provisions) Order 2016 (S.I. 2016/679), arts. 1(1), 6)

C269 S. 84(3) applied in part (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

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.

Modifications etc. (not altering text)

C270 S. 85 modified (E.W.) (31.1.2019) by The Further Education Bodies (Insolvency) Regulations 2019 (S.I. 2019/138), regs. 1(1), 10 (with regs. 1(2), 3(a)(ii))

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 up E+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.

Modifications etc. (not altering text)

C271 S. 88 excluded (26.12.2003) by The Financial Collateral Arrangements (No.2) Regulations 2003 (S.I. 2003/3226), reg. 10(2)

C272 S. 88 excluded by The Financial Market and Insolvency (Settlement Finality) Regulations 1999 (S.I. 1999/2979), reg. 16(3) (as amended (2.2.2006) by The Financial Markets and Insolvency (Settlement Finality) (Amendment) Regulations 2006 (S.I. 2006/50), reg. 2(8)(10) and as amended (1.10.2009) by The Financial Markets and Insolvency (Settlement Finality) (Amendment) Regulations 2009 (S.I. 2009/1972), reg. 6(a))

C273 S. 88 excluded (E.W.) (31.1.2019) by The Further Education Bodies (Insolvency) Regulations 2019 (S.I. 2019/138), regs. 1(1), 11 (with regs. 1(2), 3(a)(ii))

Declaration of solvency E+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) [F217 A copy of 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 [F218 a copy of] 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.

Textual Amendments

F217 Words in s. 89(3) substituted (26.10.2023 for specified purposes, 4.3.2024 in so far as not already in force) by Economic Crime and Corporate Transparency Act 2023 (c. 56), ss. 77(1)(a), 219(1)(2)(b); S.I. 2024/269, reg. 2(z19)

F218 Words in s. 89(6) inserted (26.10.2023 for specified purposes, 4.3.2024 in so far as not already in force) by Economic Crime and Corporate Transparency Act 2023 (c. 56), ss. 77(1)(b), 219(1)(2)(b); S.I. 2024/269, reg. 2(z19)

Modifications etc. (not altering text)

C274 S. 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 (as amended (28.6.2016) by The Building Societies (Floating Charges and Other Provisions) Order 2016 (S.I. 2016/679), arts. 1(1), 6)

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 III E+W+S Members’ Voluntary Winding Up

Modifications etc. (not altering text)

C275 Pt. 4 Ch. 3 applied (8.12.2017) by The Risk Transformation Regulations 2017 (S.I. 2017/1212), regs. 1(2), 169(2) (with reg. 189)

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)

C276 S. 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

C277 Ss. 91-93 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

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)

C277 Ss. 91-93 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C278 Ss. 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

[F219 92A Progress report to company F220 ... E+W+S

(1) Subject to [F221 section 96], F222 ... 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

F219 S. 92A added (6.4.2010) by The Legislative Reform (Insolvency) (Miscellaneous Provisions) Order 2010 (S.I. 2010/18), art. 6(1) (with art. 12(1))

F220 Words in s. 92A title repealed (S.) (1.4.2016 for specified purposes, 6.4.2019 in so far as not already in force) by The Public Services Reform (Insolvency) (Scotland) Order 2016 (S.S.I. 2016/141), arts. 1(2)-(4), 5(1)(b) (with arts. 14, 15) (see S.I. 2019/816, reg. 4(a))

F221 Words in s. 92A(1) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 16; S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F222 Words in s. 92A(1) repealed (S.) (1.4.2016 for specified purposes, 6.4.2019 in so far as not already in force) by The Public Services Reform (Insolvency) (Scotland) Order 2016 (S.S.I. 2016/141), arts. 1(2)-(4), 5(1)(a) (with arts. 14, 15) (see S.I. 2019/816, reg. 4(a))

Modifications etc. (not altering text)

C277 Ss. 91-93 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

F224 93 General company meeting at each year’s end [F223 (Scotland)] E+W+S

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

Textual Amendments

F223 Word in s. 93 heading inserted (6.4.2010) by The Legislative Reform (Insolvency) (Miscellaneous Provisions) Order 2010 (S.I. 2010/18), art. 6(2)(a) (with art. 12(2))

F224 S. 93 repealed (S.) (1.4.2016 for specified purposes, 6.4.2019 in so far as not already in force) by The Public Services Reform (Insolvency) (Scotland) Order 2016 (S.S.I. 2016/141), arts. 1(2)-(4), 5(2) (with arts. 14, 15) (with savings by S.S.I. 2016/141, art. 16 (as inserted (S.) (1.8.2017) by The Public Services Reform (Corporate Insolvency and Bankruptcy) (Scotland) Order 2017 (S.S.I. 2017/209), arts. 1(2), 8(3)) (see S.I. 2019/816, reg. 4(a))

[F225 94 Final account prior to dissolution E+W+S

(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

F225 S. 94 substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 18; S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

Modifications etc. (not altering text)

C279 S. 94 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

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.

[F226 (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.]

F227 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F227 (2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F227 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) The statement as to the affairs of the company F228 . . . 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.

[F229 (4A) The statement as to the affairs of the company shall be F230 ...—

(a) in the case of a winding up of a company registered in England and Wales [F231 be verified by the liquidator], by a statement of truth; and

(b) in the case of a winding up of a company registered in Scotland, [F232 contain a statutory declaration by the liquidator].]

[F233 (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.]

F234 (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F234 (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F234 (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8) If the liquidator without reasonable excuse fails to comply with [F235 subsections (1) to (4A)], he is liable to a fine.

Textual Amendments

F226 S. 95(1A) inserted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 19(2); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F227 S. 95(2)-(3) omitted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) 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); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F228 Words in s. 95(4) omitted (6.4.2010) by virtue of The Legislative Reform (Insolvency) (Miscellaneous Provisions) Order 2010 (S.I. 2010/18), art. 5(2)(a)

F229 S. 95(4A) inserted (6.4.2010) by The Legislative Reform (Insolvency) (Miscellaneous Provisions) Order 2010 (S.I. 2010/18), art. 5(2)(b)

F230 Words in s. 95(4A) repealed (S.) (1.4.2016 for specified purposes, 6.4.2019 in so far as not already in force) by The Public Services Reform (Insolvency) (Scotland) Order 2016 (S.S.I. 2016/141), arts. 1(2)-(4), 8(a) (with arts. 14, 15) (see S.I. 2019/816, reg. 4(a))

F231 Words in s. 95(4A)(a) inserted (S.) (1.4.2016 for specified purposes, 6.4.2019 in so far as not already in force) by The Public Services Reform (Insolvency) (Scotland) Order 2016 (S.S.I. 2016/141), arts. 1(2)-(4), 8(b) (with arts. 14, 15) (see S.I. 2019/816, reg. 4(a))

F232 Words in s. 95(4A)(b) substituted (S.) (1.4.2016 for specified purposes, 6.4.2019 in so far as not already in force) by The Public Services Reform (Insolvency) (Scotland) Order 2016 (S.S.I. 2016/141), arts. 1(2)-(4), 8(c) (with arts. 14, 15) (see S.I. 2019/816, reg. 4(a))

F233 S. 95(4B)(4C) inserted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 19(4); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F234 S. 95(5)-(7) omitted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) 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); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F235 Words in s. 95(8) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) 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); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

Modifications etc. (not altering text)

C280 S. 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

C281 S. 95 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

[F236 96 Conversion to creditors’ voluntary winding up. E+W+S

(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.

[F237 (4A) The court shall grant an application under subsection (4) made by the holder of a qualifying floating charge in respect of the company's property (within the meaning of paragraph 14 of Schedule B1) unless the court thinks it right to refuse the application because of the particular circumstances of the case.]

(5) The “existing liquidator” is the person who is liquidator immediately before the winding up becomes a creditors' voluntary winding up.]

Textual Amendments

F236 S. 96 substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 20(1); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F237 S. 96(4A) inserted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 20(2); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

Chapter IV E+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 [F238 99 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

F238 Words in s. 97(2) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 21; S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

Modifications etc. (not altering text)

C282 S. 97 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C283 S. 97 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

F239 98 Meeting of creditors. E+W+S

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

Textual Amendments

F239 S. 98 omitted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 22; S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

99 Directors to lay statement of affairs before creditors. E+W+S

[F240 (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 F241 . . . 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.

[F242 (2A) The statement as to the affairs of the company shall [F243 be verified by some or all of the directors]—

(a) in the case of a winding up of a company registered in England and Wales, [F244 be 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, [F245 by affidavit] [F245 contain a statutory declaration by some or all of the directors].]

[F246 (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

F240 S. 99(1) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 23(2); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F241 Words in s. 99(2) omitted (6.4.2010) by virtue of The Legislative Reform (Insolvency) (Miscellaneous Provisions) Order 2010 (S.I. 2010/18), art. 5(3)(a)

F242 S. 99(2A) inserted (6.4.2010) by The Legislative Reform (Insolvency) (Miscellaneous Provisions) Order 2010 (S.I. 2010/18), art. 5(3)(b)

F243 Words in s. 99(2A) repealed (S.) (1.4.2016 for specified purposes, 6.4.2019 in so far as not already in force) by The Public Services Reform (Insolvency) (Scotland) Order 2016 (S.S.I. 2016/141), arts. 1(3)(4), 9(a) (with arts. 14, 15) (see S.I. 2019/816, reg. 4(a))

F244 Words in s. 99(2A)(a) inserted (S.) (1.4.2016 for specified purposes, 6.4.2019 in so far as not already in force) by The Public Services Reform (Insolvency) (Scotland) Order 2016 (S.S.I. 2016/141), arts. 1(3)(4), 9(b) (with arts. 14, 15) (see S.I. 2019/816, reg. 4(a))

F245 Words in s. 99(2A)(b) substituted (S.) (1.4.2016 for specified purposes, 6.4.2019 in so far as not already in force) by The Public Services Reform (Insolvency) (Scotland) Order 2016 (S.S.I. 2016/141), arts. 1(3)(4), 9(c) (with arts. 14, 15) (see S.I. 2019/816, reg. 4(a))

F246 S. 99(3) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 23(3); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

Modifications etc. (not altering text)

C284 S. 99 modified (E.W.) (31.1.2019) by The Further Education Bodies (Insolvency) Regulations 2019 (S.I. 2019/138), regs. 1(1), 12 (with regs. 1(2), 3(a)(ii))

100 Appointment of liquidator. E+W+S

[F247 (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

F247 S. 100(1)-(1B) substituted for s. 100(1) (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 24; S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

Modifications etc. (not altering text)

C285 S. 100 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C286 S. 100 modified (E.W.) (31.1.2019) by The Further Education Bodies (Insolvency) Regulations 2019 (S.I. 2019/138), regs. 1(1), 5 (with regs. 1(2), 3(a)(i))

C287 Ss. 100-102 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C288 S. 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

[F248 (1) The 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, [F249 decide] 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 [F249 decide]—

(a) [F250 those 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 [F250 those persons].

(4) [F251 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

F248 S. 101(1) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 25(2); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F249 Word in s. 101(3) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 25(3)(a); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F250 Words in s. 101(3) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) 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); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F251 S. 101(4) repealed (S.) (1.10.2017 for specified purposes) by The Public Services Reform (Corporate Insolvency and Bankruptcy) (Scotland) Order 2017 (S.S.I. 2017/209), arts. 1(3), 3

Modifications etc. (not altering text)

C287 Ss. 100-102 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C289 S. 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

C290 S. 101(2) modified (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(2), Sch. 3

F252 102 Creditors’ meeting where winding up converted under s. 96. E+W+S

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

Textual Amendments

F252 S. 102 omitted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 26; S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

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)

C291 S. 104 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C292 S. 104 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

[F253 104A Progress report to company and creditors F254 ... F255 ... E+W+S

(1) [F256 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 [F257 , 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

F253 S. 104A added (6.4.2010) by The Legislative Reform (Insolvency) (Miscellaneous Provisions) Order 2010 (S.I. 2010/18), art. 6(3) (with art. 12(1))

F254 Word 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)

F255 Words in s. 104A heading repealed (S.) (1.4.2016 for specified purposes, 6.4.2019 in so far as not already in force) by The Public Services Reform (Insolvency) (Scotland) Order 2016 (S.S.I. 2016/141), arts. 1(3)(4), 6(1)(b) (with arts. 14, 15) (see S.I. 2019/816, reg. 4(a))

F256 Word in s. 104A(1) substituted (S.) (1.4.2016 for specified purposes, 6.4.2019 in so far as not already in force) by The Public Services Reform (Insolvency) (Scotland) Order 2016 (S.S.I. 2016/141), arts. 1(3)(4), 6(1)(a) (with arts. 14, 15) (see S.I. 2019/816, reg. 4(a))

F257 Words in s. 104A(1)(b)(i) inserted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 27; S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

Modifications etc. (not altering text)

C293 S. 104A modified (E.W.) (31.1.2019) by The Further Education Bodies (Insolvency) Regulations 2019 (S.I. 2019/138), regs. 1(1), 13 (with regs. 1(2), 3(a)(ii))

F259 105 Meetings of company and creditors at each year’s end [F258 (Scotland)]. E+W+S

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

Textual Amendments

F258 Word in s. 105 heading inserted (6.4.2010) by The Legislative Reform (Insolvency) (Miscellaneous Provisions) Order 2010 (S.I. 2010/18), art. 6(4)(a) (with art. 12(2))

F259 S. 105 repealed (S.) (1.4.2016 for specified purposes, 6.4.2019 in so far as not already in force) by The Public Services Reform (Insolvency) (Scotland) Order 2016 (S.S.I. 2016/141), arts. 1(3)(4), 6(2) (with arts. 14, 15) (with savings by by S.S.I. 2016/141, art. 16 (as inserted (S.) (1.8.2017) by The Public Services Reform (Corporate Insolvency and Bankruptcy) (Scotland) Order 2017 (S.S.I. 2017/209), arts. 1(2), 8(3)) (see S.I. 2019/816, reg. 4(a))

[F260 106 Final account prior to dissolution. E+W+S

(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.

F261 (4A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F261 (4B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(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

F260 S. 106 substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 29; S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F261 S. 106(4A)(4B) omitted (31.12.2020) by virtue of The Insolvency (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/146), reg. 1(3), Sch. para. 18 (with regs. 4, 5) (as amended by S.I. 2019/1459, reg. 1(2), Sch. para. 2); 2020 c. 1, Sch. 5 para. 1(1)

Modifications etc. (not altering text)

C294 Ss. 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)

C295 S. 106 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C296 S. 106 modified (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(2), Sch. 3 (as amended (S.) (8.12.2017) by The Insolvency (Miscellaneous Amendments) Regulations 2017 (S.I. 2017/1119), reg. 1(1), Sch. 1 para. 57(2))

C297 S. 106 modified (E.W.) (31.1.2019) by The Further Education Bodies (Insolvency) Regulations 2019 (S.I. 2019/138), regs. 1(1), 14 (with regs. 1(2), 3(a)(ii))

C298 S. 106 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C299 S. 106(3)(5) amended (1.7.1999) by Scotland Act 1998 (c. 46), s. 125, Sch. 8 para. 23(2)(3) (with s. 126(3)-(11)); S.I. 1998/3178, arts. 2, 3 (as amended (28.6.2016) by S.I. 2016/679, arts. 1(1), 6)

Chapter V E+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)

C300 S. 107 restricted (6.3.2008) by The Regulated Covered Bonds Regulations 2008 (S.I. 2008/346), reg. 46, Sch. para. 2(2)

C301 S. 107 modified (E.W.) (31.1.2019) by The Further Education Bodies (Insolvency) Regulations 2019 (S.I. 2019/138), regs. 1(1), 15 (with regs. 1(2), 3(a)(ii))

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)

C302 S. 109 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C303 Ss. 109-111 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C304 S. 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 (as amended (28.6.2016) by The Building Societies (Floating Charges and Other Provisions) Order 2016 (S.I. 2016/679), arts. 1(1), 6)

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

[F262 (a)] to another company (“the transferee company"), whether or not the latter is a [F263 company registered under the Companies Act 2006][F262 , 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 [F264 sale—

(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 [F265 company 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

E1 This version of this provision extends to England and Wales only; a separate version has been created for Scotland only

Textual Amendments

F262 Words in s. 110(1) inserted (6.4.2001) by S.I. 2001/1090, reg. 9, Sch. 5 para. 15(2)

F263 Words 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)

F264 Word in s. 110(2) substituted (6.4.2001) by S.I. 2001/1090, reg. 9, Sch. 5 para. 15(3)

F265 Words in s. 110(4) substituted (6.4.2001) by S.I. 2001/1090, reg. 9, Sch. 5 para. 15(4)

Modifications etc. (not altering text)

C303 Ss. 109-111 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

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

[F1626 (a)] to another company (“the transferee company”), whether or not the latter is a [F1627 company registered under the Companies Act 2006][F1626 , 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 [F1628 sale–

(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 [F1629 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 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

E2 This version of this provision extends to Scotland only; a separate version has been created for England and Wales only

Textual Amendments

F1626 Words in s. 110(1) inserted (6.4.2001) by S.S.I. 2001/128, reg. 5, Sch. 4 para. 1(2)

F1627 Words 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)

F1628 Words in s. 110(2) substituted (6.4.2001) by S.S.I. 2001/128, reg. 5, Sch. 4 para. 1(3)

F1629 Words 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)

C303 Ss. 109-111 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C1557 S. 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 M4 Companies Clauses Consolidation Act 1845 or, in the case of a winding up in Scotland, the M5 Companies 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)

C303 Ss. 109-111 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C305 S. 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

M4 1845 c. 16.

M5 1845 c. 17.

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)

C306 S. 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

C307 S. 112 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C308 S. 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 (as amended (28.6.2016) by The Building Societies (Floating Charges and Other Provisions) Order 2016 (S.I. 2016/679), arts. 1(1), 6)

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)

C309 S. 113 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C310 Ss. 113-115 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

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 F266 ... 99 (statement of affairs) [F267 and 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

F266 Words in s. 114(2) omitted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 30(a); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F267 Words in s. 114(2) inserted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 30(b); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

Modifications etc. (not altering text)

C310 Ss. 113-115 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C311 S. 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

[F268 After the payment of any liabilities to which section 174A applies,] 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.

Textual Amendments

F268 Words in s. 115 inserted (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 3 para. 9 (with ss. 2(2), 5(2))

Modifications etc. (not altering text)

C310 Ss. 113-115 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C312 S. 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 VI E+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 [F269 in 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 F270 ... has concurrent jurisdiction with the High Court to wind up the company.

[F271 (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.

F272 (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.

F273 (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F274 (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F275 (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

F269 Words 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)

F270 Words 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)

F271 S. 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)

F272 S. 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)

F273 S. 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)

F274 S. 117(7) omitted (31.12.2020) by virtue of The Insolvency (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/146), reg. 1(3), Sch. para. 19 (with regs. 4, 5); 2020 c. 1, Sch. 5 para. 1(1)

F275 S. 117(8) inserted (3.4.2006) by Constitutional Reform Act 2005 (c. 4), ss. 15(1), 148, Sch. 4 para. 186(3); S.I. 2006/1014, art. 2(a), Sch. 1

Modifications etc. (not altering text)

C313 S. 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)

C314 S. 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 [F276 in 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.

F277 (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F276 Words repealed (S.) by Court of Session Act 1988 (c. 36, SIF 36:1), s. 52(2), Sch. 2

F277 S. 120(6) omitted (31.12.2020) by virtue of The Insolvency (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/146), reg. 1(3), Sch. para. 20 (with regs. 4, 5); 2020 c. 1, Sch. 5 para. 1(1)

Modifications etc. (not altering text)

C315 S. 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)

C316 S. 121 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

Grounds and effect of winding-up petition E+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 [F278 a 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 [F279 Schedule 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;

F280 (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(f) the company is unable to pay its debts,

F281 (fa) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(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

F278 Words in s. 122(1)(b) substituted (6.4.2008) by The Companies Act 2006 (Consequential Amendments etc) Order 2008 (S.I. 2008/948), art. 3(1), Sch. 1 para. 102 (with arts. 6, 11, 12)

F279 Words 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)

F280 S. 122(1)(e) omitted (12.5.2011) by virtue of The Companies Act 2006 (Consequential Amendments and Transitional Provisions) Order 2011 (S.I. 2011/1265), arts. 1(2), 6(4)

F281 S. 122(1)(fa) omitted (26.6.2020) by virtue of Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 3 para. 10 (with ss. 2(2), 5(2))

Modifications etc. (not altering text)

C317 S. 122 applied (with modifications) by S.I. 1994/2421, art. 8, Sch. 4 Pt. II para. 6(a)

C318 S. 122 modified by 1986 c. 53, Sch. 15 para. 16(2) (as substituted (28.6.2016) by The Building Societies (Floating Charges and Other Provisions) Order 2016 (S.I. 2016/679), art. 1(1)(4), 2)

C319 S. 122 excluded by 1986 c. 53, Sch. 15 para. 16(1) (as substituted (28.6.2016) by The Building Societies (Floating Charges and Other Provisions) Order 2016 (S.I. 2016/679), art. 1(1)(4), 2)

C320 S. 122(1) modified (10.8.2005) by The Insurers (Reorganisation and Winding Up) (Lloyd's) Regulations 2005 (S.I. 2005/1998), regs. 2(3), 25(3)

C321 S. 122(1)(b) excluded (27.7.1999) by 1999 c. 20, ss. 2(5), 5(1), Sch. 2 Pt. II para. 9(b) (with s. 15)

S. 122(1)(b) excluded (8.10.2004) by The European Public Limited-Liability Company Regulations 2004 (S.I. 2004/2326), regs. 85, 88, Sch. 4 para. 9(b) (with Sch. 4 para. 11)

C322 S. 122(1)(f) modified by S.I. 1989/1058, reg. 18(2)

S. 122(1)(f) extended (1.4.1992) by S.I. 1992/613, reg. 49(2)

S. 122(1)(f): power to modify conferred (E.W.) (6.3.1992) by 1992 c. 14, s. 14(3), Sch. 4 para. 10(1) (with s. 118(1)(2))

C323 S. 122(1)(f) modified (6.4.2010) by The Community Infrastructure Levy Regulations 2010 (S.I. 2010/948), reg. 105(2)

C324 S. 122(1)(f) restricted (retrospective to 27.4.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), Sch. 10 para. 5(1)-(3)(4) (with ss. 2(2), 5(2))

C325 S. 122(2) applied (with modifications) (1.8.2014) by Co-operative and Community Benefit Societies Act 2014 (c. 14), s. 62(1)-(4), 154 (with s. 62(7), Sch. 5)

123 Definition of inability to pay debts. E+W+S

(1) A company is deemed unable to pay its debts—

(a) if a creditor (by assignment or otherwise) to whom the company is indebted in a sum exceeding £750 then due has served on the company, by leaving it at the company’s registered office, a written demand (in the prescribed form) requiring the company to pay the sum so due and the company has for 3 weeks thereafter neglected to pay the sum or to secure or compound for it to the reasonable satisfaction of the creditor, or

(b) if, in England and Wales, execution or other process issued on a judgment, decree or order of any court in favour of a creditor of the company is returned unsatisfied in whole or in part, or

(c) if, in Scotland, the induciae of a charge for payment on an extract decree, or an extract registered bond, or an extract registered protest, have expired without payment being made, or

(d) if, in Northern Ireland, a certificate of unenforceability has been granted in respect of a judgment against the company, or

(e) if it is proved to the satisfaction of the court that the company is unable to pay its debts as they fall due.

(2) A company is also deemed unable to pay its debts if it is proved to the satisfaction of the court that the value of the company’s assets is less than the amount of its liabilities, taking into account its contingent and prospective liabilities.

(3) The money sum for the time being specified in subsection (1)(a) is subject to increase or reduction by order under section 416 in Part XV.

Modifications etc. (not altering text)

C326 S. 123 applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 8, Sch. 4 Pt. II para. 7(a)

S. 123 applied (1.10.1996) by 1996 c. 52, s. 7, Sch. 1 Pt. II para. 14(2); S.I. 1996/2402, art. 3 (subject to transitional provisions and savings in Sch.)

C327 S. 123 applied (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 166(3), 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 3

124 Application for winding up. E+W+S

(1) Subject to the provisions of this section, an application to the court for the winding up of a company shall be by petition presented either by the company, or the directors, or by any creditor or creditors (including any contingent or prospective creditor or creditors), contributory or contributories, F282 ... [F283 or by [F284 the designated officer for a magistrates' court] in the exercise of the power conferred by section 87A of the Magistrates’ Courts Act 1980 (enforcement of fines imposed on companies)], or by all or any of those parties, together or separately.

(2) Except as mentioned below, a contributory is not entitled to present a winding-up petition unless either—

(a) the number of members is reduced below 2, or

(b) the shares in respect of which he is a contributory, or some of them, either were originally allotted to him, or have been held by him, and registered in his name, for at least 6 months during the 18 months before the commencement of the winding up, or have devolved on him through the death of a former holder.

(3) A person who is liable under section 76 to contribute to a company’s assets in the event of its being wound up may petition on either of the grounds set out in section 122(1)(f) and (g), and subsection (2) above does not then apply; but unless the person is a contributory otherwise than under section 76, he may not in his character as contributory petition on any other ground.

F285 . . .

F286 (3A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) A winding-up petition may be presented by the Secretary of State—

(a) if the ground of the petition is that in section 122(1)(b) or (c), or

[F287 (b) in a case falling within section 124A [F288 or 124B] below.]

[F289 (4AA) A winding up petition may be presented by the [F290 Financial Conduct Authority] in a case falling within section 124C(1) or (2).]

[F291 (4A) A winding-up petition may be presented by the Regulator of Community Interest Companies in a case falling within section 50 of the Companies (Audit, Investigations and Community Enterprise) Act 2004.]

(5) Where a company is being wound up voluntarily in England and Wales, a winding-up petition may be presented by the official receiver attached to the court as well as by any other person authorised in that behalf under the other provisions of this section; but the court shall not make a winding-up order on the petition unless it is satisfied that the voluntary winding up cannot be continued with due regard to the interests of the creditors or contributories.

Textual Amendments

F282 Words in s. 124(1) omitted (31.12.2020) by virtue of The Insolvency (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/146), reg. 1(3), Sch. para. 21 (with regs. 4, 5); 2020 c. 1, Sch. 5 para. 1(1)

F283 Words inserted (E.W.) by Criminal Justice Act 1988 (c. 33, SIF 39:1), ss. 62(2)(b), 123, Sch. 8 para. 16

F284 Words in s. 124(1) substituted (1.4.2005) by Courts Act 2003 (c. 39), ss. 109(1), 110, Sch. 8 para. 294; S.I. 2005/910, art. 3(y)

F285 Words in s. 122(1)(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(12)} (with art. 10, Sch. 1 para. 84)

F286 S. 124(3A) omitted (26.6.2020) by virtue of Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 3 para. 11 (with ss. 2(2), 5(2))

F287 S. 124(4)(b) substituted by Companies Act 1989 (c. 40, SIF 27), ss. 60(2), 213(2)

F288 Words in s. 124(4)(b) inserted (8.10.2004) by The European Public Limited-Liability Company Regulations 2004 (S.I. 2004/2326), reg. 73(4)(a)

F289 S. 124(4AA) inserted (18.8.2006) by The European Cooperative Society Regulations 2006 (S.I. 2006/2078), reg. 33(2)

F290 Words in s. 124(4AA) substituted (1.4.2013) by The Financial Services Act 2012 (Mutual Societies) Order 2013 (S.I. 2013/496), art. 1(1), Sch. 11 para. 2(1), (2)(a) (with Sch. 12)

F291 S. 124(4A) inserted (1.7.2005) by Companies (Audit, Investigations and Community Enterprise) Act 2004 (c. 27), ss. 50(3), 65; S.I. 2004/3322, art. 2(3), Sch. 3

Modifications etc. (not altering text)

C328 S. 124 excluded (S.) (27.7.1992) by Law Reform (Miscellaneous Provisions) (Scotland) Act 1990 (c. 40, SIF 19), ss. 14(3), 15(9); S.I. 1992/1599, art. 5

C329 S. 124 extended (E.W.) by Magistrates' Courts Act 1980 (c. 43, SIF 82), s. 87A (as inserted (E.W.) by Criminal Justice Act 1988 (c. 33, SIF 39:1), ss. 62(1), 123, Sch. 8 para. 16)

C330 S. 124 applied (with modifications) (1.12.1994) by S.I. 1994/2421, arts. 8(3)(9), 10(1)(a), Sch. 4 Pt. II para. 8, Sch. 6 para. 2 (as amended (E.W.) (8.12.2017) by The Insolvency (Miscellaneous Amendments) Regulations 2017 (S.I. 2017/1119), reg. 1(1), Sch. 2 para. 6)

C331 S. 124 restricted (retrospective to 27.4.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), Sch. 10 para. 2(1)-(4)(5) (with ss. 2(2), 5(2))

C332 S. 124 restricted (retrospective to 27.4.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), Sch. 10 para. 3(1)-(4)(5) (with ss. 2(2), 5(2))

C333 S. 124 restricted (retrospective to 27.4.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), Sch. 10 para. 1(1)-(3)(4) (with ss. 2(2), 5(2))

C334 S. 124 restricted (temp.) (29.9.2021) by 2020 c. 12, Sch. 10 paras. 1, 4 (as substituted by The Corporate Insolvency and Governance Act 2020 (Coronavirus) (Amendment of Schedule 10) Regulations 2021 (S.I. 2021/1029), regs. 1, 2)

C335 S. 124 restricted (temp.) (1.10.2021) by 2020 c. 12, Sch. 10 paras. 1, 4 (as substituted by The Corporate Insolvency and Governance Act 2020 (Coronavirus) (Amendment of Schedule 10) (No. 2) Regulations 2021 (S.I. 2021/1091), regs. 1(3), 3)

C336 S. 124 restricted (E.W.) (1.4.2022) by Commercial Rent (Coronavirus) Act 2022 (c. 12), s. 31(5), Sch. 3 para. 1(2) (with s. 30)

C337 S. 124(4)(b) applied by 2007 c. 27, s. 27A(3) (as inserted (1.3.2016) by Serious Crime Act 2015 (c. 9), s. 88(1), Sch. 1 para. 20; S.I. 2016/148, reg. 3(f))

[F292 124A Petition for winding up on grounds of public interest. E+W+S

(1) Where it appears to the Secretary of State from—

(a) any report made or information obtained under Part XIV [F293 (except section 448A)] of the M6 Companies Act 1985 (company investigations, &c.),

[F294 (b) any report made by inspectors under—

(i) section 167, 168, 169 or 284 of the Financial Services and Markets Act 2000, or

(ii) where the company is an open-ended investment company (within the meaning of that Act), regulations made as a result of section 262(2)(k) of that Act;

(bb) any information or documents obtained under section 165, 171, 172, 173 or 175 of that Act,]

(c) any information obtained under section 2 of the M7 Criminal Justice Act 1987 or [F295 section 28 of the Criminal Law (Consolidation) (Scotland) Act 1995] (fraud investigations), or

(d) any information obtained under section 83 of the Companies Act 1989 (powers exercisable for purpose of assisting overseas regulatory authorities),

that it is expedient in the public interest that a company should be wound up, he may present a petition for it to be wound up if the court thinks it just and equitable for it to be so.

(2) This section does not apply if the company is already being wound up by the court.]

Textual Amendments

F292 S. 124A inserted by Companies Act 1989 (c. 40, SIF 27), ss. 60(3), 213(2)

F293 Words in s. 124A(1)(a) inserted (by Companies (Audit, Investigations and Community Enterprise) Act 2004 (c. 27), ss. 25(1), 65, Sch. 2 para. 27; S.I. 2004/3322, art. 2(2), Sch. 2 (subject to arts. 3-13)

F294 S. 124A(b)(bb) substituted for s. 124A(b) (1.12.2001) by S.I. 2001/3649, arts. 1, 305

F295 Words in s. 124A(1) substituted (1.4.1996) by virtue of 1995 c. 40, ss. 5, 7(2), Sch. 4 para. 56(2) and 1978 c. 30, s. 17(2)(a)

Modifications etc. (not altering text)

C338 S. 124A applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C339 S. 124A excluded (E.W.) (31.1.2019) by The Further Education Bodies (Insolvency) Regulations 2019 (S.I. 2019/138), regs. 1(1), 16 (with regs. 1(2), 3(a)(ii))

Marginal Citations

M6 1985 c. 6(27).

M7 1987 c.38(39:1).

F296 124B Petition for winding up of SE E+W+S

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

Textual Amendments

F296 S. 124B omitted (31.12.2020) by virtue of The Financial Services (Miscellaneous) (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/710), regs. 1(3), 2; 2020 c. 1, Sch. 5 para. 1(1)

F297 124C Petition for winding up of SCE E+W+S

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

Textual Amendments

F297 S. 124C omitted (31.12.2020) by virtue of The Financial Services (Miscellaneous) (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/710), regs. 1(3), 2; 2020 c. 1, Sch. 5 para. 1(1)

125 Powers of court on hearing of petition. E+W+S

(1) On hearing a winding-up petition the court may dismiss it, or adjourn the hearing conditionally or unconditionally, or make an interim order, or any other order that it thinks fit; but the court shall not refuse to make a winding-up order on the ground only that the company’s assets have been mortgaged to an amount equal to or in excess of those assets, or that the company has no assets.

(2) If the petition is presented by members of the company as contributories on the ground that it is just and equitable that the company should be wound up, the court, if it is of opinion—

(a) that the petitioners are entitled to relief either by winding up the company or by some other means, and

(b) that in the absence of any other remedy it would be just and equitable that the company should be wound up,

shall make a winding-up order; but this does not apply if the court is also of the opinion both that some other remedy is available to the petitioners and that they are acting unreasonably in seeking to have the company wound up instead of pursuing that other remedy.

Modifications etc. (not altering text)

C340 S. 125 applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 8(3)(9), Sch. 4 Pt. II para. 9

S. 125 applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 10(1)(a), Sch. 6 para. 3

C341 S. 125 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C342 S. 125 excluded (31.1.2019) by Technical and Further Education Act 2017 (c. 19), ss. 11, 47(2); S.I. 2018/1161, reg. 3(a)

126 Power to stay or restrain proceedings against company. E+W+S

(1) At any time after the presentation of a winding-up petition, and before a winding-up order has been made, the company, or any creditor or contributory, may—

(a) where any action or proceeding against the company is pending in the High Court or Court of Appeal in England and Wales or Northern Ireland, apply to the court in which the action or proceeding is pending for a stay of proceedings therein, and

(b) where any other action or proceeding is pending against the company, apply to the court having jurisdiction to wind up the company to restrain further proceedings in the action or proceeding;

and the court to which the application is so made may (as the case may be) stay, sist or restrain the proceedings accordingly on such terms as it thinks fit.

(2) In the case of [F298 a company registered but not formed under the Companies Act 2006], where the application to stay, sist or restrain is by a creditor, this section extends to actions and proceedings against any contributory of the company.

[F299 (3) Subsection (1) applies in relation to any action being taken in respect of the company under Part 1 of Schedule 8 to the Finance (No. 2) Act 2015 (enforcement by deduction from accounts) as it applies in relation to any action or proceeding mentioned in paragraph (b) of that subsection.]

Textual Amendments

F298 Words in s. 126(2) 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(14)} (with art. 10, Sch. 1 para. 84)

F299 S. 126(3) inserted (18.11.2015) by Finance (No. 2) Act 2015 (c. 33), Sch. 8 para. 27

Modifications etc. (not altering text)

C343 S. 126 excluded (25.4.1991) by Companies Act 1989 (c. 40), ss. 154, 155, 161(4); S.I. 1991/878, art. 2, Sch..

S. 126 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C344 S. 126 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C345 Ss. 126-128 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C346 S. 126(2) modified (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(2), Sch. 3

127 Avoidance of property dispositions, etc. E+W+S

[F300 (1)] In a winding up by the court, any disposition of the company’s property, and any transfer of shares, or alteration in the status of the company’s members, made after the commencement of the winding up is, unless the court otherwise orders, void.

[F300 (2) This section has no effect in respect of anything done by an administrator of a company while a winding-up petition is suspended under paragraph 40 of Schedule B1.]

[F301 (3) This section has no effect in respect of anything done during a moratorium under Part A1, or during a period mentioned in section 5(4)(a) following the end of a moratorium, where the winding-up order was made on a petition presented before the moratorium begins, unless the petition was presented under section 367 of the Financial Services and Markets Act 2000 on the ground mentioned in section 367(3)(b) of that Act.]

Textual Amendments

F300 S. 127 renumbered as s. 127(1) and s. 127(2) added (15.9.2003) by 2002 c. 40, ss. 248(3), 279, Sch. 17 para. 15 (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))

F301 S. 127(3) inserted (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 3 para. 12 (with ss. 2(2), 5(2))

Modifications etc. (not altering text)

C345 Ss. 126-128 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C347 S. 127 restricted (25.4.1991) by Companies Act 1989 (c. 40), s. 182(4), Sch. 22 para. 7(2); S.I. 1991/878, art. 2, Sch.

C348 S. 127 excluded (25.4.1991) by Companies Act 1989 (c. 40), ss. 154, 155, 164(3), 175(4), 182(4), Sch. 22 para. 11(4); S.I. 1991/878, art. 2, Sch.

S. 127 excluded (15.8.1995) by S.I. 1995/2049, reg. 21(4)-(8)

S. 127 excluded (11.12.1999) by S.I. 1999/2979, reg. 19(3)

S. 127 excluded (26.12.2003) by The Financial Collateral Arrangements (No. 2) Regulations 2003 (S.I. 2003/3226), reg. 10(1)

C349 S. 127 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

S. 127 modified (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(2), Sch. 3

C350 S. 127 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C351 S. 127 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

128 Avoidance of attachments, etc. E+W+S

(1) Where a company registered in England and Wales is being wound up by the court, any attachment, sequestration, distress or execution put in force against the estate or effects of the company after the commencement of the winding up is void.

(2) This section, so far as relates to any estate or effects of the company situated in England and Wales, applies in the case of a company registered in Scotland as it applies in the case of a company registered in England and Wales.

[F302 (3) In subsection (1) “attachment” includes a hold notice or a deduction notice under Part 1 of Schedule 8 to the Finance (No. 2) Act 2015 (enforcement by deduction from accounts) and, if subsection (1) has effect in relation to a deduction notice, it also has effect in relation to the hold notice to which the deduction notice relates (whenever the hold notice was given).]

Textual Amendments

F302 S. 128(3) inserted (18.11.2015) by Finance (No. 2) Act 2015 (c. 33), Sch. 8 para. 28

Modifications etc. (not altering text)

C345 Ss. 126-128 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C352 S. 128 excluded (25.4.1991) by Companies Act 1989 (c. 40), ss. 154, 155, 161(4); S.I. 1991/878, art. 2, Sch. .

C353 S. 128 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C354 S. 128 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C355 S. 128 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

Commencement of winding up E+W+S

129 Commencement of winding up by the court. E+W+S

(1) If, before the presentation of a petition for the winding up of a company by the court, a resolution has been passed by the company for voluntary winding up, the winding up of the company is deemed to have commenced at the time of the passing of the resolution; and unless the court, on proof of fraud or mistake, directs otherwise, all proceedings taken in the voluntary winding up are deemed to have been validly taken.

[F303 (1A) Where the court makes a winding-up order by virtue of paragraph 13(1)(e) of Schedule B1, the winding up is deemed to commence on the making of the order.]

(2) In any other case, the winding up of a company by the court is deemed to commence at the time of the presentation of the petition for winding up.

Textual Amendments

F303 S. 129(1A) inserted (15.9.2003) by 2002 c. 40, ss. 248(3), 279, Sch. 17 para. 16 (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)

C356 S. 129 applied (7.2.1994) by 1993 c. 48, s. 144(4)(b)(i) (with s. 6(8)); S.I. 1994/86, art. 2

C357 S. 129 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C358 S. 129(1A) modified (5.10.2004) by Energy Act 2004 (c. 20), ss. 159(1), 198, Sch. 20 para. 45; S.I. 2004/2575, art. 2(1), Sch. 1

C359 S. 129(1A) modified (1.10.2011) by Postal Services Act 2011 (c. 5), ss. 73, 93(2)(3), Sch. 10 para. 45; S.I. 2011/2329, art. 3 (with arts. 4, 5)

C360 S. 129(1A) modified by S.I. 2012/3013, Sch. 2 para. 38 (as inserted (4.7.2018) by The Insolvency of Registered Providers of Social Housing Regulations 2018 (S.I. 2018/728), regs. 1, 3(6), Sch. 2)

C361 S. 129(1A) modified (4.7.2018) by The Insolvency of Registered Providers of Social Housing Regulations 2018 (S.I. 2018/728), regs. 1, 2(3), Sch. 1 Pt. 2

C362 S. 129(1A) modified (5.7.2018) by Housing and Planning Act 2016 (c. 22), s. 216(3), Sch. 5 para. 44; S.I. 2018/805, reg. 3(b)

C363 S. 129(2) modified (temp.) (retrospective to 27.4.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), Sch. 10 paras. 8(1)(2), 9 (with ss. 2(2), 5(2))

130 Consequences of winding-up order. E+W+S

(1) On the making of a winding-up order, a copy of the order must 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.

(2) When a winding-up order has been made or a provisional liquidator has been appointed, no action or proceeding shall be proceeded with or commenced against the company or its property, except by leave of the court and subject to such terms as the court may impose.

(3) When an order has been made for winding up a company [F304 registered but not formed under the Companies Act 2006], no action or proceeding shall be commenced or proceeded with against the company or its property or any contributory of the company, in respect of any debt of the company, except by leave of the court, and subject to such terms as the court may impose.

[F305 (3A) In subsections (2) and (3), the reference to an action or proceeding includes action in respect of the company under Part 1 of Schedule 8 to the Finance (No. 2) Act 2015 (enforcement by deduction from accounts).]

(4) An order for winding up a company operates in favour of all the creditors and of all contributories of the company as if made on the joint petition of a creditor and of a contributory.

Textual Amendments

F304 Words in s. 130(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. 75(15)} (with art. 10, Sch. 1 para. 84)

F305 S. 130(3A) inserted (18.11.2015) by Finance (No. 2) Act 2015 (c. 33), Sch. 8 para. 29

Modifications etc. (not altering text)

C364 S. 130 excluded (25.4.1991) by Companies Act 1989 (c. 40), ss. 154, 155, 161(4), 182(4), Sch. 22 para. 5(2); S.I. 1991/878, art. 2, Sch..

C365 S. 130 modified (25.4.1991) by Companies Act 1989 (c. 40), s. 182(4), Sch. 22 para. 12(4); S.I. 1991/878, art. 2, Sch. .

C366 S. 130 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C367 S. 130 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C368 S. 130 modified (E.W.) (31.1.2019) by The Further Education Bodies (Insolvency) Regulations 2019 (S.I. 2019/138), regs. 1(1), 17 (with regs. 1(2), 3(a)(ii))

C369 S. 130(1) amended (1.7.1999) by 1998 c. 46, s. 125, Sch. 8 para. 23(2)(3); S.I. 1998/3178, arts. 2, 3 (as amended (28.6.2016) by The Building Societies (Floating Charges and Other Provisions) Order 2016 (S.I. 2016/679), arts. 1(1), 6)

S. 130(1) applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C370 S. 130(1) applied in part (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

Investigation procedures E+W+S

131 Company’s statement of affairs. E+W+S

(1) Where the court has made a winding-up order or appointed a provisional liquidator, the official receiver may 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) The statement F306 . . . 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 or as the official receiver may require

[F307 (2A) The statement shall [F308 be verified by the persons required to submit it]—

(a) in the case of an appointment of a provisional liquidator or a winding up by the court in England and Wales [F309 be verified by the persons required to submit it], by a statement of truth; and

(b) in the case of an appointment of a provisional liquidator or a winding up by the court in Scotland, [F310 by affidavit] [F310 contain a statutory declaration by the persons required to submit it].]

(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 formation of the company at any time within one year before the relevant date;

(c) those who are in the company’s employment, or have been in its employment within that year, and are in the official 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.

(4) Where any persons are required under this section to submit a statement of affairs to the official 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 official receiver.

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

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

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

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

(6) In this section—

• “employment” includes employment under a contract for services; and

• “the relevant date” means—

(a) in a case where a provisional liquidator is appointed, the date of his appointment; and

(b) in a case where no such appointment is made, the date of the winding-up order.

(7) 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.

(8) In the application of this section to Scotland references to the official receiver are to the liquidator or, in a case where a provisional liquidator is appointed, the provisional liquidator.

Textual Amendments

F306 Words in s. 131(2) omitted (6.4.2010) by virtue of The Legislative Reform (Insolvency) (Miscellaneous Provisions) Order 2010 (S.I. 2010/18), art. 5(4)(a)

F307 S. 131(2A) inserted (6.4.2010) by The Legislative Reform (Insolvency) (Miscellaneous Provisions) Order 2010 (S.I. 2010/18), art. 5(4)(b)

F308 Words in s. 131(2A) repealed (S.) (1.4.2016 for specified purposes, 6.4.2019 in so far as not already in force) by The Public Services Reform (Insolvency) (Scotland) Order 2016 (S.S.I. 2016/141), arts. 1(3)(4), 10(a) (with arts. 14, 15) (see S.I. 2019/816, reg. 4(a))

F309 Words in s. 131(2A)(a) inserted (S.) (1.4.2016 for specified purposes, 6.4.2019 in so far as not already in force) by The Public Services Reform (Insolvency) (Scotland) Order 2016 (S.S.I. 2016/141), arts. 1(3)(4), 10(b) (with arts. 14, 15) (see S.I. 2019/816, reg. 4(a))

F310 Words in s. 131(2A)(b) substituted (S.) (1.4.2016 for specified purposes, 6.4.2019 in so far as not already in force) by The Public Services Reform (Insolvency) (Scotland) Order 2016 (S.S.I. 2016/141), arts. 1(3)(4), 10(c) (with arts. 14, 15) (see S.I. 2019/816, reg. 4(a))

Modifications etc. (not altering text)

C371 S. 131 applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 7(3), Sch. 3 Pt. II para. 7

s. 131 applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 8, Sch. 4 Pt. II para. 10

S. 131 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C372 S. 131 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C373 S. 131 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C374 S. 131 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

132 Investigation by official receiver. E+W+S

(1) Where a winding-up order is made by the court in England and Wales, it is the duty of the official receiver to investigate—

(a) if the company has failed, the causes of the failure; and

(b) generally, the promotion, formation, business, dealings and affairs of the company,

and to make such report (if any) to the court as he thinks fit.

(2) The report is, in any proceedings, prima facie evidence of the facts stated in it.

Modifications etc. (not altering text)

C375 S. 132 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

133 Public examination of officers E+W+S

(1) Where a company is being wound up by the court, the official receiver or, in Scotland, the liquidator may at any time before the dissolution of the company apply to the court for the public examination of any person who—

(a) is or has been an officer of the company; or

(b) has acted as liquidator or administrator of the company or as receiver or manager or, in Scotland, receiver of its property; or

(c) not being a person falling within paragraph (a) or (b), is or has been concerned, or has taken part, in the promotion, formation or management of the company.

(2) Unless the court otherwise orders, the official receiver or, in Scotland, the liquidator shall make an application under subsection (1) if he is requested in accordance with the rules to do so by—

(a) one-half, in value, of the company’s creditors; or

(b) three-quarters, in value, of the company’s contributories.

(3) On an application under subsection (1), the court shall direct that a public examination of the person to whom the application relates shall be held on a day appointed by the court; and that person shall attend on that day and be publicly examined as to the promotion, formation or management of the company or as to the conduct of its business and affairs, or his conduct or dealings in relation to the company.

(4) The following may take part in the public examination of a person under this section and may question that person concerning the matters mentioned in subsection (3), namely—

(a) the official receiver;

(b) the liquidator of the company;

(c) any person who has been appointed as special manager of the company’s property or business;

(d) any creditor of the company who has tendered a proof or, in Scotland, submitted a claim in the winding up;

(e) any contributory of the company.

Modifications etc. (not altering text)

C376 S.133 applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 8(3)(9), Sch. 4 Pt. II para. 11

S. 133 applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 7(3), Sch. 3 Pt. II para. 8

s. 133 applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 8(3)(9), SCh. 4, Pt. II, para. 11

S. 133 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C377 S. 133 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C378 Ss. 133-135 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C379 S. 133 applied (with modifications) (E.W.) (15.3.2024) by The Water Industry (Special Administration) Regulations 2024 (S.I. 2024/205), regs. 2(2), 5(1) (with reg. 64)

134 Enforcement of s. 133. E+W+S

(1) If a person without reasonable excuse fails at any time to attend his public examination under section 133, he is guilty of a contempt of court and liable to be punished accordingly.

(2) In a case where a person without reasonable excuse fails at any time to attend his examination under section 133 or there are reasonable grounds for believing that a person has absconded, or is about to abscond, with a view to avoiding or delaying his examination under that section, the court may cause a warrant to be issued to a constable or prescribed officer of the court—

(a) for the arrest of that person; and

(b) for the seizure of any books, papers, records, money or goods in that person’s possession.

(3) In such a case the court may authorise the person arrested under the warrant to be kept in custody, and anything seized under such a warrant to be held, in accordance with the rules, until such time as the court may order.

Modifications etc. (not altering text)

C378 Ss. 133-135 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C380 S. 134 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C381 S. 134 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

Appointment of liquidator E+W+S

135 Appointment and powers of provisional liquidator. E+W+S

(1) Subject to the provisions of this section, the court may, at any time after the presentation of a winding-up petition, appoint a liquidator provisionally.

(2) In England and Wales, the appointment of a provisional liquidator may be made at any time before the making of a winding-up order; and either the official receiver or any other fit person may be appointed.

(3) In Scotland, such an appointment may be made at any time before the first appointment of liquidators.

(4) The provisional liquidator shall carry out such functions as the court may confer on him.

(5) When a liquidator is provisionally appointed by the court, his powers may be limited by the order appointing him.

Modifications etc. (not altering text)

C378 Ss. 133-135 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C382 S. 135 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C383 S. 135 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C384 S. 135 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2 (as amended (7.4.2017) by The Deregulation Act 2015, the Small Business, Enterprise and Employment Act 2015 and the Insolvency (Amendment) Act (Northern Ireland) 2016 (Consequential Amendments and Transitional Provisions) Regulations 2017 (S.I. 2017/400), regs. 1(2), 5(4))

C385 S. 135 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 145, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 3 (as amended (7.4.2017) by The Deregulation Act 2015, the Small Business, Enterprise and Employment Act 2015 and the Insolvency (Amendment) Act (Northern Ireland) 2016 (Consequential Amendments and Transitional Provisions) Regulations 2017 (S.I. 2017/400), regs. 1(2), 5(10)

C386 S. 135 excluded (31.1.2019) by Technical and Further Education Act 2017 (c. 19), ss. 11, 47(2); S.I. 2018/1161, reg. 3(a)

136 Functions of official receiver in relation to office of liquidator. E+W+S

(1) The following provisions of this section have effect, subject to section 140 below, on a winding-up order being made by the court in England and Wales.

(2) The official receiver, by virtue of his office, becomes the liquidator of the company and continues in office until another person becomes liquidator under the provisions of this Part.

(3) The official receiver is, by virtue of his office, the liquidator during any vacancy.

(4) At any time when he is the liquidator of the company, the official receiver may [F311 in accordance with the rules seek nominations from] the company’s creditors and contributories for the purpose of choosing a person to be liquidator of the company in place of the official receiver.

(5) It is the duty of the official receiver—

(a) as soon as practicable in the period of 12 weeks beginning with the day on which the winding-up order was made, to decide whether to exercise his power under sub-section (4) F312 ... , and

(b) if in pursuance of paragraph (a) he decides not to exercise that power, to give notice of his decision, before the end of that period, to the court and to the company’s creditors and contributories, and

(c) (whether or not he has decided to exercise that power) to exercise his power F313 ... under subsection (4) if he is at any time requested, in accordance with rules, to do so by one-quarter, in value, of the company’s creditors;

and accordingly, where the duty imposed by paragraph (c) arises before the official receiver has performed a duty imposed by paragraph (a) or (b), he is not required to perform the latter duty.

(6) A notice given under subsection (5)(b) to the company’s creditors shall contain an explanation of the creditors’ power under subsection (5)(c) to require the official receiver to [F314 seek nominations from] the company’s creditors and contributories.

Textual Amendments

F311 Words in s. 136(4) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 31(2); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F312 Words in s. 136(5)(a) omitted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 31(3); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F313 Words in s. 136(5)(c) omitted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 31(3); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F314 Words in s. 136(6) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 31(4); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

Modifications etc. (not altering text)

C387 S. 136 applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 8(3)(9), Sch. 4 Pt. II, para. 12

C388 S. 136 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

137 Appointment by Secretary of State. E+W+S

(1) In a winding up by the court in England and Wales the official receiver may, at any time when he is the liquidator of the company, apply to the Secretary of State for the appointment of a person as liquidator in his place.

(2) If [F315 nominations are sought from the company's creditors and contributories] in pursuance of a decision under section 136(5)(a), but no person is chosen to be liquidator as a result F316 ..., it is the duty of the official receiver to decide whether to refer the need for an appointment to the Secretary of State.

(3) On an application under subsection (1), or a reference made in pursuance of a decision under subsection (2), the Secretary of State shall either make an appointment or decline to make one.

(4) Where a liquidator has been appointed by the Secretary of State under subsection (3), the liquidator shall give notice of his appointment to the company’s creditors or, if the court so allows, shall advertise his appointment in accordance with the directions of the court.

(5) In that notice or advertisement the liquidator [F317 must explain the procedure for establishing a liquidation committee under section 141.]

Textual Amendments

F315 Words in s. 137(2) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 32(2)(a); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F316 Words in s. 137(2) omitted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 32(2)(b); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F317 Words in s. 137(5) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 32(3); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

Modifications etc. (not altering text)

C389 S. 137 applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 8(3)(9), Sch. 4 Pt. II para. 13

C390 S. 137 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

138 Appointment of liquidator in Scotland. E+W+S

(1) Where a winding-up order is made by the court in Scotland, a liquidator shall be appointed by the court at the time when the order is made.

(2) The liquidator so appointed (here referred to as “the interim liquidator”) continues in office until another person becomes liquidator in his place under this section or the next.

(3) The interim liquidator shall (subject to the next subsection) as soon as practicable in the period of 28 days beginning with the day on which the winding-up order was made or such longer period as the court may allow, [F318 in accordance with the rules seek nominations from] the company’s creditors and contributories for the purpose of choosing a person (who may be the person who is the interim liquidator) to be liquidator of the company in place of the interim liquidator.

(4) If it appears to the interim liquidator, in any case where a company is being wound up on grounds including its inability to pay its debts, that it would be inappropriate to [F319 seek a nomination from the company's contributories under subsection (3), he may seek a nomination only from] the company’s creditors for the purpose mentioned in that subsection.

(5) If [F320 a nomination is sought from the company's creditors, or nominations are sought from the company's creditors and contributories,] in pursuance of this section but no person is appointed or nominated [F321 as a result], the interim liquidator shall make a report to the court which shall appoint either the interim liquidator or some other person to be liquidator of the company.

(6) A person who becomes liquidator of the company in place of the interim liquidator shall, unless he is appointed by the court, forthwith notify the court of that fact.

Textual Amendments

F318 Words in s. 138(3) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 33(2); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F319 Words in s. 138(4) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 33(3); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F320 Words in s. 138(5) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 33(4)(a); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F321 Words in s. 138(5) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 33(4)(b); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

Modifications etc. (not altering text)

C391 S. 138 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C392 S. 138 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C393 Ss. 138-140 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

139 Choice of liquidator [F322 by] creditors and contributories. E+W+S

(1) This section applies where a company is being wound up by the court and [F323 nominations are sought from the company's creditors and contributories] for the purpose of choosing a person to be liquidator of the company.

(2) The creditors and the contributories [F324 may in accordance with the rules] nominate a person to be liquidator.

(3) 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 contributories.

(4) In the case of different persons being nominated, any contributory or creditor 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) appointing the person nominated as liquidator by the contributories to be a 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

F322 Word in s. 139 heading substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 34(4); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F323 Words in s. 139(1) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 34(2); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F324 Words in s. 139(2) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 34(3); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

Modifications etc. (not altering text)

C393 Ss. 138-140 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C394 S. 139 applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 8(3)(9), Sch. 4 Pt. II para. 14

S. 139 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C395 S. 139 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

140 Appointment by the court following administration or voluntary arrangement. E+W+S

[F325 (1) Where a winding-up order is made immediately upon the appointment of an administrator ceasing to have effect, the court may appoint as liquidator of the company the person whose appointment as administrator has ceased to have effect.]

(2) Where a winding-up order is made at a time when there is a supervisor of a voluntary arrangement approved in relation to the company under Part I, the court may appoint as liquidator of the company the person who is the supervisor at the time when the winding-up order is made.

(3) Where the court makes an appointment under this section, the official receiver does not become the liquidator as otherwise provided by section 136(2), and [F326 section 136(5)(a) and (b) does not apply.]

Textual Amendments

F325 S. 140(1) substituted (15.9.2003) by 2002 c. 40, ss. 248(3), 279, Sch. 17 para. 17 (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))

F326 Words in s. 140(3) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 35; S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

Modifications etc. (not altering text)

C393 Ss. 138-140 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C396 S. 140 applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 8(3)(9), Sch. 4 Pt. II para. 15 (as amended (1.7.2005) by S.I. 2005/1516, art. 9(3))

S. 140 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C397 S. 140 applied (with modifications) (E.W.) (15.3.2024) by The Water Industry (Special Administration) Regulations 2024 (S.I. 2024/205), regs. 2(2), 5(1) (with reg. 64)

Liquidation committees E+W+S

141 Liquidation committee (England and Wales). E+W+S

[F327 (1) This section applies where a winding up order has been made by the court in England and Wales.

(2) If both the company's creditors and the company's contributories decide that a liquidation committee should be established, a liquidation committee is to be established in accordance with the rules.

(3) If only the company's creditors, or only the company's contributories, decide that a liquidation committee should be established, a liquidation committee is to be established in accordance with the rules unless the court orders otherwise.

(3A) A “liquidation committee” is a committee having such functions as are conferred on it by or under this Act.

(3B) The liquidator must seek a decision from the company's creditors and contributories as to whether a liquidation committee should be established if requested, in accordance with the rules, to do so by one-tenth in value of the company's creditors.

(3C) Subsection (3B) does not apply where the liquidator is the official receiver.]

(4) The liquidation committee is not to be able or required to carry out its functions at any time when the official receiver is liquidator; but at any such time its functions are vested in the Secretary of State except to the extent that the rules otherwise provide.

(5) Where there is for the time being no liquidation committee, and the liquidator is a person other than the official receiver, the functions of such a committee are vested in the Secretary of State except to the extent that the rules otherwise provide.

Textual Amendments

F327 S. 141(1)-(3C) substituted for (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 36; S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

Modifications etc. (not altering text)

C398 S. 141 applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 8(3)(9), Sch. 4 Pt. II para. 16

S. 141 amended (1.12.2001) by 2000 c. 8, s. 371(4)(b); S.I. 2001/3538, art. 2(1)

C399 S. 141 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2 (as amended (13.3.2018) by The Small Business, Enterprise and Employment Act 2015 (Consequential Amendments, Savings and Transitional Provisions) Regulations 2018 (S.I. 2018/208), regs. 1(3), 5(3))

C400 S. 141 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

142 Liquidation committee (Scotland). E+W+S

[F328 (1) This section applies where a winding up order has been made by the court in Scotland.

(2) If both the company's creditors and the company's contributories decide that a liquidation committee should be established, a liquidation committee is to be established in accordance with the rules.

(3) If only the company's creditors, or only the company's contributories, decide that a liquidation committee should be established, a liquidation committee is to be established in accordance with the rules unless the court orders otherwise.

[F329 (3A) A “liquidation committee” is a committee having such functions as are conferred on it by or under this Act.]

(4) A liquidator appointed by the court other than under section 139(4)(a) must seek a decision from the company's creditors and contributories as to whether a liquidation committee should be established if requested, in accordance with the rules, to do so by one-tenth in value of the company's creditors.]

(5) Where in the case of any winding up there is for the time being no liquidation committee, the functions of such a committee are vested in the court except to the extent that the rules otherwise provide.

(6) [F330 [F331 A “liquidation committee” is a committee having the powers and duties conferred and imposed on it by this Act, and] such of the powers and duties of commissioners in a sequestration as may be conferred and imposed on such committees by the rules.]

Textual Amendments

F328 S. 142(1)-(4) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 37(2); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F329 S. 142(3A) inserted (S.) (1.10.2017 for specified purposes) by The Public Services Reform (Corporate Insolvency and Bankruptcy) (Scotland) Order 2017 (S.S.I. 2017/209), arts. 1(3), 4(a)

F330 S. 142(6) repealed (S.) (1.10.2017 for specified purposes) by The Public Services Reform (Corporate Insolvency and Bankruptcy) (Scotland) Order 2017 (S.S.I. 2017/209), arts. 1(3), 4(b)

F331 Words in s. 142(6) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 37(3); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

Modifications etc. (not altering text)

C401 S. 142 amended (1.12.2001) by 2000 c. 8, s. 371(4)(b); S.I. 2001/3538, art. 2(1)

S. 142 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C402 S. 142 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2 (as amended (13.3.2018) by The Small Business, Enterprise and Employment Act 2015 (Consequential Amendments, Savings and Transitional Provisions) Regulations 2018 (S.I. 2018/208), regs. 1(3), 5(3))

C403 S. 142 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C404 Ss. 142-146 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

The liquidator’s functions E+W+S

143 General functions in winding up by the court. E+W+S

(1) The functions of the liquidator of a company which is being wound up by the court are to secure that the assets of the company are got in, realised and distributed to the company’s creditors and, if there is a surplus, to the persons entitled to it.

(2) It is the duty of the liquidator of a company which is being wound up by the court in England and Wales, if he is not the official receiver—

(a) to furnish the official receiver with such information,

(b) to produce to the official receiver, and permit inspection by the official receiver of, such books, papers and other records, and

(c) to give the official receiver such other assistance,

as the official receiver may reasonably require for the purposes of carrying out his functions in relation to the winding up.

Modifications etc. (not altering text)

C404 Ss. 142-146 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C405 S. 143 applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 8(3)(9), Sch. 4 Pt. II para. 17

S. 143 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C406 S. 143 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C407 S. 143 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C408 S. 143 modified (E.W.) (31.1.2019) by The Further Education Bodies (Insolvency) Regulations 2019 (S.I. 2019/138), regs. 1(1), 18 (with regs. 1(2), 3(a)(ii))

144 Custody of company’s property. E+W+S

(1) When a winding-up order has been made, or where a provisional liquidator has been appointed, the liquidator or the provisional liquidator (as the case may be) shall take into his custody or under his control all the property and things in action to which the company is or appears to be entitled.

(2) In a winding up by the court in Scotland, if and so long as there is no liquidator, all the property of the company is deemed to be in the custody of the court.

Modifications etc. (not altering text)

C404 Ss. 142-146 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C409 S. 144 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C410 S. 144 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C411 S. 144 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

145 Vesting of company property in liquidator. E+W+S

(1) When a company is being wound up by the court, the court may on the application of the liquidator by order direct that all or any part of the property of whatsoever description belonging to the company or held by trustees on its behalf shall vest in the liquidator by his official name; and thereupon the property to which the order relates vests accordingly.

(2) The liquidator may, after giving such indemnity (if any) as the court may direct, bring or defend in his official name any action or other legal proceeding which relates to that property or which it is necessary to bring or defend for the purpose of effectually winding up the company and recovering its property.

Modifications etc. (not altering text)

C404 Ss. 142-146 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C412 S. 145 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C413 S. 145 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C414 S. 145 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

[F332 146 Final account E+W+S

(1) This section applies where a company is being wound up by the court and the liquidator is not the official receiver.

(2) If it appears to the liquidator that the winding up of the company is for practical purposes complete 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.

(3) The liquidator must—

(a) send a copy of the account to the company's creditors (other than opted-out creditors), and

(b) give the company's creditors (other than opted-out creditors) a notice explaining the effect of section 174(4)(d) and how they may object to the liquidator's release.

(4) The liquidator must during the relevant period send to the court and 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.

(5) 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.

F333 (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F333 (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

F332 S. 146 substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 38; S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F333 S. 146(6)(7) omitted (31.12.2020) by virtue of The Insolvency (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/146), reg. 1(3), Sch. para. 22 (with regs. 4, 5) (as amended by S.I. 2019/1459, reg. 1(2), Sch. para. 2); 2020 c. 1, Sch. 5 para. 1(1)

Modifications etc. (not altering text)

C404 Ss. 142-146 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C415 S. 146 applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 8(3)(9), Sch. 4 Pt. II para. 18

S. 146 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C416 S. 146 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C417 S. 146(4) modified (E.W.) (31.1.2019) by The Further Education Bodies (Insolvency) Regulations 2019 (S.I. 2019/138), regs. 1(1), 19 (with regs. 1(2), 3(a)(ii))

C418 S. 146(6)(7) amendment by S.I. 2017/702, Sch. para. 7 extended to Scotland (S.) (6.4.2019) by The Small Business, Enterprise and Employment Act 2015 (Commencement No. 7, Consequential, Transitional and Savings Provisions) Regulations 2019 (S.I. 2019/816), reg. 6(2)

F334 146A Official receiver’s duty to send statement to registrar about other proceedings E+W+S

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

Textual Amendments

F334 S. 146A omitted (31.12.2020) by virtue of The Insolvency (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/146), reg. 1(3), Sch. para. 23 (with regs. 4, 5); 2020 c. 1, Sch. 5 para. 1(1)

General powers of court E+W+S

147 Power to stay or sist winding up. E+W+S

(1) The court may at any time after an order for winding up, on the application either of the liquidator or the official receiver or any creditor or contributory, and on proof to the satisfaction of the court that all proceedings in the winding up ought to be stayed or sisted, make an order staying or sisting the proceedings, either altogether or for a limited time, on such terms and conditions as the court thinks fit.

(2) The court may, before making an order, require the official receiver to furnish to it a report with respect to any facts or matters which are in his opinion relevant to the application.

(3) A copy of every order made under this section 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)

C419 S. 147 applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 8(3)(9), Sch. 4 Pt. II para. 19

S. 147 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C420 S. 147 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C421 S. 147 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C422 S. 147 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C423 S. 147(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 (as amended (28.6.2016) by The Building Societies (Floating Charges and Other Provisions) Order 2016 (S.I. 2016/679), arts. 1(1), 6)

148 Settlement of list of contributories and application of assets. E+W+S

(1) As soon as may be after making a winding-up order, the court shall settle a list of contributories, with power to rectify the register of members in all cases where rectification is required F335 . . . , and shall cause the company’s assets to be collected, and applied in discharge of its liabilities.

(2) If it appears to the court that it will not be necessary to make calls on or adjust the rights of contributories, the court may dispense with the settlement of a list of contributories.

(3) In settling the list, the court shall distinguish between persons who are contributories in their own right and persons who are contributories as being representatives of or liable for the debts of others.

Textual Amendments

F335 Words in s. 148(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(16)} (with art. 10, Sch. 1 para. 84)

Modifications etc. (not altering text)

C424 S. 148 modified by S.I. 1986/1918, Rule 5

C425 S. 148 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

149 Debts due from contributory to company. E+W+S

(1) The court may, at any time after making a winding-up order, make an order on any contributory for the time being on the list of contributories to pay, in manner directed by the order, any money due from him (or from the estate of the person who he represents) to the company, exclusive of any money payable by him or the estate by virtue of any call F336 . . . .

(2) The court in making such an order may—

(a) in the case of an unlimited company, allow to the contributory by way of set-off any money due to him or the estate which he represents from the company on any independent dealing or contract with the company, but not any money due to him as a member of the company in respect of any dividend or profit, and

(b) in the case of a limited company, make to any director or manager whose liability is unlimited or to his estate the like allowance.

(3) In the case of any company, whether limited or unlimited, when all the creditors are paid in full (together with interest at the official rate) any money due on any account whatever to a contributory from the company may be allowed to him by way of set-off against any subsequent call.

Textual Amendments

F336 Words in s. 149(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(16)} (with art. 10, Sch. 1 para. 84)

Modifications etc. (not altering text)

C426 S. 149 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

150 Power to make calls. E+W+S

(1) The court may, at any time after making a winding-up order, and either before or after it has ascertained the sufficiency of the company’s assets, make calls on all or any of the contributories for the time being settled on the list of the contributories to the extent of their liability, for payment of any money which the court considers necessary to satisfy the company’s debts and liabilities, and the expenses of winding up, and for the adjustment of the rights of the contributories among themselves, and make an order for payment of any calls so made.

(2) In making a call the court may take into consideration the probability that some of the contributories may partly or wholly fail to pay it.

Modifications etc. (not altering text)

C427 S. 150 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

F337 151 Payment into bank of money due to company. E+W+S

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

Textual Amendments

F337 S. 151 omitted (1.10.2015) by virtue of Deregulation Act 2015 (c. 20), s. 115(7), Sch. 6 para. 9; S.I. 2015/1732, art. 2(e)(iii)

152 Order on contributory to be conclusive evidence. E+W+S

(1) An order made by the court on a contributory is conclusive evidence that the money (if any) thereby appearing to be due or ordered to be paid is due, but subject to any right of appeal.

(2) All other pertinent matters stated in the order are to be taken as truly stated as against all persons and in all proceedings except proceedings in Scotland against the heritable estate of a deceased contributory; and in that case the order is only prima facie evidence for the purpose of charging his heritable estate, unless his heirs or legatees of heritage were on the list of contributories at the time of the order being made.

Modifications etc. (not altering text)

C428 S. 152 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

153 Power to exclude creditors not proving in time. E+W+S

The court may fix a time or times within which creditors are to prove their debts or claims or to be excluded from the benefit of any distribution made before those debts are proved.

Modifications etc. (not altering text)

C429 S. 153 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C430 S. 153 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

154 Adjustment of rights of contributories. E+W+S

The court shall adjust the rights of the contributories among themselves and distribute any surplus among the persons entitled to it.

Modifications etc. (not altering text)

C431 S. 154 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

155 Inspection of books by creditors, etc. E+W+S

(1) The court may, at any time after making a winding-up order, make such order for inspection of the company’s books and papers by creditors and contributories as the court thinks just; and any books and papers in the company’s possession may be inspected by creditors and contributories accordingly, but not further or otherwise.

(2) Nothing in this section excludes or restricts any statutory rights of a government department or person acting under the authority of a government department.

[F338 (3) For the purposes of subsection (2) above, references to a government department shall be construed as including references to any part of the Scottish Administration.]

Textual Amendments

F338 S. 155(3) inserted (1.7.1999) by S.I. 1999/1820, art. 4, Sch. 2 Pt. I para. 85; S.I. 1998/3178, art. 3

Modifications etc. (not altering text)

C432 S. 155 excluded by Social Security Pensions Act 1975 (c. 60, SIF 113:1), s. 57D(6) (as inserted by Social Security Act 1990 (c. 27, SIF 113:1), s. 14, Sch. 4 Pt. I para. 1)

S. 155 excluded (7.2.1994) by 1993 c. 48, s. 122(1) (with s. 6(8)); S.I. 1994/86, art. 2

C433 S. 155 excluded (6.4.1997) by 1995 c. 26, s. 26(1); S.I. 1997/664, art. 2(3), Sch. Pt. II (with transitional adaptations, modifications and savings in arts. 3-14)

C434 S. 155 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C435 S. 155 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

156 Payment of expenses of winding up. E+W+S

The court may, in the event of the assets being insufficient to satisfy the liabilities, make an order as to the payment out of the assets of the expenses incurred in the winding up in such order of priority as the court thinks just.

Modifications etc. (not altering text)

C436 S. 156 restricted (6.3.2008) by The Regulated Covered Bonds Regulations 2008 (S.I. 2008/346), reg. 46, Sch. para. 2(3)

C437 S. 156 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C438 S. 156 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

157 Attendance at company meetings (Scotland). E+W+S

In the winding up by the court of a company registered in Scotland, the court has power to require the attendance of any officer of the company at any meeting of creditors or of contributories, or of a liquidation committee, for the purpose of giving information as to the trade, dealings, affairs or property of the company.

Modifications etc. (not altering text)

C439 S. 157 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C440 S. 157 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

158 Power to arrest absconding contributory. E+W+S

The court, at any time either before or after making a winding-up order, on proof of probable cause for believing that a contributory is about to quit the United Kingdom or otherwise to abscond or to remove or conceal any of his property for the purpose of evading payment of calls, may cause the contributory to be arrested and his books and papers and moveable personal property to be seized and him and them to be kept safely until such time as the court may order.

Modifications etc. (not altering text)

C441 S. 158 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

159 Powers of court to be cumulative. E+W+S

Powers conferred [F339 on the court by this Act] are in addition to, and not in restriction of, any existing powers of instituting proceedings against a contributory or debtor of the company, or the estate of any contributory or debtor, for the recovery of any call or other sums.

Textual Amendments

F339 Words in s. 159 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(17)} (with art. 10, Sch. 1 para. 84)

Modifications etc. (not altering text)

C442 S. 159 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

160 Delegation of powers to liquidator (England and Wales). E+W+S

(1) Provision may be made by rules for enabling or requiring all or any of the powers and duties conferred and imposed on the court in England and Wales F340 ... in respect of the following matters—

[F341 (a) the seeking of decisions on any matter from creditors and contributories,]

(b) the settling of lists of contributories and the rectifying of the register of members where required, and the collection and application of the assets,

(c) the payment, delivery, conveyance, surrender or transfer of money, property, books or papers to the liquidator,

(d) the making of calls,

(e) the fixing of a time within which debts and claims must be proved,

to be exercised or performed by the liquidator as an officer of the court, and subject to the court’s control.

(2) But the liquidator shall not, without the special leave of the court, rectify the register of members, and shall not make any call without either that special leave or the sanction of the liquidation committee.

Textual Amendments

F340 Words in s. 160(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(18)} (with art. 10, Sch. 1 para. 84)

F341 S. 160(1)(a) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 39; S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

Modifications etc. (not altering text)

C443 S. 160 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2 (as amended (13.3.2018) by The Small Business, Enterprise and Employment Act 2015 (Consequential Amendments, Savings and Transitional Provisions) Regulations 2018 (S.I. 2018/208), regs. 1(3), 5(3))

C444 S. 160 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

Enforcement of, and appeal from, orders E+W+S

161 Orders for calls on contributories (Scotland). E+W+S

(1) In Scotland, where an order, interlocutor or decree has been made for winding up a company by the court, it is competent to the court, on production by the liquidators of a list certified by them of the names of the contributories liable in payment of any calls, and of the amount due by each contributory, and of the date when that amount became due, to pronounce forthwith a decree against those contributories for payment of the sums so certified to be due, with interest from that date until payment (at 5 per cent. per annum) in the same way and to the same effect as if they had severally consented to registration for execution, on a charge of 6 days, of a legal obligation to pay those calls and interest.

(2) The decree may be extracted immediately, and no suspension of it is competent, except on caution or consignation, unless with special leave of the court.

Modifications etc. (not altering text)

C445 S. 161 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

162 Appeals from orders in Scotland. E+W+S

(1) Subject to the provision of this section and to rules of court, an appeal from any order or decision made or given in the winding up of a company by the court in Scotland under this Act lies in the same manner and subject to the same conditions as an appeal from an order or decision of the court in cases within its ordinary jurisdiction.

(2) In regard to orders of judgments pronounced by the judge acting as vacation judge [F342 in pursuance of section 4 of the M8 Administration of Justice (Scotland) Act 1933]—

(a) none of the orders specified in Part I of Schedule 3 to this Act are subject to review, reduction, suspension or stay of execution, and

(b) every other order or judgment (except as mentioned below) may be submitted to review by the Inner House by reclaiming motion enrolled within 14 days from the date of the order or judgment.

(3) However, an order being one of those specified in Part II of that Schedule shall, from the date of the order and notwithstanding that it has been submitted to review as above, be carried out and receive effect until the Inner House have disposed of the matter.

(4) In regard to orders or judgments pronounced in Scotland by a Lord Ordinary before whom proceedings in a winding up are being taken, any such order or judgment may be submitted to review by the Inner House by reclaiming motion enrolled within 14 days from its date; but should it not be so submitted to review during session, the provisions of this section in regard to orders or judgments pronounced by the judge acting as vacation judge apply.

(5) Nothing in this section affects provisions of [F343 the Companies Acts] or this Act in reference to decrees in Scotland for payment of calls in the winding up of companies, whether voluntary or by the court.

Textual Amendments

F342 Words repealed (S.) by Court of Session Act 1988 (c. 36, SIF 36:1), s. 52(2), Sch. 2

F343 Words in s. 162(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(19)} (with art. 10, Sch. 1 para. 84)

Modifications etc. (not altering text)

C446 S. 162 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C447 S. 162 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C448 S. 162 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C449 S. 162 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

Marginal Citations

M8 1933 c. 41.

Chapter VII E+W+S Liquidators

Preliminary E+W+S

163 Style and title of liquidators. E+W+S

The liquidator of a company shall be described—

(a) where a person other than the official receiver is liquidator, by the style of “the liquidator” of the particular company, or

(b) where the official receiver is liquidator, by the style of “the official receiver and liquidator” of the particular company;

and in neither case shall he be described by an individual name.

Modifications etc. (not altering text)

C450 S. 163 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C451 S. 163 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C452 Ss. 163-167 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

164 Corrupt inducement affecting appointment. E+W+S

A person who gives, or agrees or offers to give, to any member or creditor of a company any valuable consideration with a view to securing his own appointment or nomination, or to securing or preventing the appointment or nomination of some person other than himself, as the company’s liquidator is liable to a fine.

Modifications etc. (not altering text)

C452 Ss. 163-167 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C453 S. 164 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C454 S. 164 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

Liquidator’s powers and duties E+W+S

165 Voluntary winding up. E+W+S

(1) This section has effect where a company is being wound up voluntarily, but subject to section 166 below in the case of a creditor’s voluntary winding up.

[F344 (2) The liquidator may exercise any of the powers specified in Parts 1 to 3 of Schedule 4.]

(4) The liquidator may—

(a) exercise the court’s power of settling a list of contributories (which list is prima facie evidence of the liability of the persons named in it to be contributories),

(b) exercise the court’s power of making calls,

(c) summon general meetings of the company for the purpose of obtaining its sanction by [F345 special resolution] or for any other purpose he may think fit.

(5) The liquidator shall pay the company’s debts and adjust the rights of the contributories among themselves.

(6) Where the liquidator in exercise of the powers conferred on him by this Act disposes of any property of the company to a person who is connected with the company (within the meaning of section 249 in Part VII), he shall, if there is for the time being a liquidation committee, give notice to the committee of that exercise of his powers.

Textual Amendments

F344 S. 165(2) substituted for s. 165(2)(3) (26.5.2015) by Small Business, Enterprise and Employment Act 2015 (c. 26), ss. 120(2), 164(3)(i)(i)

F345 Words in s. 165(4)(c) substituted (1.10.2007 with application as noted in Sch. 4 para. 41(2) 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. 41(1)(b) (with art. 12)

Modifications etc. (not altering text)

C452 Ss. 163-167 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C455 S. 165 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C456 S. 165(2) modified by SI 1994/2421 Sch. 3 para. 8A(1) (as inserted (6.4.2017) by The Deregulation Act 2015 and Small Business, Enterprise and Employment Act 2015 (Consequential Amendments) (Savings) Regulations 2017 (S.I. 2017/540), reg. 1, Sch. 2 para. 7(2) (with reg. 4))

C457 S. 165 modified (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(2), Sch. 3

166 Creditors’ voluntary winding up. E+W+S

(1) This section applies where, in the case of a creditors’ voluntary winding up, a liquidator has been nominated by the company.

[F346 (1A) The exercise by the liquidator of the power specified in paragraph 6 of Schedule 4 to this Act (power to sell any of the company's property) shall not be challengeable on the ground of any prior inhibition.]

(2) The powers conferred on the liquidator by section 165 shall not be exercised, except with the sanction of the court, [F347 before—

(a) the company's creditors under section 100 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.]

(3) Subsection (2) does not apply in relation to the power of the liquidator—

(a) to take into his custody or under his control all the property to which the company is or appears to be entitled;

(b) to dispose of perishable goods and other goods the value of which is likely to diminish if they are not immediately disposed of; and

(c) to do all such other things as may be necessary for the protection of the company’s assets.

F348 (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) [F349 If the directors fail to comply with—

( a) section 99(1), (2) or (2A), or

(b) section 100(1B),]

the liquidator shall, within 7 days of the relevant day, apply to the court for directions as to the manner in which that default is to be remedied.

(6) “The relevant day” means the day on which the liquidator was nominated by the company or the day on which he first became aware of the default, whichever is the later.

(7) If the liquidator without reasonable excuse fails to comply with this section, he is liable to a fine.

Textual Amendments

F346 S. 166(1A) inserted (S.) (22.4.2009) by Bankruptcy and Diligence etc. (Scotland) Act 2007 (asp 3), ss. 155(3), 227(3) (with s. 223); S.S.I. 2009/67, art. 3(a) (with arts. 5, 6); as amended by S.S.I. 2011/31, art. 5

F347 Words in s. 166(2) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 40(2); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F348 S. 166(4) omitted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 40(3); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F349 Words in s. 166(5) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 40(4); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

Modifications etc. (not altering text)

C452 Ss. 163-167 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C458 S. 166 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C459 S. 166(5) modified (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(2), Sch. 3

167 Winding up by the court. E+W+S

[F350 (1) Where a company is being wound up by the court, the liquidator may exercise any of the powers specified in Parts 1 to 3 of Schedule 4.]

(2) Where the liquidator (not being the official receiver), in exercise of the powers conferred on him by this Act—

(a) disposes of any property of the company to a person who is connected with the company (within the meaning of section 249 in Part VII) or

(b) employs a solicitor to assist him in the carrying out of his functions,

he shall, if there is for the time being a liquidation committee, give notice to the committee of that exercise of his powers.

(3) The exercise by the liquidator in a winding up by the court of the powers conferred by this section is subject to the control of the court, and any creditor or contributory may apply to the court with respect to any exercise or proposed exercise of any of those powers.

Textual Amendments

F350 S. 167(1) substituted (26.5.2015) by Small Business, Enterprise and Employment Act 2015 (c. 26), ss. 120(3), 164(3)(i)(i)

Modifications etc. (not altering text)

C452 Ss. 163-167 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C460 S. 167 excluded (1.12.2001) by 2000 c. 8, s. 376(12); S.I. 2001/3538, art. 2(1)

S. 167 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C461 S. 167 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C462 S. 167 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C463 S. 167 applied (with modifications) (E.W.S.) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

C464 S. 167(1) modified (6.4.2017) by The Insolvent Partnerships Order 1994 (S.I. 1994/2421), Sch. 3 para. 8A(2) (as inserted by S.I. 2017/540, reg. 1, Sch. 2 para. 7(2) (with reg. 4))

168 Supplementary powers (England and Wales). E+W+S

(1) This section applies in the case of a company which is being wound up by the court in England and Wales.

[F351 (2) The liquidator may seek a decision on any matter from the company's creditors or contributories; and must seek a decision on a matter—

(a) from the company's creditors, if requested to do so by one-tenth in value of the creditors;

(b) from the company's contributories, if requested to do so by one-tenth in value of the contributories.]

(3) The liquidator may apply to the court (in the prescribed manner) for directions in relation to any particular matter arising in the winding up.

(4) Subject to the provisions of this Act, the liquidator shall use his own discretion in the management of the assets and their distribution among the creditors.

(5) If any person is aggrieved by an act or decision of the liquidator, that person may apply to the court; and the court may confirm, reverse or modify the act or decision complained of, and make such order in the case as it thinks just.

[F352 (5A) Where at any time after a winding-up petition has been presented to the court against any person (including an insolvent partnership or other body which may be wound up under Part V of the Act as an unregistered company), whether by virtue of the provisions of the M9 Insolvent Partnerships Order 1994 or not, the attention of the court is drawn to the fact that the person in question is a member of an insolvent partnership, the court may make an order as to the future conduct of the insolvency proceedings and any such order may apply any provisions of that Order with any necessary modifications.

(5B) Any order or directions under subsection (5A) may be made or given on the application of the official receiver, any responsible insolvency practitioner, the trustee of the partnership or any other interested person and may include provisions as to the administration of the joint estate of the partnership, and in particular how it and the separate estate of any member are to be administered.]

[F353 (5C) Where the court makes an order for the winding up of an insolvent partnership under—

(a) section 72(1)(a) of the Financial Services Act 1986;

(b) section 92(1)(a) of the Banking Act 1987; or

(c) section 367(3)(a) of the Financial Services and Markets Act 2000,

the court may make an order as to the future conduct of the winding up proceedings, and any such order may apply any provisions of the Insolvent Partnerships Order 1994 with any necessary modifications.]

Textual Amendments

F351 S. 168(2) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 41(2); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F352 S. 168(5A)(5B)(5C) inserted (1.12.1994) by S.I. 1994/2421, art. 14(1)

F353 S. 168(5C) substituted (3.7.2002) by S.I. 2002/1555, art. 15(2)

Modifications etc. (not altering text)

C465 S. 168 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2 (as amended (13.3.2018) by S.I. 2018/208, regs. 1(3), 5(3))

C466 S. 168 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C467 S. 168(1)-(3)(5) applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 8(3)(9), Sch. 4 Pt. II para. 20

C468 S. 168(2) modified (20.4.2003) by The Insurers (Reorganisation and Winding Up) Regulations 2003 (S.I. 2003/1102), reg. 29(2) (with reg. 3)

C469 S. 168(4) applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 145, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 3

C470 S. 168(4) applied (with modifications) (E.W.S.) 8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

Marginal Citations

M9 S.I. 1994/2421.

169 Supplementary powers (Scotland). E+W+S

(1) F354 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) In a winding up by the court in Scotland, the liquidator has (subject to the rules) the same powers as a trustee on a bankrupt estate.

Textual Amendments

F354 S. 169(1) omitted (26.5.2015) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), ss. 120(4), 164(3)(i)(i)

Modifications etc. (not altering text)

C471 S. 169 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C472 S. 169 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2 (as amended (7.4.2017) by The Deregulation Act 2015, the Small Business, Enterprise and Employment Act 2015 and the Insolvency (Amendment) Act (Northern Ireland) 2016 (Consequential Amendments and Transitional Provisions) Regulations 2017 (S.I. 2017/400), regs. 1(2), 5(4))

C473 S. 169 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C474 S. 169 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

170 Enforcement of liquidator’s duty to make returns, etc. E+W+S

(1) If a liquidator who has made any default—

(a) in filing, delivering or making any return, account or other document, or

(b) in giving any notice which he 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, the court has the following powers.

(2) On an application made by any creditor or contributory of the company, or by the registrar of companies, the court may make an order directing the liquidator to make good the default within such time as may be specified in the order.

(3) The court’s order may provide that all costs of and incidental to the application shall be borne by the liquidator.

(4) Nothing in this section prejudices the operation of any enactment imposing penalties on a liquidator in respect of any such default as is mentioned above.

Modifications etc. (not altering text)

C475 S. 170 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C476 S. 170 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C477 S. 170 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C478 S. 170 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C479 S. 170(2) 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 (as amended (28.6.2016) by The Building Societies (Floating Charges and Other Provisions) Order 2016 (S.I. 2016/679), arts. 1(1), 6)

Removal; vacation of office E+W+S

171 Removal, etc. (voluntary winding up). E+W+S

(1) This section applies with respect to the removal from office and vacation of office of the liquidator of a company which is being wound up voluntarily.

(2) Subject to the next subsection, the liquidator may be removed from office only by an order of the court or—

(a) in the case of a members’ voluntary winding up, by a general meeting of the company summoned specially for that puropose, or

(b) in the case of a creditors’ voluntary winding up, by a [F355 decision of the company's creditors made by a qualifying decision procedure instigated] specially for that purpose in accordance with the rules.

[F356 (3) Where the liquidator in a members' voluntary winding up was appointed by the court under section 108, a meeting such as is mentioned in subsection (2)(a) shall be summoned only if—

(a) the liquidator thinks fit,

(b) the court so directs, or

(c) the meeting is requested in accordance with the rules by members representing not less than one-half of the total voting rights of all the members having at the date of the request a right to vote at the meeting.

(3A) Where the liquidator in a creditors' voluntary winding up was appointed by the court under section 108, a qualifying decision procedure such as is mentioned in subsection (2)(b) is to be instigated only if—

(a) the liquidator thinks fit,

(b) the court so directs, or

(c) it is requested in accordance with the rules by not less than one-half in value of the company's creditors.]

(4) A liquidator shall vacate office if he ceases to be a person who is qualified to act as an insolvency practitioner in relation to the company.

(5) A liquidator may, in the prescribed circumstances, resign his office by giving notice of his resignation to the registrar of companies.

[F357 (6) In the case of a members' voluntary winding up where the liquidator has produced an account of the winding up under section 94 (final account), the liquidator vacates office as soon as the liquidator has complied with section 94(3) (requirement to send final account to registrar).

(7) In the case of a creditors' voluntary winding up where the liquidator has produced an account of the winding up under section 106 (final account), the liquidator vacates office as soon as the liquidator has complied with section 106(3) (requirement to send final account etc. to registrar).]

Textual Amendments

F355 Words in s. 171(2)(b) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 42(2); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F356 S. 171(3)(3A) substituted for s. 171(3) (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 42(3); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F357 S. 171(6)(7) substituted for s. 171(6) (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 42(4); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

Modifications etc. (not altering text)

C480 S. 171 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C481 S. 171 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C482 S. 171 modified (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(2), Sch. 3

C483 S. 171(5)(6) 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 (as amended (28.6.2016) by The Building Societies (Floating Charges and Other Provisions) Order 2016 (S.I. 2016/679), arts. 1(1), 6)

172 Removal, etc. (winding up by the court). E+W+S

(1) This section applies with respect to the removal from office and vacation of office of the liquidator of a company which is being wound up by the court, or of a provisional liquidator.

(2) Subject as follows, the liquidator may be removed from office only by an order of the court or by a [F358 decision of the company's creditors made by a qualifying decision procedure instigated] specially for that purpose in accordance with the rules; and a provisional liquidator may be removed from office only by an order of the court.

(3) Where—

(a) the official receiver is liquidator otherwise than in succession under section 136(3) to a person who held office as a result of a nomination by F359 ... the company’s creditors or contributories, or

(b) the liquidator was appointed by the court otherwise than under section 139(4)(a) or 140(1), or was appointed by the Secretary of State,

[F360 a qualifying decision procedure such as is mentioned in subsection (2) shall be instigated only if the liquidator thinks fit, the court so directs, or it] is requested, in accordance with the rules, by not less than one-quarter, in value, of the creditors.

(4) If appointed by the Secretary of State, the liquidator may be removed from office by a direction of the Secretary of State.

(5) A liquidator or provisional liquidator, not being the official receiver, shall vacate office if he ceases to be a person who is qualified to act as an insolvency practitioner in relation to the company.

(6) A liquidator may, in the prescribed circumstances, resign his office by giving notice of his resignation to the court.

(7) Where an order is made under section 204 (early dissolution in Scotland) for the dissolution of the company, the liquidator shall vacate office when the dissolution of the company takes effect in accordance with that section.

[F361 (8) Where the liquidator has produced an account of the winding up under section 146 (final account), the liquidator vacates office as soon as the liquidator has complied with section 146(4) (requirement to send account etc. to registrar and to court).]

[F362 (9) Subsection (10) applies where, immediately before a liquidator gives notice to the court and the registrar under subsection (8) (or, where the liquidator gives notice to the court and the registrar on different days, immediately before the liquidator gives the first of those notices), there are EU insolvency proceedings open in respect of the company in one or more other member States.

(10) The liquidator must send to the court and the registrar, with the notice, a statement—

(a) identifying those proceedings,

(b) identifying the member State liquidator appointed in each of those proceedings, and

(c) indicating, in relation to each of those member State liquidators, whether that member State liquidator consents to the company being dissolved.]

Textual Amendments

F358 Words in s. 172(2) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 43(2); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F359 Words in s. 172(3)(a) omitted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 43(3)(a); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F360 Words in s. 172(3) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 43(3)(b); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F361 S. 172(8) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 43(4); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F362 S. 172(9)(10) inserted (S.) (26.6.2017) by The Insolvency Amendment (EU 2015/848) Regulations 2017 (S.I. 2017/702), reg. 1, Sch. para. 57 (with regs. 3, 4) (which affecting provision is omitted (6.4.2019) by virtue of S.I. 2019/816, reg. 6(3))

Modifications etc. (not altering text)

C484 S. 172 applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 8(3)(9), Sch. 4 Pt. II para. 21

S. 172 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C485 S. 172 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C486 S. 172 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C487 S. 172 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2 (as amended (S.) (8.12.2017) by The Insolvency (Miscellaneous Amendments) Regulations 2017 (S.I. 2017/1119), reg. 1(1), Sch. 1 para. 57(3))

C488 S. 172 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C489 S. 172(8) amended (1.12.2001) by S.I. 2001/1228, arts. 1(2)(c)(3), 32(1); S.I. 2001/3538, art. 2(1)

Release of liquidator E+W+S

173 Release (voluntary winding up). E+W+S

(1) This section applies with respect to the release of the liquidator of a company which is being wound up voluntarily.

(2) A person who has ceased to be a liquidator shall have his release with effect from the following time, that is to say—

[F363 (a) in the following cases, the time at which notice is given to the registrar of companies in accordance with the rules that the person has ceased to hold office—

(i) the person has been removed from office by a general meeting of the company,

(ii) the person has been removed from office by a decision of the company's creditors and the company's creditors have not decided against his release,

(iii) the person has died;

(b) in the following cases, such time as the Secretary of State may, on the application of the person, determine—

(i) the person has been removed from office by a decision of the company's creditors and the company's creditors have decided against his release,

(ii) the person has been removed from office by the court,

(iii) the person has vacated office under section 171(4);]

(c) in the case of a person who has resigned, such time as may be prescribed;

(d) in the case of a person who has vacated office under subsection [F364 (6)] of section 171, the time at which he vacated office;

[F365 (e) in the case of a person who has vacated office under section 171(7)—

(i) if any of the company's creditors objected to the person's release before the end of the period for so objecting prescribed by the rules, such time as the Secretary of State may, on an application by that person, determine, and

(ii) otherwise, the time at which the person vacated office.]

[F366 (2A) Where the person is removed from office by a decision of the company's creditors, any decision of the company's creditors as to whether the person should have his release must be made by a qualifying decision procedure.]

(3) In the application of subsection (2) to the winding up of a company registered in Scotland, the references to a determination by the Secretary of State as to the time from which a person who has ceased to be liquidator shall have his release are to be read as references to such a determination by the Accountant of Court.

(4) Where a liquidator has his release under subsection (2), he is, with effect from the time specified in that subsection, discharged from all liability both in respect of acts or omissions of his in the winding up and otherwise in relation to his conduct as liquidator.

But nothing in this section prevents the exercise, in relation to a person who has had his release under subsection (2), of the court’s powers under section 212 of this Act (summary remedy against delinquent directors, liquidators, etc.).

Textual Amendments

F363 S. 173(2)(a)(b) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 44(2); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F364 Word in s. 173(2)(d) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 44(3); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F365 S. 173(2)(e) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 44(4); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F366 S. 173(2A) inserted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 44(5); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

Modifications etc. (not altering text)

C490 S. 173 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C491 S. 173(2)(a) 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 (as amended (28.6.2016) by The Building Societies (Floating Charges and Other Provisions) Order 2016 (S.I. 2016/679), arts. 1(1), 6)

C492 S. 173(2) modified (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(2), Sch. 3

S. 173 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

174 Release (winding up by the court). E+W+S

(1) This section applies with respect to the release of the liquidator of a company which is being wound up by the court, or of a provisional liquidator.

(2) Where the official receiver has ceased to be liquidator and a person becomes liquidator in his stead, the official receiver has his release with effect from the following time, that is to say—

(a) in a case where that person was nominated by [F367 the company's] creditors or contributories, or was appointed by the Secretary of State, the time at which the official receiver gives notice to the court that he has been replaced;

(b) in a case where that person is appointed by the court, such time as the court may determine.

(3) If the official receiver while he is a liquidator gives notice to the Secretary of State that the winding up is for practical purposes complete, he has his release with effect from such time as the Secretary of State may determine.

(4) A person other than the official receiver who has ceased to be a liquidator has his release with effect from the following time, that is to say—

[F368 (a) in the following cases, the time at which notice is given to the court in accordance with the rules that the person has ceased to hold office—

(i) the person has been removed from office by a decision of the company's creditors and the company's creditors have not decided against his release,

(ii) the person has died;

(b) in the following cases, such time as the Secretary of State may, on the application of the person, determine—

(i) the person has been removed from office by a decision of the company's creditors and the company's creditors have decided against his release;

(ii) the person has been removed from office by the court or the Secretary of State;

(iii) the person has vacated office under section 172(5) or (7);]

(c) in the case of a person who has resigned, such time as may be prescribed;

(d) in the case of a person who has vacated office under section 172(8)—

[F369 (i) if any of the company's creditors objected to the person's release before the end of the period for so objecting prescribed by the rules, such time as the Secretary of State may, on an application by that person, determine, and

(ii) otherwise, the time at which the person vacated office.]

[F370 (4ZA) Where the person is removed from office by a decision of the company's creditors, any decision of the company's creditors as to whether the person should have his release must be made by a qualifying decision procedure.]

[F371 (4A) Where a winding-up order made by the court in England and Wales is rescinded, the person (whether the official receiver or another person) who is the liquidator of the company at the time the order is rescinded has his release with effect from such time as the court may determine.]

(5) A person who has ceased to hold office as a provisional liquidator has his release with effect from such time as the court may, on an application by him, determine.

(6) Where the official receiver or a liquidator or provisional liquidator has his release under this section, he is, with effect from the time specified in the preceding provisions of this section, discharged from all liability both in respect of acts or omissions of his in the winding up and otherwise in relation to his conduct as liquidator or provisional liquidator.

But nothing in this section prevents the exercise, in relation to a person who has had his release under this section, of the court’s powers under section 212 (summary remedy against delinquent directors, liquidators, etc.).

(7) In the application of this section to a case where the order for winding up has been made by the court in Scotland, the references to a determination by the Secretary of State as to the time from which a person who has ceased to be liquidator has his release are to such a determination by the Accountant of Court.

Textual Amendments

F367 Words in s. 174(2)(a) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 45(2)(a); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F368 S. 174(4)(a)(b) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 45(3); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F369 S. 174(4)(d)(i)(ii) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 45(4); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F370 S. 174(4ZA) inserted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 45(5); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F371 S. 174(4A) inserted (1.10.2015) by Deregulation Act 2015 (c. 20), s. 115(7), Sch. 6 para. 10; S.I. 2015/1732, art. 2(e)(iii)

Modifications etc. (not altering text)

C493 S. 174 applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 8(3)(9), Sch. 4 Pt. II para. 22

S. 174 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C494 S. 174 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C495 S. 174 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

Chapter VIII U.K. Provisions of General Application in Winding Up

[F372 Moratorium: order of priority of payment of debts E+W+S

Textual Amendments

F372 S. 174A and cross-heading inserted (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 3 para. 13 (with ss. 2(2), 5(2))

174A Moratorium debts etc: priority E+W+S

(1) This section applies where proceedings for the winding up of a company are begun before the end of the period of 12 weeks beginning with the day after the end of any moratorium for the company under Part A1.

(2) In the winding up, the following are payable out of the company’s assets (in the order of priority shown) in preference to all other claims—

(a) any prescribed fees or expenses of the official receiver acting in any capacity in relation to the company;

(b) moratorium debts and priority pre-moratorium debts.

(3) In subsection (2)(b) “priority pre-moratorium debt” means—

(a) any pre-moratorium debt that is payable in respect of—

(i) the monitor’s remuneration or expenses,

(ii) goods or services supplied during the moratorium,

(iii) rent in respect of a period during the moratorium, or

(iv) wages or salary arising under a contract of employment, so far as relating to a period of employment before or during the moratorium,

(b) any pre-moratorium debt that—

(i) consists of a liability to make a redundancy payment, and

(ii) fell due before or during the moratorium, and

(c) any pre-moratorium debt that—

(i) arises under a contract or other instrument involving financial services,

(ii) fell due before or during the moratorium, and

(iii) is not relevant accelerated debt (see subsection (4)).

(4) For the purposes of subsection (3)(c)—

• “relevant accelerated debt” means any pre-moratorium debt that fell due during the relevant period by reason of the operation of, or the exercise of rights under, an acceleration or early termination clause in a contract or other instrument involving financial services;

• “the relevant period” means the period—

  (a)

  beginning with the day on which the statement under section A6(1)(e) is made, and

  (b)

  ending with the last day of the moratorium.

(5) The rules may make provision as to the order in which the debts mentioned in subsection (2)(b) rank among themselves in a case where the assets of the company are insufficient to meet them in full.

(6) The Secretary of State may by regulations made by statutory instrument amend this section for the purposes of changing the definition of “moratorium debt” or “priority pre-moratorium debt” in this section.

(7) Regulations under subsection (6) may make consequential, supplementary, incidental or transitional provision or savings.

(8) A statutory instrument containing regulations under subsection (6) may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.

(9) For the purposes of this section proceedings for the winding up of a company are begun when—

(a) a winding-up petition is presented, or

(b) a resolution for voluntary winding up is passed.

(10) Any rules made under section A18(4) (meaning of supply of goods or services) apply also for the purposes of subsection (3)(a)(ii) of this section.

(11) In this section—

• “acceleration or early termination clause”, in relation to a contract or other instrument involving financial services, means a provision of the contract or other instrument—

  (a)

  under which, on the happening of an event—

  (i)

  a debt or other liability falls due earlier than it otherwise would, or

  (ii)

  a debt or other liability is terminated and replaced by another debt or liability, or

  (b)

  which confers on a party a right which, if exercised, will result in —

  (i)

  a debt or other liability falling due earlier than it otherwise would, or

  (ii)

  a debt or other liability being terminated and replaced by another debt or liability;

• “contract or other instrument involving financial services” has the same meaning as it has for the purposes of section A18 (see Schedule ZA2);

• “monitor’s remuneration or expenses” has the meaning given by section A18;

• “moratorium debt” has the meaning given by section A53;

• “pre-moratorium debt” has the meaning given by section A53;

• “redundancy payment” has the meaning given by section A18;

• “wages or salary” has the meaning given by section A18.]

Preferential debts E+W+S

175 Preferential debts (general provision). E+W+S

(1) In a winding up the company’s preferential debts F373 ... shall be paid in priority to all other debts [F374 after the payment of—

(a) any liabilities to which section 174A applies, and

(b) expenses of the winding up.]

[F375 (1A) Ordinary preferential debts rank equally among themselves F376 ... and shall be paid in full, unless the assets are insufficient to meet them, in which case they abate in equal proportions.

(1B) Secondary preferential debts rank equally among themselves after the ordinary preferential debts and shall be paid in full, unless the assets are insufficient to meet them, in which case they abate in equal proportions.]

(2) Preferential debts—

F377 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) so far as the assets of the company available for payment of general creditors are insufficient to meet them, have priority over the claims of holders of debentures secured by, or holders of, any floating charge created by the company, and shall be paid accordingly out of any property comprised in or subject to that charge.

[F378 (3) In this section “preferential debts”, “ordinary preferential debts” and “secondary preferential debts” each has the meaning given in section 386 in Part 12.]

Textual Amendments

F373 Words in s. 175(1) omitted (1.1.2015) by virtue of The Banks and Building Societies (Depositor Preference and Priorities) Order 2014 (S.I. 2014/3486), arts. 1(2), 5(2) (with art. 3)

F374 S. 175(1)(a)(b) and words inserted (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 3 para. 14(2) (with ss. 2(2), 5(2))

F375 S. 175(1A)(1B) inserted (1.1.2015) by The Banks and Building Societies (Depositor Preference and Priorities) Order 2014 (S.I. 2014/3486), arts. 1(2), 5(3) (with art. 3)

F376 Words in s. 175(1A) omitted (26.6.2020) by virtue of Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 3 para. 14(3) (with ss. 2(2), 5(2))

F377 S. 175(2)(a) omitted (1.1.2015) by virtue of The Banks and Building Societies (Depositor Preference and Priorities) Order 2014 (S.I. 2014/3486), arts. 1(2), 5(4) (with art. 3)

F378 S. 175(3) inserted (1.1.2015) by The Banks and Building Societies (Depositor Preference and Priorities) Order 2014 (S.I. 2014/3486), arts. 1(2), 5(5) (with art. 3)

Modifications etc. (not altering text)

C496 S. 175 excluded (6.3.2008) by The Regulated Covered Bonds Regulations 2008 (S.I. 2008/346), reg. 46, Sch. para. 2(4)

C497 S. 175 applied (with modifications) (11.12.1999) by The Financial Market and Insolvency (Settlement Finality) Regulations 1999 (S.I. 1999/2979), reg. 14(5)(a)(i) (as substituted (1.10.2009) by The Financial Markets and Insolvency (Settlement Finality) (Amendment) Regulations 2009 (S.I. 2009/1972), reg. 4(d)(ii))

C498 S. 175 excluded (20.4.2003) by The Insurers (Reorganisation and Winding Up) Regulations 2003 (S.I. 2003/1102), reg. 20 (with reg. 3)

S. 175 excluded (18.2.2004) by The Insurers (Reorganisation and Winding Up) Regulations 2004 (S.I. 2004/353), reg. 20 (with reg. 3) (as modified (10.8.2005) by S.I. 2005/1998, regs. 2(3), 40(1)-(5))

C499 S. 175 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C500 S. 175 excluded by S.I. 2003/3226, reg. 10(2A) (as inserted (6.4.2011) by The Financial Markets and Insolvency (Settlement Finality and Financial Collateral Arrangements) (Amendment) Regulations 2010 (S.I. 2010/2993), reg. 4(8)(a))

C501 S. 175 applied (20.4.2003) by The Insurers (Reorganisation and Winding Up) Regulations 2003 (S.I. 2003/1102), reg. 27(2) (with reg. 3)

C502 S. 175 applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 8(3)(9), Sch. 4 Pt. II para. 23 (as amended (E.W.) (8.12.2017) by The Insolvency (Miscellaneous Amendments) Regulations 2017 (S.I. 2017/1119), reg. 1(1), Sch. 2 para. 5; and (19.12.2018) by The Banks and Building Societies (Priorities on Insolvency) Order 2018 (S.I. 2018/1244), arts. 1(2), 20 (with art. 3); and (28.12.2020) (temp.) by The Bank Recovery and Resolution (Amendment) (EU Exit) Regulations 2020 (S.I. 2020/1350), regs. 1(4), 121(4))

176 Preferential charge on goods distrained [F379 , etc]. E+W+S

(1) This section applies where a company is being wound up by the court in England and Wales, and is without prejudice to section 128 (avoidance of attachments, etc.).

[F380 (2) Subsection (2A) applies where—

(a) any person (whether or not a landlord or person entitled to rent) has distrained upon the goods or effects of the company, or

(b) Her Majesty's Revenue and Customs has been paid any amount from an account of the company under Part 1 of Schedule 8 to the Finance (No. 2) Act 2015 (enforcement by deduction from accounts),

in the period of 3 months ending with the date of the winding-up order.

(2A) Where this subsection applies—

(a) in a case within subsection (2)(a), the goods or effects, or the proceeds of their sale, and

(b) in a case within subsection (2)(b), the amount in question,

is charged for the benefit of the company with the preferential debts of the company to the extent that the company's property is for the time being insufficient for meeting those debts.]

(3) Where by virtue of a charge under subsection [F381 (2A)] any person surrenders any goods or effects to a company or makes a payment to a company, that person ranks, in respect of the amount of the proceeds of sale of those goods or effects by the liquidator or (as the case may be) the amount of the payment, as a preferential creditor of the company, except as against so much of the company’s property as is available for the payment of preferential creditors by virtue of the surrender or payment.

Textual Amendments

F379 Word in s. 176 heading inserted (18.11.2015) by Finance (No. 2) Act 2015 (c. 33), Sch. 8 para. 30(4)

F380 S. 176(2)(2A) substituted for s. 176(2) (18.11.2015) by Finance (No. 2) Act 2015 (c. 33), Sch. 8 para. 30(2)

F381 Word in s. 176(3) substituted (18.11.2015) by Finance (No. 2) Act 2015 (c. 33), Sch. 8 para. 30(3)

Modifications etc. (not altering text)

C503 S. 176 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C504 S. 176 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

[F382 Non-preferential debts U.K.

Textual Amendments

F382 S. 176AZA and cross-heading inserted (19.12.2018) by The Banks and Building Societies (Priorities on Insolvency) Order 2018 (S.I. 2018/1244), arts. 1(2), 6 (with art. 3)

176AZA. Non-preferential debts of financial institutions U.K.

(1) This section applies in the winding up of a company which is a relevant financial institution.

(2) The company’s ordinary non-preferential debts shall be paid in priority to its secondary non-preferential debts.

(3) The company’s secondary non-preferential debts—

(a) shall be paid in priority to its tertiary non-preferential debts, and

(b) rank equally among themselves after the ordinary non-preferential debts and shall be paid in full, unless the assets are insufficient to meet them, in which case they abate in equal proportions.

(4) See section 387A for definitions relevant to this section.]

Modifications etc. (not altering text)

C505 S. 176AZA applied (with modifications) (19.12.2018) by The Banks and Building Societies (Priorities on Insolvency) Order 2018 (S.I. 2018/1244), arts. 1(2), 14(1) (with art. 3)

C506 S. 176AZA applied (with modifications) (19.12.2018) by The Banks and Building Societies (Priorities on Insolvency) Order 2018 (S.I. 2018/1244), arts. 1(2), 16 (with art. 3)

C507 S. 176AZA applied (with modifications) (19.12.2018) by The Banks and Building Societies (Priorities on Insolvency) Order 2018 (S.I. 2018/1244), arts. 1(2), 17 (with art. 3)

C508 S. 176AZA modified (28.12.2020 until IP completion day when the amending provision ceases to have effect in accordance with reg. 1(4) of the amending S.I.) by The Bank Recovery and Resolution (Amendment) (EU Exit) Regulations 2020 (S.I. 2020/1350), regs. 1(4), 111 (with reg. 108)

[F383 Property subject to floating charge] E+W+S

Textual Amendments

F383 S. 176A and preceding cross-heading inserted (15.9.2003) by 2002 c. 40, ss. 252, 279 (with s. 249(6)); S.I. 2003/2093, art. 2(1), Sch. 1 (subject to arts. 3-8 (as amended by S.I. 2002/2332, art. 2))

[F384 176ZA [F384 Payment of expenses of winding up (England and Wales)] E+W+S

(1) The expenses of winding up in England and Wales, so far as the assets of the company available for payment of general creditors are insufficient to meet them, have priority over any claims to property comprised in or subject to any floating charge created by the company and shall be paid out of any such property accordingly.

(2) In subsection (1)—

(a) the reference to assets of the company available for payment of general creditors does not include any amount made available under section 176A(2)(a);

(b) the reference to claims to property comprised in or subject to a floating charge is to the claims of—

(i) the holders of debentures secured by, or holders of, the floating charge, and

(ii) any preferential creditors entitled to be paid out of that property in priority to them.

(3) Provision may be made by rules restricting the application of subsection (1), in such circumstances as may be prescribed, to expenses authorised or approved—

(a) by the holders of debentures secured by, or holders of, the floating charge and by any preferential creditors entitled to be paid in priority to them, or

(b) by the court.

(4) References in this section to the expenses of the winding up are to all expenses properly incurred in the winding up, including the remuneration of the liquidator.]

Textual Amendments

F384 S. 176ZA inserted (20.1.2007 for specified purposes, otherwise 6.4.2008) by Companies Act 2006 (c. 46), ss. 1282(1), 1300(2); S.I. 2006/3428, art. 3(3) (subject to art. 5, Sch. 1 and with arts. 6, 8, Sch. 5); S.I. 2007/3495, arts. 2(2), 3(1)(v) (with Sch. 4 para. 43)

Modifications etc. (not altering text)

C509 S. 176ZA applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C510 S. 176ZA applied by S.I. 1999/2979 reg. 14(5)(a)(i) (as substituted (1.10.2009) by The Financial Markets and Insolvency (Settlement Finality) (Amendment) Regulations 2009 (S.I. 2009/1972), reg. 4(d)(ii))

C511 S. 176ZA excluded by S.I. 2003/3226, reg. 10(2B) (as inserted (6.4.2011) by The Financial Markets and Insolvency (Settlement Finality and Financial Collateral Arrangements) (Amendment) Regulations 2010 (S.I. 2010/2993), reg. 4(8)(a))

[F385 176ZB Application of proceeds of office-holder claims E+W+S

(1) This section applies where—

(a) there is a floating charge (whether created before or after the coming into force of this section) which relates to property of a company which—

(i) is in administration, or

(ii) has gone into liquidation; and

(b) the administrator or the liquidator (referred to in this section as “the office-holder”) has—

(i) brought a claim under any provision mentioned in subsection (3), or

(ii) made an assignment (or, in Scotland, assignation) in relation to a right of action under any such provision under section 246ZD.

(2) The proceeds of the claim or assignment (or, in Scotland, assignation) are not to be treated as part of the company's net property, that is to say the amount of its property which would be available for satisfaction of claims of holders of debentures secured by, or holders of, any floating charge created by the company.

(3) The provisions are—

(a) section 213 or 246ZA (fraudulent trading);

(b) section 214 or 246ZB (wrongful trading);

(c) section 238 (transactions at an undervalue (England and Wales));

(d) section 239 (preferences (England and Wales));

(e) section 242 (gratuitous alienations (Scotland));

(f) section 243 (unfair preferences (Scotland));

(g) section 244 (extortionate credit transactions).

(4) Subsection (2) does not apply to a company if or in so far as it is disapplied by—

(a) a voluntary arrangement in respect of the company, or

(b) a compromise or arrangement agreed under Part 26 [F386 or 26A] of the Companies Act 2006 (arrangements and reconstructions).]

Textual Amendments

F385 S. 176ZB inserted (1.10.2015) by Small Business, Enterprise and Employment Act 2015 (c. 26), ss. 119, 164(1); S.I. 2015/1689, reg. 2(j) (with Sch. para. 17)

F386 Words in s. 176ZB(4)(b) inserted (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 9 para. 6(2) (with ss. 2(2), 5(2))

Modifications etc. (not altering text)

C512 S. 176ZB applied (with modifications) by S.I. 2014/229, art. 2A (as inserted (7.4.2017) by The Deregulation Act 2015, the Small Business, Enterprise and Employment Act 2015 and the Insolvency (Amendment) Act (Northern Ireland) 2016 (Consequential Amendments and Transitional Provisions) Regulations 2017 (S.I. 2017/400), regs. 1(2), 12(2))

C513 S. 176ZB applied (with modifications) by 2009 c. 1, s. 103 (as amended (7.4.2017) by The Deregulation Act 2015, the Small Business, Enterprise and Employment Act 2015 and the Insolvency (Amendment) Act (Northern Ireland) 2016 (Consequential Amendments and Transitional Provisions) Regulations 2017 (S.I. 2017/400), regs. 1(2), 5(4))

C514 S. 176ZB applied (with modifications) by 2009 c. 1, s. 145 Table 2 (as amended (7.4.2017) by The Deregulation Act 2015, the Small Business, Enterprise and Employment Act 2015 and the Insolvency (Amendment) Act (Northern Ireland) 2016 (Consequential Amendments and Transitional Provisions) Regulations 2017 (S.I. 2017/400), regs. 1(2), 5(10))

C515 S. 176ZB applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

[F387 176A Share of assets for unsecured creditors E+W+S

(1) This section applies where a floating charge relates to property of a company—

(a) which has gone into liquidation,

(b) which is in administration,

(c) of which there is a provisional liquidator, or

(d) of which there is a receiver.

(2) The liquidator, administrator or receiver—

(a) shall make a prescribed part of the company’s net property available for the satisfaction of unsecured debts, and

(b) shall not distribute that part to the proprietor of a floating charge except in so far as it exceeds the amount required for the satisfaction of unsecured debts.

(3) Subsection (2) shall not apply to a company if—

(a) the company’s net property is less than the prescribed minimum, and

(b) the liquidator, administrator or receiver thinks that the cost of making a distribution to unsecured creditors would be disproportionate to the benefits.

(4) Subsection (2) shall also not apply to a company if or in so far as it is disapplied by—

(a) a voluntary arrangement in respect of the company, or

(b) a compromise or arrangement agreed under [F388 Part 26 [F389 or 26A] of the Companies Act 2006 (arrangements and reconstructions)].

(5) Subsection (2) shall also not apply to a company if—

(a) the liquidator, administrator or receiver applies to the court for an order under this subsection on the ground that the cost of making a distribution to unsecured creditors would be disproportionate to the benefits, and

(b) the court orders that subsection (2) shall not apply.

(6) In subsections (2) and (3) a company’s net property is the amount of its property which would, but for this section, be available for satisfaction of claims of holders of debentures secured by, or holders of, any floating charge created by the company.

(7) An order under subsection (2) prescribing part of a company’s net property may, in particular, provide for its calculation—

(a) as a percentage of the company’s net property, or

(b) as an aggregate of different percentages of different parts of the company’s net property.

(8) An order under this section—

(a) must be made by statutory instrument, and

(b) shall be subject to annulment pursuant to a resolution of either House of Parliament.

(9) In this section—

• “floating charge” means a charge which is a floating charge on its creation and which is created after the first order under subsection (2)(a) comes into force, and

• “prescribed” means prescribed by order by the Secretary of State.

(10) An order under this section may include transitional or incidental provision.]

Textual Amendments

F387 S. 176A and preceding cross-heading inserted (15.9.2003) by 2002 c. 40, ss. 252, 279 (with s. 249(6)); S.I. 2003/2093, art. 2(1), Sch. 1 (subject to arts. 3-8 (as amended by S.I. 2002/2332, art. 2))

F388 Words in s. 176A(4)(b) substituted (6.4.2008) by The Companies Act 2006 (Consequential Amendments etc) Order 2008 (S.I. 2008/948), art. 3(1), Sch. 1 para. 103 (with arts. 6, 11, 12)

F389 Words in s. 176A(4)(b) inserted (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 9 para. 6(3) (with ss. 2(2), 5(2))

Modifications etc. (not altering text)

C516 S. 176A excluded (6.3.2008) by The Regulated Covered Bonds Regulations 2008 (S.I. 2008/346), reg. 46, Sch. para. 2(4)

C517 S. 176A excluded (26.12.2003) by The Financial Collateral Arrangements (No.2) Regulations 2003 (S.I. 2003/3226), reg. 10(3)

C518 S. 176A modified (18.2.2004) by The Insurers (Reorganisation and Winding Up) Regulations 2004 (S.I. 2004/353), reg. 21(7) (with reg. 3) (as modified (10.8.2005) by S.I. 2005/1998, regs. 2(3), 40(1)-(4))

C519 S. 176A applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C520 S. 176A applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 145, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 3

C521 S. 176A applied by S.I. 1999/2979 reg. 14(5)(a)(i) (as substituted (1.10.2009) by The Financial Markets and Insolvency (Settlement Finality) (Amendment) Regulations 2009 (S.I. 2009/1972), reg. 4(d)(ii))

C522 S. 176A applied (with modifications) (6.4.2014) by The Industrial and Provident Societies and Credit Unions (Arrangements, Reconstructions and Administration) Order 2014 (S.I. 2014/229), arts. 1, 3

C523 S. 176A applied (with modifications) (E.W.S.) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

Special managers E+W+S

177 Power to appoint special manager. E+W+S

(1) Where a company has gone into liquidation or a provisional liquidator has been appointed, the court may, on an application under this section, appoint any person to be the special manager of the business or property of the company.

(2) The application may be made by the liquidator or provisional liquidator in any case where it appears to him that the nature of the business or property of the company, or the interests of the company’s creditors or contributories or members generally, require the appointment of another to manage the company’s business or property.

(3) The special manager has such powers as may be entrusted to him by the court.

(4) The court’s power to entrust powers to the special manager includes power to direct that any provision of this Act that has effect in relation to the provisional liquidator or liquidator of a company shall have the like effect in relation to the special manager for the purposes of the carrying out by him of any of the functions of the provisional liquidator or liquidator.

(5) The special manager shall—

(a) give such security or, in Scotland, caution, as may be prescribed;

(b) prepare and keep such accounts as may be prescribed; and

(c) produce those accounts in accordance with the rules to the Secretary of State or to such other persons as may be prescribed.

Modifications etc. (not altering text)

C524 S. 177 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C525 S. 177 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C526 S. 177 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C527 S. 177(5) applied (1.2.1993) by Friendly Societies Act 1992 (c. 40), s. 24(4) (with ss. 7(5), 93(4)); S.I. 1993/16, art. 2, Sch.3

S. 177(5) applied (1.12.2001) by 2000 c. 8, s. 376(7); S.I. 2001/3538, art. 2(1)

Disclaimer (England and Wales only) E+W+S

178 Power to disclaim onerous property. E+W+S

(1) This and the next two sections apply to a company that is being wound up in England and Wales.

(2) Subject as follows, the liquidator may, by the giving of the prescribed notice, disclaim any onerous property and may do so notwithstanding that he has taken possession of it, endeavoured to sell it, or otherwise exercised rights of ownership in relation to it.

(3) The following is onerous property for the purposes of this section—

(a) any unprofitable contract, and

(b) any other property of the company which is unsaleable or not readily saleable or is such that it may give rise to a liability to pay money or perform any other onerous act.

(4) A disclaimer under this section—

(a) operates so as to determine, as from the date of the disclaimer, the rights, interests and liabilities of the company in or in respect of the property disclaimed; but

(b) does not, except so far as is necessary for the purpose of releasing the company from any liability, affect the rights or liabilities of any other person.

(5) A notice of disclaimer shall not be given under this section in respect of any property if—

(a) a person interested in the property has applied in writing to the liquidator or one of his predecessors as liquidator requiring the liquidator or that predecessor to decide whether he will disclaim or not, and

(b) the period of 28 days beginning with the day on which that application was made, or such longer period as the court may allow, has expired without a notice of disclaimer having been given under this section in respect of that property.

(6) Any person sustaining loss or damage in consequence of the operation of a disclaimer under this section is deemed a creditor of the company to the extent of the loss or damage and accordingly may prove for the loss or damage in the winding up.

Modifications etc. (not altering text)

C528 S. 178 excluded (25.4.1991) by Companies Act 1989 (c. 40), ss. 154, 155, 164(1), 182(4), Sch. 22 para. 7(1); S.I. 1991/878, art. 2, Sch.

S. 178 excluded (11.12.1999) by S.I. 1999/2979, reg. 16(1)

S. 178 excluded (26.12.2003) by The Financial Collateral Arrangements (No. 2) Regulations 2003 (S.I. 2003/3226), reg. 10(4)

C529 S. 178 restricted (1.1.1996) by 1995 c. 30, s. 21(2)(b) (with ss. 1(1), 2(2), 26(1)); S.I. 1995/2963, art. 2

C530 S. 178 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C531 S. 178 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 145, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 3

C532 S. 178 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C533 S. 178 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

C534 S. 178(2) excluded by 2009 c. 1, s. 66(3A) (as inserted (1.1.2015) by The Bank Recovery and Resolution Order 2014 (S.I. 2014/3329), arts. 1(2), 74(5))

C535 S. 178(2) excluded by 2009 c. 1, s. 67(6) (as substituted (1.1.2015) by The Bank Recovery and Resolution Order 2014 (S.I. 2014/3329), arts. 1(2), 75(3))

C536 S. 178(2) excluded by 2009 c. 1, s. 63(3A) (as inserted (1.1.2015) by The Bank Recovery and Resolution Order 2014 (S.I. 2014/3329), arts. 1(2), 71(4))

C537 S. 178(2) excluded (31.12.2023) by Financial Services and Markets Act 2023 (c. 29), s. 86(3), Sch. 11 paras. 92(5), 93(5); S.I. 2023/1382, reg. 8(b)

179 Disclaimer of leaseholds. E+W+S

(1) The disclaimer under section 178 of any property of a leasehold nature does not take effect unless a copy of the disclaimer has been served (so far as the liquidator is aware of their addresses) on every person claiming under the company as underlessee or mortgagee and either—

(a) no application under section 181 below is made with respect to that property before the end of the period of 14 days beginning with the day on which the last notice served under this subsection was served; or

(b) where such an application has been made, the court directs that the disclaimer shall take effect.

(2) Where the court gives a direction under subsection (1)(b) it may also, instead of or in addition to any order it makes under section 181, make such orders with respect to fixtures, tenant’s improvements and other matters arising out of the lease as it thinks fit.

Modifications etc. (not altering text)

C538 S. 179 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C539 S. 179 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 145, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 3

C540 S. 179 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C541 S. 179 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

180 Land subject to rentcharge. E+W+S

(1) The following applies where, in consequence of the disclaimer under section 178 of any land subject to a rentcharge, that land vests by operation of law in the Crown or any other person (referred to in the next subsection as “the proprietor”).

(2) The proprietor and the successors in title of the proprietor are not subject to any personal liability in respect of any sums becoming due under the rentcharge except sums becoming due after the proprietor, or some person claiming under or through the proprietor, has taken possession or control of the land or has entered into occupation of it.

Modifications etc. (not altering text)

C542 S. 180 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C543 S. 180 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 145, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 3

C544 S. 180 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C545 S. 180 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

181 Powers of court (general). E+W+S

(1) This section and the next apply where the liquidator has disclaimed property under section 178.

(2) An application under this section may be made to the court by—

(a) any person who claims an interest in the disclaimed property, or

(b) any person who is under any liability in respect of the disclaimed property, not being a liability discharged by the disclaimer.

(3) Subject as follows, the court may on the application make an order, on such terms as it thinks fit, for the vesting of the disclaimed property in, or for its delivery to—

(a) a person entitled to it or a trustee for such a person, or

(b) a person subject to such a liability as is mentioned in subsection (2)(b) or a trustee for such a person.

(4) The court shall not make an order under subsection (3)(b) except where it appears to the court that it would be just to do so for the purpose of compensating the person subject to the liability in respect of the disclaimer.

(5) The effect of any order under this section shall be taken into account in assessing for the purpose of section 178(6) the extent of any loss or damage sustained by any person in consequence of the disclaimer.

(6) An order under this section vesting property in any person need not be completed by conveyance, assignment or transfer.

Modifications etc. (not altering text)

C546 S. 181 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C547 S. 181 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 145, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C548 S. 181 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C549 S. 181 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

182 Powers of court (leaseholds). E+W+S

(1) The court shall not make an order under section 181 vesting property of a leasehold nature in any person claiming under the company as underlessee or mortgagee except on terms making that person—

(a) subject to the same liabilities and obligations as the company was subject to under the lease at the commencement of the winding up, or

(b) if the court thinks fit, subject to the same liabilities and obligations as that person would be subject to if the lease had been assigned to him at the commencement of the winding up.

(2) For the purposes of an order under section 181 relating to only part of any property comprised in a lease, the requirements of subsection (1) apply as if the lease comprised only the property to which the order relates.

(3) Where subsection (1) applies and no person claiming under the company as underlessee or mortgagee is willing to accept an order under section 181 on the terms required by virtue of that subsection, the court may, by order under that section, vest the company’s estate or interest in the property in any person who is liable (whether personally or in a representative capacity, and whether alone or jointly with the company) to perform the lessee’s covenants in the lease.

The court may vest that estate and interest in such a person freed and discharged from all estates, incumbrances and interests created by the company.

(4) Where subsection (1) applies and a person claiming under the company as underlessee or mortgagee declines to accept an order under section 181, that person is excluded from all interest in the property.

Modifications etc. (not altering text)

C550 S. 182 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C551 S. 182 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 145, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 3

C552 S. 182 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C553 S. 182 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

Execution, attachment and the Scottish equivalents E+W+S

183 Effect of execution or attachment (England and Wales). E+W+S

(1) Where a creditor has issued execution against the goods or land of a company or has attached any debt due to it, and the company is subsequently wound up, he is not entitled to retain the beneift of the execution or attachment against the liquidator unless he has completed the execution or attachment before the commencement of the winding up.

(2) However—

(a) if a creditor has had notice of a meeting having been called at which a resolution for voluntary winding up is to be proposed, the date on which he had notice is substituted, for the purpose of subsection (1), for the date of commencement of the winding up;

(b) a person who purchases in good faith under a sale by the [F390 enforcement officer or other officer charged with the execution of the writ] any goods of a company on which execution has been levied in all cases acquires a good title to them against the liquidator; and

(c) the rights conferred by subsection (1) on the liquidator may be set aside by the court in favour of the creditor to such extent and subject to such terms as the court thinks fit.

(3) For purposes of this Act—

(a) an execution against goods is completed by seizure and sale, or by making of a charging order under section 1 of the M10 Charging Orders Act 1979;

(b) an attachment of a debt is completed by receipt of the debt; and

(c) an execution against land is completed by seizure, by the appointment of a receiver, or by the making of a charging order under section 1 of the Act above-mentioned.

(4) In this section “goods” includes all chattels personal; and [F391 “enforcement officer” means an individual who is authorised to act as an enforcement officer under the Courts Act2003].

[F392 (4A) For the purposes of this section, Her Majesty's Revenue and Customs is to be regarded as having attached a debt due to a company if it has taken action under Part 1 of Schedule 8 to the Finance (No. 2) Act 2015 (enforcement by deduction for accounts) as a result of which an amount standing to the credit of an account held by the company is—

(a) subject to arrangements made under paragraph 6(3) of that Schedule, or

(b) the subject of a deduction notice under paragraph 13 of that Schedule.]

(5) This section does not apply in the case of a winding up in Scotland.

Textual Amendments

F390 Words in s. 183(2)(b) substituted (15.3.2004) by Courts Act 2003 (c. 39), ss. 109(1), 110, Sch. 8 para. 295(2); S.I. 2004/401, art. 2 (with art. 3)

F391 Words in s. 183(4) substituted (15.3.2004) by Courts Act 2003 (c. 39), ss. 109(1), 110, Sch. 8 para. 295(3); S.I. 2004/401, art. 2 (with art. 3)

F392 S. 183(4A) inserted (18.11.2015) by Finance (No. 2) Act 2015 (c. 33), Sch. 8 para. 31

Modifications etc. (not altering text)

C554 S. 183 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C555 S. 183 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37, Sch. 1 para. 3 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

Marginal Citations

M10 1979 c. 53.

184 Duties of [F393 officers charged with execution of writs and other processes] (England and Wales). E+W+S

(1) The following applies where a company’s goods are taken in execution and, before their sale or the completion of the execution (by the receipt or recovery of the full amount of the levy), notice is served on the [F394 enforcement officer, or other officer, charged with execution of the writ or other process,] that a provisional liquidator has been appointed or that a winding-up order has been made, or that a resolution for voluntary winding up has been passed.

(2) The [F395 enforcement officer or other officer] shall, on being so required, deliver the goods and any money seized or received in part satisfaction of the execution to the liquidator; but the costs of execution are a first charge on the goods or money so delivered, and the liquidator may sell the goods, or a sufficient part of them for the purpose of satisfying the charge.

(3) If under an execution in respect of a judgement for a sum exceeding [F396 £500] a company’s goods are sold or money is paid in order to avoid sale, the [F397 enforcement officer or other officer] shall deduct the costs of the execution from the proceeds of sale or the money paid and retain the balance for 14 days.

(4) If within that time notice is served on the [F397 enforcement officer or other officer] of a petition for the winding up of the company having been presented, or of a meeting having been called at which there is to be proposed a resolution for voluntary winding up, and an order is made or a resolution passed (as the case may be), the [F397 enforcement officer or other officer] shall pay the balance to the liquidator, who is entitled to retain it as against the execution creditor.

(5) The rights conferred by this section on the liquidator may be set aside by the court in favour of the creditor to such extent and subject to such terms as the court thinks fit.

(6) In this section, “goods” includes all chattels personal; and [F398 “enforcement officer” means an individual who is authorised to act as an enforcement officer under the Courts Act 2003.]

(7) 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.

(8) This section does not apply in the case of a winding up in Scotland.

Textual Amendments

F393 Words in s. 184 heading substituted (15.3.2004) by Courts Act 2003 (c. 39), ss. 109(1), 110, Sch. 8 para. 296(5); S.I. 2004/401, art. 2 (with art. 3)

F394 Words in s. 184(1) substituted (15.3.2004) by Courts Act 2003 (c. 39), ss. 109(1), 110, Sch. 8 para. 296(2); S.I. 2004/401, art. 2 (with art. 3)

F395 Words in s. 184(2) substituted (15.3.2004) by Courts Act 2003 (c. 39), ss. 109(1), 110, Sch. 8 para. 296(3); S.I. 2004/401, art. 2 (with art. 3)

F396 "£500" substituted by virtue of S.I. 1986/1996, art. 2(1), Sch. Pt. I (by art. 2(2) of that S.I. the new amount is not to affect any case where the goods are sold or payment to avoid sale is made, before the coming into force of the increase)

F397 Words in s. 184(3)(4) substituted (15.3.2004) by Courts Act 2003 (c. 39), ss. 109(1), 110, Sch. 8 para. 296(3); S.I. 2004/401, art. 2 (with art. 3)

F398 Words in s. 184(6) substituted (15.3.2004) by Courts Act 2003 (c. 39), ss. 109(1), 110, Sch. 8 para. 296(4); S.I. 2004/401, art. 2 (with art. 3)

Modifications etc. (not altering text)

C556 S. 184 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C557 S. 184 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

185 Effect of diligence (Scotland) E+W+S

(1) In the winding up of a company registered in Scotland, the following provisions of the Bankruptcy (Scotland) Act [F399 2016—

(a) subsections (3) to (10) of section 23A (effect of sequestration on land attachment) and section 24 (effect of sequestration on diligence generally); and

(b) subsections (6), (7), (10) and (11) of section 109 (management and realisation of estate),]

apply so far as consistent with this Act, in like manner as they apply in the sequestration of a debtor’s estate, with the substitutions specified below and with any other necessary modifications.

(2) The substitutions to be made in those sections of the Act of [F400 2016] are as follows—

(a) for references to the debtor, substitute references to the company;

(b) for references to the sequestration, substitute references to the winding up;

(c) for references to the date of sequestration, substitute references to the commencement of the winding up of the company; and

(d) for references to the [F401 permanent] trustee, substitute references to the liquidator.

(3) In this section, “the commencement of the winding up of the company” means, where it is being wound up by the court, the day on which the winding-up order is made.

(4) This section, so far as relating to any estate or effects of the company situated in Scotland, applies in the case of a company registered in England and Wales as in the case of one registered in Scotland.

Textual Amendments

F399 Words in s. 185(1) substituted (30.11.2016) by The Bankruptcy (Scotland) Act 2016 (Consequential Provisions and Modifications) Order 2016 (S.I. 2016/1034), art. 1, Sch. 1 para. 4(3)(a)

F400 Word in s. 185(2) substituted (30.11.2016) by The Bankruptcy (Scotland) Act 2016 (Consequential Provisions and Modifications) Order 2016 (S.I. 2016/1034), art. 1, Sch. 1 para. 4(3)(b)

F401 Word in s. 185(2)(d) repealed (S.) (1.4.2008) by Bankruptcy and Diligence etc. (Scotland) Act 2007 (asp 3), ss. 226(2), 227(3), Sch. 6 (with s. 223); S.S.I. 2008/115, art. 3(2), Sch. 2 (subject to art. 3(3)) (with arts. 5, 6, 10) (as amended by S.S.I. 2011/31, art. 5)

Modifications etc. (not altering text)

C558 S. 185 excluded (25.4.1991) by Companies Act 1989 (c. 40), ss. 154, 155, 161(4); S.I. 1991/878, art. 2, Sch. .

S. 185 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C559 S. 185 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C560 S. 185 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

C561 Ss. 185-189 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C562 S. 185(1)(a)(2) applied by Administration of Justice Act 1956 (c. 46), s. 47G(3) (as substituted (S.) (30.11.2016) by Bankruptcy (Scotland) Act 2016 (asp 21), s. 237(2), Sch. 8 para. 4 (with ss. 232, 234(3), 235, 236); S.S.I. 2016/294, reg. 2)

Miscellaneous matters U.K.

186 Rescission of contracts by the court. E+W+S

(1) The court may, on the application of a person who is, as against the liquidator, entitled to the benefit or subject to the burden of a contract made with the company, make an order rescinding the contract on such terms as to payment by or to either party of damages for the non-performance of the contract, or otherwise as the court thinks just.

(2) Any damages payable under the order to such a person may be proved by him as a debt in the winding up.

Modifications etc. (not altering text)

C561 Ss. 185-189 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C563 S. 186 excluded (25.4.1991) by Companies Act 1989 (c.40), ss. 154, 155, 164(1), 182(4), Sch. 22 para. 7(1); S.I. 1991/878, art. 2, Sch. .

S. 186 excluded (11.12.1999) by S.I. 1999/2979, reg. 16(1)

C564 S. 186 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C565 S. 186 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C566 S. 186 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C567 S. 186 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

187 Power to make over assets to employees. E+W+S

(1) On the winding up of a company (whether by the court or voluntarily), the liquidator may, subject to the following provisions of this section, make any payment which the company has, before the commencement of the winding up, decided to make under [F402 section 247 of the Companies Act 2006](power to provide for employees or former employees on cessation or transfer of business).

[F403 (2) The liquidator may, after the winding up has commenced, make any such provision as is mentioned in section 247(1) if—

(a) the company's liabilities have been fully satisfied and provision has been made for the expenses of the winding up,

(b) the exercise of the power has been sanctioned by a resolution of the company, and

(c) any requirements of the company's [F404 articles] as to the exercise of the power conferred by section 247(1) are complied with.]

(3) Any payment which may be made by a company under this section (that is, a payment after the commencement of its winding up) may be made out of the company’s assets which are available to the members on the winding up.

(4) On a winding up by the court, the exercise by the liquidator of his powers under this section is subject to the court’s control, and any creditor or contributory may apply to the court with respect to any exercise or proposed exercise of the power.

(5) Subsections (1) and (2) above have effect notwithstanding anything in any rule of law or in section 107 of this Act (property of company after satisfaction of liabilities to be distributed among members).

Textual Amendments

F402 Words in s. 187(1) substituted (1.10.2007) 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. 42(2) (with art. 12)

F403 S. 187(2) substituted (1.10.2007) 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. 42(3) (with art. 12)

F404 Words in s. 187(2)(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(20)} (with art. 10, Sch. 1 para. 84)

Modifications etc. (not altering text)

C561 Ss. 185-189 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C568 S. 187 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

S. 187 modified (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(2), Sch. 3

C569 S. 187 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C570 S. 187 excluded (E.W.) (31.1.2019) by The Further Education Bodies (Insolvency) Regulations 2019 (S.I. 2019/138), regs. 1(1), 20 (with regs. 1(2), 3(a)(ii))

C571 S. 187 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37, Sch. 1 para. 3 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

188 Notification that company is in liquidation. E+W+S

[F405 (1) When a company is being wound up, whether by the court or voluntarily—

(a) every invoice, order for goods [F406 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 a liquidator of the company or a receiver or manager of the company's property, F407 . . . and

(b) all the company's websites,

must contain a statement that the company is being wound up.]

(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.

Textual Amendments

F405 S. 188(1) substituted (1.1.2007) by The Companies (Registrar, Languages and Trading Disclosures) Regulations 2006 (S.I. 2006/3429), reg. 7(1)

F406 Words in s. 188(1)(a) inserted (1.10.2008) by The Companies (Trading Disclosures) (Insolvency) Regulations 2008 (S.I. 2008/1897), reg. 5(1)(a)

F407 Words in s. 188(1)(a) omitted (1.10.2008) by virtue of The Companies (Trading Disclosures) (Insolvency) Regulations 2008 (S.I. 2008/1897), reg. 5(1)(b)

Modifications etc. (not altering text)

C561 Ss. 185-189 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C572 S. 188 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C573 S. 188 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C574 S. 188 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 145, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 3

C575 S. 188 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

189 Interest on debts. E+W+S

(1) In a winding up interest is payable in accordance with this section on any debt proved in the winding up, including so much of any such debt as represents interest on the remainder.

(2) Any surplus remaining after the payment of the debts proved in a winding up shall, before being applied for any other purpose, be applied in paying interest on those debts in respect of the periods during which they have been outstanding since the company went into liquidation.

(3) All interest under this section ranks equally, whether or not the debts on which it is payable rank equally.

(4) The rate of interest payable under this section in respect of any debt (“the official rate” for the purposes of any provision of this Act in which that expression is used) is whichever is the greater of—

(a) the rate specified in section 17of the M11 Judgments Act 1838 on the day on which the company went into liquidation, and

(b) the rate applicable to that debt apart from the winding up.

(5) In the application of this section to Scotland—

(a) references to a debt proved in a winding up have effect as references to a claim accepted in a winding up, and

(b) the reference to section 17 of the Judgments Act 1838 has effect as a reference to the rules.

Modifications etc. (not altering text)

C561 Ss. 185-189 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C576 S. 189 applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 8(3)(9), Sch. 4 Pt. II para. 24

S. 189 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C577 S. 189 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C578 S. 189 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C579 S. 189(4) applied (S.) (7.6.2013) by The Energy Supply Company Administration (Scotland) Rules 2013 (S.I. 2013/1047), rules 1, 46(2)(b) (with rules 3, 46(7))

Marginal Citations

M11 1838 c. 110.

190 Documents exempt from stamp duty. E+W+S

(1) In the case of a winding up by the court, or of a creditors’ voluntary winding up, the following has effect as regards exemption from duties chargeable under the enactments relating to stamp duties.

(2) If the company is registered in England and Wales, the following documents are exempt from stamp duty—

(a) every assurance relating solely to freehold or leasehold property, or to any estate, right or interest in, any real or personal property, which forms part of the company’s assets and which, after the execution of the assurance, either at law of in equity, is or remains part of those assets, and

(b) every writ, order, certificate, or other instrument or writing relating solely to the property of any company which is being wound up as mentioned in subsection (1), or to any proceeding under such a winding up.

“Assurance” here includes deed, conveyance, assignment and surrender.

(3) If the company is registered in Scotland, the following documents are exempt from stamp duty—

(a) every conveyance relating solely to property which forms part of the company’s assets and which, after the execution of the conveyance, is or remains the company’s property for the benefit of its creditors,

(b) any articles of roup of sale, submission and every other instrument and writing whatsoever relating solely to the company’s property, and

(c) every deed or writing forming part of the proceedings in the winding up.

“Conveyance” here includes assignation, instrument, discharge, writing and deed.

Modifications etc. (not altering text)

C580 S. 190 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C581 S. 190 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

191 Company’s books to be evidence. E+W+S

Where a company is being wound up, all books and papers of the company and of the liquidators are, as between the contributories of the company, prima facie evidence of the truth of all matters purporting to be recorded in them.

Modifications etc. (not altering text)

C582 S. 191 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C583 S. 191 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C584 Ss. 191-194 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

192 Information as to pending liquidations. E+W+S

(1) If the winding up of a company is not concluded within one year after its commencement, the liquidator shall, at such intervals as may be prescribed, until the winding up is concluded, send to the registrar of companies a statement in the prescribed form and containing the prescribed particulars with respect to the proceedings in, and position of, the liquidation.

(2) If a 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)

C584 Ss. 191-194 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C585 S. 192 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C586 S. 192 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C587 S. 192 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C588 S. 192(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 (as amended (28.6.2016) by The Building Societies (Floating Charges and Other Provisions) Order 2016 (S.I. 2016/679), arts. 1(1), 6)

193 Unclaimed dividends (Scotland). E+W+S

(1) The following applies where a company registered in Scotland has been wound up, and is about to be dissolved.

(2) The liquidator shall lodge in an appropriate bank or institution as defined in section [F408 228(1) of the Bankruptcy (Scotland) Act 2016] (not being a bank or institution in or of which the liquidator is acting partner, manager, agent or cashier) in the name of the Accountant of Court the whole unclaimed dividends and unapplied or undistributable balances, and the deposit receipts shall be transmitted to the Accountant of Court.

(3) The provisions of section [F409 150 of the Bankruptcy (Scotland) Act 2016] (so far as consistent with this Act and [F410 the Companies Acts]) apply with any necessary modifications to sums lodged in a bank or institution under this section as they apply to sums deposited under section [F411 148] of the Act first mentioned.

Textual Amendments

F408 Words in s. 193(2) substituted (30.11.2016) by The Bankruptcy (Scotland) Act 2016 (Consequential Provisions and Modifications) Order 2016 (S.I. 2016/1034), art. 1, Sch. 1 para. 4(4)(a)

F409 Words in s. 193(3) substituted (30.11.2016) by The Bankruptcy (Scotland) Act 2016 (Consequential Provisions and Modifications) Order 2016 (S.I. 2016/1034), art. 1, Sch. 1 para. 4(4)(b)(i)

F410 Words in s. 193(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. 75(21) (with art. 10, Sch. 1 para. 84)

F411 Word in s. 193(3) substituted (30.11.2016) by The Bankruptcy (Scotland) Act 2016 (Consequential Provisions and Modifications) Order 2016 (S.I. 2016/1034), art. 1, Sch. 1 para. 4(4)(b)(ii)

Modifications etc. (not altering text)

C584 Ss. 191-194 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C589 S. 193 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C590 S. 193 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C591 S. 193 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

F412 194 Resolutions passed at adjourned meetings. E+W+S

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

Textual Amendments

F412 S. 194 omitted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 46; S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

195 [F413 Court's powers] to ascertain wishes of creditors or contributories. E+W+S

(1) The court may—

(a) as to all matters relating to the winding up of a company, have regard to the wishes of the creditors or contributories (as proved to it by any sufficient evidence), and

(b) if it thinks fit, for the purpose of ascertaining those wishes, direct [F414 qualifying decision procedures to be instigated or the deemed consent procedure to be used in accordance with any directions given by the court, and appoint a person to report the result to the court].

(2) In the case of creditors, regard shall be had to the value of each creditor’s debt.

(3) In the case of contributories, regard shall be had to the number of votes conferred on each contributory F415 . . . .

Textual Amendments

F413 Words in s. 195 heading substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 47(3); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F414 Words in s. 195(1)(b) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 47(2); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F415 Words in s. 195(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(22) (with art. 10, Sch. 1 para. 84)

Modifications etc. (not altering text)

C592 S. 195 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2 (as amended (13.3.2018) by The Small Business, Enterprise and Employment Act 2015 (Consequential Amendments, Savings and Transitional Provisions) Regulations 2018 (S.I. 2018/208), regs. 1(3), 5(3))

C593 S. 195 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

196 Judicial notice of court documents. E+W+S

In all proceedings under this Part, all courts, judges and persons judicially acting, and all officers, judicial or ministerial, of any court, or employed in enforcing the process of any court shall take judicial notice—

(a) of the signature of any officer of the High Court or of [F416 the county court] in England and Wales, or of the Court of Session or a sheriff court in Scotland, or of the High Court in Northern Ireland, and also

(b) of the official seal or stamp of the several offices of the High Court in England and Wales or Northern Ireland, or of the Court of Session, appended to or impressed on any document made, issued or signed under the provisions of this Act or [F417 the Companies Acts], or any official copy of such a document.

Textual Amendments

F416 Words in s. 196(a) substituted (22.4.2014) by Crime and Courts Act 2013 (c. 22), s. 61(3), Sch. 9 para. 52; S.I. 2014/954, art. 2(c) (with art. 3) (with transitional provisions and savings in S.I. 2014/956, arts. 3-11)

F417 Words in s. 196(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(23) (with art. 10, Sch. 1 para. 84)

Modifications etc. (not altering text)

C594 S. 196 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C595 S. 196 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C596 S. 196 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C597 S. 196 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

C598 S. 196 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

197 Commission for receiving evidence. U.K.

(1) When a company is wound up in England and Wales or in Scotland, the court may refer the whole or any part of the examination of witnesses—

(a) to [F418 the] county court in England and Wales, or

(b) to the sheriff principal for a specified sheriffdom in Scotland, or

(c) to the High Court in Northern Ireland or a specified Northern Ireland County Court,

(“specified” meaning specified in the order of the winding-up court).

(2) Any person exercising jurisdiction as a judge of the court to which the reference is made (or, in Scotland, the sheriff principal to whom it is made) shall then, by virtue of this section, be a commissioner for the purpose of taking the evidence of those witnesses.

(3) The judge or sheriff principal has in the matter referred the same power of summoning and examining witnesses, of requiring the production and delivery of documents, of punishing defaults by witnesses, and of allowing costs and expenses to witnesses, as the court which made the winding-up order.

These powers are in addition to any which the judge or sheriff principal might lawfully exercise apart from this section.

(4) The examination so taken shall be returned or reported to the court which made the order in such manner as that court requests.

(5) This section extends to Northern Ireland.

Textual Amendments

F418 Word in s. 197(1)(a) substituted (22.4.2014) by Crime and Courts Act 2013 (c. 22), s. 61(3), Sch. 9 para. 93(c); S.I. 2014/954, art. 2(c) (with art. 3) (with transitional provisions and savings in S.I. 2014/956, arts. 3-11)

Modifications etc. (not altering text)

C599 S. 197 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C600 S. 197 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C601 S. 197 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

C602 S. 197 applied (with modifications) (4.1.2024) by S.I. 2021/716, reg. 37A (as inserted by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 12)

198 Court order for examination of persons in Scotland. E+W+S

(1) The court may direct the examination in Scotland of any person for the time being in Scotland (whether a contributory of the company or not), in regard to the trade, dealings, affairs or property of any company in course of being wound up, or of any person being a contributory of the company, so far as the company may be interested by reason of his being a contributory.

(2) The order or commission to take the examination shall be directed to the sheriff principal of the sheriffdom in which the person to be examined is residing or happens to be for the time; and the sheriff principal shall summon the person to appear before him at a time and place to be specified in the summons for examination on oath as a witness or as a haver, and to produce any books or papers called for which are in his possession or power.

(3) The sheriff principal may take the examination either orally or on written interrogatories, and shall report the same in writing in the usual form to the court, and shall transmit with the report the books and papers produced, if the originals are required and specified by the order or commission, or otherwise copies or extracts authenticated by the sheriff.

(4) If a person so summoned fails to appear at the time and place specified, or refuses to be examined or to make the production required, the sheriff principal shall proceed against him as a witness or haver duly cited; and failing to appear or refusing to give evidence or make production may be proceeded against by the law of Scotland.

(5) The sheriff principal is entitled to such fees, and the witness is entitled to such allowances, as sheriffs principal when acting as commissioners under appointment from the Court of Session and as witnesses and havers are entitled to in the like cases according to the law and practice of Scotland.

(6) If any objection is stated to the sheriff principal by the witness, either on the ground of his incompetency as a witness, or as to the production required, or on any other ground, the sheriff principal may, if he thinks fit, report the objection to the court, and suspend the examination of the witness until it has been disposed of by the court.

Modifications etc. (not altering text)

C603 S. 198 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C604 S. 198 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C605 S. 198 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

199 Costs of application for leave to proceed (Scottish companies). E+W+S

Where a petition or application for leave to proceed with an action or proceeding against a company which is being wound up in Scotland is unopposed and is granted by the court, the costs of the petition or application shall, unless the court otherwise directs, be added to the amount of the petitioner’s or applicant’s claim against the company.

Modifications etc. (not altering text)

C606 S. 199 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C607 S. 199 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C608 S. 199 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C609 S. 199 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

C610 S. 199 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

200 Affidavits etc. in United Kingdom and overseas. E+W+S

(1) An affidavit required to be sworn under or for the purposes of this Part may be sworn in the United Kingdom, or elsewhere in Her Majesty’s dominions, before any court, judge or person lawfully authorised to take and receive affidavits, or before any of Her Majesty’s consuls or vice-consuls in any place outside Her dominions.

(2) All courts, judges, justices, commissioners and persons acting judicially shall take judicial notice of the seal or stamp or signature (as the case may be) of any such court, judge, person, consul or vice-consul attached, appended or subscribed to any such affidavit, or to any other document to be used for the purposes of this Part.

Modifications etc. (not altering text)

C611 S. 200 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C612 S. 200 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C613 S. 200 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C614 S. 200 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C615 S. 200(1) modified (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(2), Sch. 3

Chapter IX E+W+S Dissolution of Companies After Winding Up

201 Dissolution (voluntary winding up). E+W+S

(1) This section applies, in the case of a company wound up voluntarily, where the liquidator has sent to the registrar of companies his final account F419 ... under section 94 (members’ voluntary) or [F420 his final account and statement under] section 106 (creditors’ voluntary).

(2) The registrar on receiving the account [F421 , or the account and statement,] F422 ... shall forthwith register [F423 it or] them; and on the expiration of 3 months from the registration of [F424 the account] the company is deemed to be dissolved F425 ....

F426 (2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F426 (2B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) However, the court may, on the application of the liquidator or any other person who appears to the court to be interested, make an order deferring the date at which the dissolution of the company is to take effect for such time as the court thinks fit.

(4) It is the duty of the person on whose application an order of the court under this section is made within 7 days after the making of the order to deliver to the registrar [F427 a copy] of the order for registration; and if that person fails to do so he is liable to a fine and, for continued contravention, to a daily default fine.

Textual Amendments

F419 Words in s. 201(1) omitted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 48(2)(a); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F420 Words in s. 201(1) inserted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 48(2)(b); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F421 Words in s. 201(2) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 48(3)(a); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F422 Words in s. 201(2) omitted (31.12.2020) by virtue of The Insolvency (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/146), reg. 1(3), Sch. para. 24(2)(a) (with regs. 4, 5) (as amended by S.I. 2019/1459, reg. 1(2), Sch. para. 2); 2020 c. 1, Sch. 5 para. 1(1)

F423 Words in s. 201(2) inserted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 48(3)(b); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F424 Words in s. 201(2) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 48(3)(c); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F425 Words in s. 201(2) omitted (31.12.2020) by virtue of The Insolvency (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/146), reg. 1(3), Sch. para. 24(2)(b) (with regs. 4, 5) (as amended by S.I. 2019/1459, reg. 1(2), Sch. para. 2); 2020 c. 1, Sch. 5 para. 1(1)

F426 S. 201(2A)(2B) omitted (31.12.2020) by virtue of The Insolvency (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/146), reg. 1(3), Sch. para. 24(3) (with regs. 4, 5) (as amended by S.I. 2019/1459, reg. 1(2), Sch. para. 2); 2020 c. 1, Sch. 5 para. 1(1)

F427 Words in s. 201(4) substituted (1.1.2007) by The Companies (Registrar, Languages and Trading Disclosures) Regulations 2006 (S.I. 2006/3429), regs. 1(1), 3(1)(d)

Modifications etc. (not altering text)

C616 Ss. 201, 205 applied by Building Societies Act 1986 (c. 53), ss. 54(3)(a)(5)(a), 90, 126(3), Sch. 15 para. 56

202 Early dissolution (England and Wales). E+W+S

(1) This section applies where an order for the winding up of a company has been made by the court in England and Wales.

(2) The official receiver, if—

(a) he is the liquidator of the company, and

(b) it appears to him—

(i) that the realisable assets of the company are insufficient to cover the expenses of the winding up, and

(ii) that the affairs of the company do not require any further investigation,

may at any time apply to the registrar of companies for the early dissolution of the company.

F428 (2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F428 (2B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) Before making [F429 an application under subsection (2)], the official receiver shall give not less than 28 days’ notice of his intention to do so to the company’s creditors [F430 , other than opted-out creditors,] and contributories and, if there is an administrative receiver of the company, to that receiver.

(4) With the giving of that notice the official receiver ceases (subject to any directions under the next section) to be required to perform any duties imposed on him in relation to the company, its creditors or contributories by virtue of any provision of this Act, apart from a duty to make an application under subsection (2) F431 ....

(5) On the receipt of the official receivers’ application under subsection (2) F432 ... the registrar shall forthwith register it F433 ... and, at the end of the period of 3 months beginning with the day of the registration of the application, the company shall be dissolved F434 ....

F435 (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F435 (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F436 (8) However, the Secretary of State may, on the application of the official receiver or any other person who appears to the Secretary of State to be interested, give directions under section 203 at any time before the end of [F437 the period in subsection (5) F438 ...].]

Textual Amendments

F428 S. 202(2A)(2B) omitted (31.12.2020) by virtue of The Insolvency (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/146), reg. 1(3), Sch. para. 25(2) (with regs. 4, 5); 2020 c. 1, Sch. 5 para. 1(1)

F429 Words in s. 202(3) substituted (26.6.2017) by The Insolvency Amendment (EU 2015/848) Regulations 2017 (S.I. 2017/702), reg. 1, Sch. para. 10(3) (with regs. 3, 4)

F430 Words in s. 202(3) inserted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 49; S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F431 Words in s. 202(4) omitted (31.12.2020) by virtue of The Insolvency (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/146), reg. 1(3), Sch. para. 25(3) (with regs. 4, 5); 2020 c. 1, Sch. 5 para. 1(1)

F432 Words in s. 202(5) omitted (31.12.2020) by virtue of The Insolvency (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/146), reg. 1(3), Sch. para. 25(4)(a) (with regs. 4, 5); 2020 c. 1, Sch. 5 para. 1(1)

F433 Words in s. 202(5) omitted (31.12.2020) by virtue of The Insolvency (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/146), reg. 1(3), Sch. para. 25(4)(b) (with regs. 4, 5); 2020 c. 1, Sch. 5 para. 1(1)

F434 Words in s. 202(5) omitted (31.12.2020) by virtue of The Insolvency (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/146), reg. 1(3), Sch. para. 25(4)(c) (with regs. 4, 5); 2020 c. 1, Sch. 5 para. 1(1)

F435 S. 202(6)(7) omitted (31.12.2020) by virtue of The Insolvency (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/146), reg. 1(3), Sch. para. 25(5) (with regs. 4, 5); 2020 c. 1, Sch. 5 para. 1(1)

F436 S. 202(8): words in s. 202(5) renumbered as s. 202(8) (26.6.2017) by The Insolvency Amendment (EU 2015/848) Regulations 2017 (S.I. 2017/702), reg. 1, Sch. para. 10(6) (with regs. 3, 4)

F437 Words in s. 202(5) substituted (26.6.2017) by The Insolvency Amendment (EU 2015/848) Regulations 2017 (S.I. 2017/702), reg. 1, Sch. para. 10(7) (with regs. 3, 4)

F438 Words in s. 202(8) omitted (31.12.2020) by virtue of The Insolvency (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/146), reg. 1(3), Sch. para. 25(6) (with regs. 4, 5); 2020 c. 1, Sch. 5 para. 1(1)

Modifications etc. (not altering text)

C617 Ss. 202, 203, 205 excluded (1.11.1994) by S.I. 1994/2759, reg. 3, Sch. 3 para. 91A(2)

203 Consequence of notice under s. 202. E+W+S

(1) Where a notice has been given under section 202(3), the official receiver or any creditor or contributory of the company, or the administrative receiver of the company (if there is one) may apply to the Secretary of State for directions under this section.

(2) The grounds on which that application may be made are—

(a) that the realisable assets of the company are sufficient to cover the expenses of the winding up;

(b) that the affairs of the company do require further investigation; or

(c) that for any other reason the early dissolution of the company is inappropriate.

(3) Directions under this section—

(a) are directions making such provision as the Secretary of State thinks fit for enabling the winding up of the company to proceed as if no notice had been given under section 202(3), and

(b) may, in the case of an application under [F439 section 202(8)] , include a direction deferring the date at which the dissolution of the company is to take effect for such period as the Secretary of State thinks fit.

(4) An appeal to the court lies from any decision of the Secretary of State on an application for directions under this section.

(5) It is the duty of the person on whose application any directions are given under this section, or in whose favour an appeal with respect to an application for such directions is determined, within 7 days after the giving of the directions or the determination of the appeal, to deliver to the registrar of companies for registration such a copy of the directions or determination as is prescribed.

(6) If a person without reasonable excuse fails to deliver a copy as required by subsection (5), he is liable to a fine and, for continued contravention, to a daily default fine.

Textual Amendments

F439 Words in s. 203(3)(b) substituted (26.6.2017) by The Insolvency Amendment (EU 2015/848) Regulations 2017 (S.I. 2017/702), reg. 1, Sch. para. 11 (with regs. 3, 4)

Modifications etc. (not altering text)

C618 Ss. 202, 203, 205 excluded (1.11.1994) by S.I. 1994/2759, reg, 3, Sch. 3 para. 91A(2)

204 Early dissolution (Scotland). E+W+S

(1) This section applies where a winding-up order has been made by the court in Scotland.

(2) If after a [F440 liquidator has been appointed] under section 138 (appointment of liquidator in Scotland) it appears to the liquidator that the realisable assets of the company are insufficient to cover the expenses of the winding up, [F441 he may apply] [F441 the liquidator may at any time apply] to the court for an order that the company be dissolved.

(3) Where the liquidator makes that application, if the court is satisfied that the realisable assets of the company are insufficient to cover the expenses of the winding up and it appears to the court appropriate to do so, the court shall make an order that the company be dissolved in accordance with this section.

(4) A copy of the order shall within 14 days from its date be forwarded by the liquidator to the registrar of companies, who shall forthwith register it; and, at the end of the period of 3 months beginning with the day of the registration of the order, the company shall be dissolved.

F442 (4A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F442 (4B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F442 (4C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F442 (4D) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F442 (4E) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) The court may, on an application by any person who appears to the court to have an interest, order that the date at which the dissolution of the company is to take effect shall be deferred for such period as the court thinks fit.

(6) It is the duty of the person on whose application an order is made under subsection (5), within 7 days after the making of the order, to deliver to the registrar of companies such a copy of the order as is prescribed.

(7) If the liquidator without reasonable excuse fails to comply with the requirements of subsection (4), he is liable to a fine and, for continued contravention, to a daily default fine.

(8) If a person without reasonable excuse fails to deliver a copy as required by subsection (6), he is liable to a fine and, for continued contravention, to a daily default fine.

Textual Amendments

F440 Words in s. 204(2) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 50; S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F441 Words in s. 204(2) substituted (S.) (1.4.2016 for specified purposes, 6.4.2019 in so far as not already in force) by The Public Services Reform (Insolvency) (Scotland) Order 2016 (S.S.I. 2016/141), arts. 1(3)(4), 11 (with arts. 14, 15) (see S.I. 2019/816, reg. 4(a))

F442 S. 204(4A)-(4E) omitted (S.) (31.12.2020) by virtue of The Insolvency (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/146), reg. 1(3), Sch. para. 137 (with regs. 4, 5); 2020 c. 1, Sch. 5 para. 1(1)

205 Dissolution otherwise than under ss. 202-204. E+W+S

(1) This section applies where the registrar of companies receives—

[F443 (a) a final account and statement sent under section 146(4) (final account);] or

(b) a notice, from the official receiver that the winding up of a company by the court is complete.

(2) The registrar shall, [F444 on receipt of [F445 the final account and statement or] the notice F446 ..., forthwith register [F447 them or] it] [F444 on receipt of the notice and any statement sent under section 172(10), forthwith register it or them]; and, subject, as follows, at the end of the period of 3 months beginning with the day of the registration [F448 of the final account or notice] F449 ..., the company shall be dissolved.

F450 (2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F450 (2B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) The Secretary of State may, on the application of the official receiver or any other person who appears to the Secretary of State to be interested, give a direction deferring the date at which the dissolution of the company is to take effect for such period as the Secretary of State thinks fit.

(4) An appeal to the court lies from any decision of the Secretary of State on an application for a direction under subsection (3).

(5) Subsection (3) does not apply in a case where the winding-up order was made by the court in Scotland, but in such a case the court may, on an application by any person appearing to the court to have an interest, order that the date at which the dissolution of the company is to take effect shall be deferred for such period as the court thinks fit.

(6) It is the duty of the person—

(a) on whose application a direction is given under subsection (3);

(b) in whose favour an appeal with respect to an application for such a direction is determined; or

(c) on whose application an order is made under subsection (5),

within 7 days after the giving of the direction, the determination of the appeal or the making of the order, to deliver to the registrar for registration such a copy of the direction, determination or order as is prescribed.

(7) If a person without reasonable excuse fails to deliver a copy as required by subsection (6), he is liable to a fine and, for continued contravention, to a daily default fine.

Textual Amendments

F443 S. 205(1)(a) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 51(2); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F444 Words in s. 205(2) substituted (S.) (26.6.2017) by The Insolvency Amendment (EU 2015/848) Regulations 2017 (S.I. 2017/702), reg. 1, Sch. para. 60(1) (with regs. 3, 4) (which affecting provision is omitted (6.4.2019) by virtue of S.I. 2019/816, reg. 6(3))

F445 Words in s. 205(2) inserted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 51(3)(a); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F446 Words in s. 205(2) omitted (31.12.2020) by virtue of The Insolvency (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/146), reg. 1(3), Sch. para. 26(2) (with regs. 4, 5) (as amended by S.I. 2019/1459, reg. 1(2), Sch. para. 2); 2020 c. 1, Sch. 5 para. 1(1)

F447 Words in s. 205(2) inserted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 51(3)(b); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F448 Words in s. 205(2) inserted (E.W.) (26.6.2017) by The Insolvency Amendment (EU 2015/848) Regulations 2017 (S.I. 2017/702), reg. 1, Sch. para. 12(2)(b) (with regs. 3, 4) (which amendment is extended (S.) (6.4.2019) by virtue of S.I. 2019/816, reg. 6(2))

F449 Words in s. 205(2) omitted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 51(3)(c); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F450 S. 205(2A)(2B) omitted (31.12.2020) by virtue of The Insolvency (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/146), reg. 1(3), Sch. para. 26(3) (with regs. 4, 5) (as amended by S.I. 2019/1459, reg. 1(2), Sch. para. 2); 2020 c. 1, Sch. 5 para. 1(1)

Modifications etc. (not altering text)

C619 Ss. 201, 205 applied by Building Societies Act 1986 (c. 53, SIF 16), ss. 54(3)(a)(5)(a), 90, 126(3), Sch. 15 para. 56

Ss. 202, 203, 205 excluded (1.11.1994) by S.I. 1994/2759, reg. 3, Sch. 3 para. 91A(2)

Chapter X E+W+S Malpractice before and during Liquidation; Penalisation of Companies and Company Officers; Investigations and Prosecutions

Offences of fraud, deception, etc. E+W+S

206 Fraud, etc. in anticipation of winding up. E+W+S

(1) When a company is ordered to be wound up by the court, or passes a resolution for voluntary winding up, any person, being a past or present officer of the company, is deemed to have committed an offence if, within the 12 months immediately preceding the commencement of the winding up, he has—

(a) concealed any part of the company’s property to the value of [F451 £500] or more, or concealed any debt due to or from the company, or

(b) fraudulently removed any part of the company’s property to the value of [F451 £500] or more, or

(c) concealed, destroyed, mutilated or falsified any book or paper affecting or relating to the company’s property or affairs, or

(d) made any false entry in any book or paper affecting or relating to the company’s property or affairs, or

(e) fraudulently parted with, altered or made any omission in any document affecting or relating to the company’s property or affairs, or

(f) pawned, pledged or disposed of any property of the company which has been obtained on credit and has not been paid for (unless the pawning, pledging or disposal was in the ordinary way of the company’s business).

(2) Such a person is deemed to have committed an offence if within the period above mentioned he has been privy to the doing by others of any of the things mentioned in paragraphs (c), (d) and (e) of subsection (1); and he commits an offence if, at any time after the commencement of the winding up, he does any of the things mentioned in paragraphs (a) to (f) of that subsection, or is privy to the doing by others of any of the things mentioned in paragraphs (c) to (e) of it.

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

(4) It is a defence—

(a) for a person charged under paragraph (a) or (f) of subsection (1) (or under subsection (2) in respect of the things mentioned in either of those two paragraphs) to prove that he had no intent to defraud, and

(b) for a person charged under paragraph (c) or (d) of subsection (1) (or under subsection (2) in respect of the things mentioned in either of those two paragraphs) to prove that he had no intent to conceal the state of affairs of the company or to defeat the law.

(5) Where a person pawns, pledges or disposes of any property in circumstances which amount to an offence under subsection (1)(f), every person who takes in pawn or pledge, or otherwise receives, the property knowing it to be pawned, pledged or disposed of in such circumstances, is guilty of an offence.

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

(7) The money sums specified in paragraphs (a) and (b) of subsection (1) are subject to increase or reduction by order under section 416 in Part XV.

Textual Amendments

F451 “£500" substituted by virtue of S.I. 1986/1996, art. 2(1), Sch. Pt. I

Modifications etc. (not altering text)

C620 S. 206 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C621 S. 206 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C622 S. 206 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C623 S. 206 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

C624 Ss. 206-215 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C625 S. 206(1) modified (temp.) (retrospective to 27.4.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), Sch. 10 paras. 8(1)(2), 11 (with ss. 2(2), 5(2))

207 Transactions in fraud of creditors. E+W+S

(1) When a company is ordered to be wound up by the court or passes a resolution for voluntary winding up, a person is deemed to have committed an offence if he, being at the time an officer of the company—

(a) has made or caused to be made any gift or transfer of, or charge on, or has caused or connived at the levying of any execution against, the company’s property, or

(b) has concealed or removed any part of the company’s property since, or within 2 months before, the date of any unsatisfied judgment or order for the payment of money obtained against the company.

(2) A person is not guilty of an offence under this section—

(a) by reason of conduct constituting an offence under subsection (1)(a) which occurred more than 5 years before the commencement of the winding up, or

(b) if he proves that, at the time of the conduct constituting the offence, he had no intent to defraud the company’s creditors.

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

Modifications etc. (not altering text)

C624 Ss. 206-215 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C626 S. 207 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C627 S. 207 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C628 S. 207 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C629 S. 207 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

C630 S. 207(1) modified (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(2), Sch. 3

C631 S. 207(2)(a) modified (temp.) (retrospective to 27.4.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), Sch. 10 paras. 8(1)(2), 12 (with ss. 2(2), 5(2))

208 Misconduct in course of winding up. E+W+S

(1) When a company is being wound up, whether by the court or voluntarily, any person, being a past or present officer of the company, commits an offence if he—

(a) does not to the best of his knowledge and belief fully and truly discover to the liquidator all the company’s property, and how and to whom and for what consideration and when the company disposed of any part of that property (except such part as has been disposed of in the ordinary way of the company’s business), or

(b) does not deliver up to the liquidator (or as he directs) all such part of the company’s property as is in his custody or under his control, and which he is required by law to deliver up, or

(c) does not deliver up to the liquidator (or as he directs) all books and papers in his custody or under his control belonging to the company and which he is required by law to deliver up, or

(d) knowing or believing that a false debt has been proved by any person in the winding up, fails to inform the liquidator as soon as practicable, or

(e) after the commencement of the winding up, prevents the production of any book or paper affecting or relating to the company’s property or affairs.

(2) Such a person commits an offence if after the commencement of the winding up he attempts to account for any part of the company’s property by fictitious losses or expenses; and he is deemed to have committed that offence if he has so attempted [F452 in connection with any qualifying decision procedure or deemed consent procedure] of the company’s creditors within the 12 months immediately preceding the commencement of the winding up.

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

(4) It is a defence—

(a) for a person charged under paragraph (a), (b) or (c) of subsection (1) to prove that he had no intent to defraud, and

(b) for a person charged under paragraph (e) of that subsection to prove that he had no intent to conceal the state of affairs of the company or to defeat the law.

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

Textual Amendments

F452 Words in s. 208(2) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 52; S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

Modifications etc. (not altering text)

C624 Ss. 206-215 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C632 S. 208 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C633 S. 208 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2 (as amended (13.3.2018) by The Small Business, Enterprise and Employment Act 2015 (Consequential Amendments, Savings and Transitional Provisions) Regulations 2018 (S.I. 2018/208), regs. 1(3), 5(3))

C634 S. 208 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C635 S. 208 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

C636 S. 208(2) modified (temp.) (retrospective to 27.4.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), Sch. 10 paras. 8(1)(2), 13 (with ss. 2(2), 5(2))

209 Falsification of company’s books. E+W+S

(1) When a company is being wound up, an officer or contributory of the company commits an offence if he destroys, multilates, alters or falsifies any books, papers or securities, or makes or is privy to the making of any false or fraudulent entry in any register, book of account or document belonging to the company with intent to defraud or deceive any person.

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

Modifications etc. (not altering text)

C624 Ss. 206-215 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C637 S. 209 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C638 S. 209 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C639 S. 209 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C640 S. 209 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

210 Material omissions from statement relating to company’s affairs. E+W+S

(1) When a company is being wound up, whether by the court or voluntarily, any person, being a past or present officer of the company, commits an offence if he makes any material omission in any statement relating to the company’s affairs.

(2) When a company has been ordered to be wound up by the court, or has passed a resolution for voluntary winding up, any such person is deemed to have committed that offence if, prior to the winding up, he has made any material omission in any such statement.

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

(4) It is a defence for a person charged under this section to prove that he had no intent to defraud.

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

Modifications etc. (not altering text)

C624 Ss. 206-215 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C641 S. 210 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C642 S. 210 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C643 S. 210 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C644 S. 210 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

C645 S. 210(2) modified (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(2), Sch. 3

211 False representations to creditors. E+W+S

(1) When a company is being wound up, whether by the court or voluntarily, any person, being a past or present officer of the company—

(a) commits an offence if he makes any false representation or commits any other fraud for the purpose of obtaining the consent of the company’s creditors or any of them to an agreement with reference to the company’s affairs or to the winding up, and

(b) is deemed to have committed that offence if, prior to the winding up, he has made any false representation, or committed any other fraud, for that purpose.

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

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

Modifications etc. (not altering text)

C624 Ss. 206-215 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C646 S. 211 applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 8, Sch. 4 Pt. I para. 1, Pt. II para. 25

S. 211 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C647 S. 211 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C648 S. 211 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C649 S. 211 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37, Sch. 2 paras. 4-6 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

Penalisation of directors and officers E+W+S

212 Summary remedy against delinquent directors, liquidators, etc. E+W+S

(1) This section applies if in the course of the winding up of a company it appears that a person who—

(a) is or has been an officer of the company,

(b) has acted as liquidator F453 . . . or administrative receiver of the company, or

(c) not being a person falling within paragraph (a) or (b), is or has been concerned, or has taken part, in the promotion, formation or management of the company,

has misapplied or retained, or become accountable for, any money or other property of the company, or been guilty of any misfeasance or breach of any fiduciary or other duty in relation to the company.

(2) The reference in subsection (1) to any misfeasance or breach of any fiduciary or other duty in relation to the company includes, in the case of a person who has acted as liquidator F454 . . . of the company, any misfeasance or breach of any fiduciary or other duty in connection with the carrying out of his functions as liquidator F454 . . . of the company.

(3) The court may, on the application of the official receiver or the liquidator, or of any creditor or contributory, examine into the conduct of the person falling within subsection (1) and compel him—

(a) to repay, restore or account for the money or property or any part of it, with interest at such rate as the court thinks just, or

(b) to contribute such sum to the company’s assets by way of compensation in respect of the misfeasance or breach of fiduciary or other duty as the court thinks just.

(4) The power to make an application under subsection (3) in relation to a person who has acted as liquidator F455 . . . of the company is not exerciseable, except with the leave of the court, after [F456 he] has had his release.

(5) The power of a contributory to make an application under subsection (3) is not exercisable except with the leave of the court, but is exercisable notwithstanding that he will not benefit from any order the court may make on the application.

Textual Amendments

F453 Word in s. 212(1)(b) repealed (15.9.2003) by 2002 c. 40, ss. 248(3), 278, 279, Sch. 17 para. 18(a), Sch. 26 (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))

F454 Words in s. 212(2) repealed (15.9.2003) by 2002 c. 40, ss. 248(3), 278, 279, Sch. 17 para. 18(b), Sch. 26 (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))

F455 Words in s. 212(4) repealed (15.9.2003) by 2002 c. 40, ss. 248(3), 278, 279, Sch. 17 para. 18(c)(i), Sch. 26 (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))

F456 Word in s. 212(4) substituted (15.9.2003) by 2002 c. 40, ss. 248(3), 279, Sch. 17 para. 18(c)(ii) (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)

C624 Ss. 206-215 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C650 S. 212 applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 4(2)(3)

S. 212 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

S. 212 applied (20.4.2003) by The Insurers (Reorganisation and Winding Up) Regulations 2003 (S.I. 2003/1102), reg. 31 (with reg. 3)

S. 212 applied (18.2.2004) by The Insurers (Reorganisation and Winding Up) Regulations 2004 (S.I. 2004/353), reg. 31 (with reg. 3) (as modified (10.8.2005) by S.I. 2005/1998, regs. 2(3), 40(1)-(4)(10))

C651 S. 212 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C652 S. 212 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C653 S. 212 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

213 Fraudulent trading. E+W+S

(1) If in the course of the winding up of a company it appears that any business of the company has been carried on with intent to defraud creditors of the company or creditors of any other person, or for any fraudulent purpose, the following has effect.

(2) The court, on the application of the liquidator may declare that any persons who were knowingly parties to the carrying on of the business in the manner above-mentioned are to be liable to make such contributions (if any) to the company’s assets as the court thinks proper.

Modifications etc. (not altering text)

C624 Ss. 206-215 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C654 S. 213 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C655 S. 213 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C656 S. 213 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C657 S. 213 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 145, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 3 (as amended (7.4.2017) by S.I. 2017/400, regs. 1(2), 5(10))

C658 S. 213 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

214 Wrongful trading. E+W+S

(1) Subject to subsection (3) below, if in the course of the winding up of a company it appears that subsection (2) of this section applies in relation to a person who is or has been a director of the company, the court, on the application of the liquidator, may declare that that person is to be liable to make such contribution (if any) to the company’s assets as the court thinks proper.

(2) This subsection applies in relation to a person if—

(a) the company has gone into insolvent liquidation,

(b) at some time before the commencement of the winding up of the company, that person knew or ought to have concluded that there was no reasonable prospect that the company would avoid going into insolvent liquidation [F457 or entering insolvent administration], and

(c) that person was a director of the company at that time;

but the court shall not make a declaration under this section in any case where the time mentioned in paragraph (b) above was before 28th April 1986.

(3) The court shall not make a declaration under this section with respect to any person if it is satisfied that after the condition specified in subsection (2)(b) was first satisfied in relation to him that person took every step with a view to minimising the potential loss to the company’s creditors as ([F458 on the assumption that he had knowledge of the matter mentioned in subsection (2)(b)]) he ought to have taken.

(4) For the purposes of subsections (2) and (3), the facts which a director of a company ought to know or ascertain, the conclusions which he ought to reach and the steps which he ought to take are those which would be known or ascertained, or reached or taken, by a reasonably diligent person having both—

(a) the general knowledge, skill and experience that may reasonably be expected of a person carrying out the same functions as are carried out by that director in relation to the company, and

(b) the general knowledge, skill and experience that that director has.

(5) The reference in subsection (4) to the functions carried out in relation to a company by a director of the company includes any functions which he does not carry out but which have been entrusted to him.

(6) For the purposes of this section a company goes into insolvent liquidation if it goes into liquidation at a time when its assets are insufficient for the payment of its debts and other liabilities and the expenses of the winding up.

[F459 (6A) For the purposes of this section a company enters insolvent administration if it enters administration at a time when its assets are insufficient for the payment of its debts and other liabilities and the expenses of the administration.]

(7) In this section “director” includes a shadow director.

(8) This section is without prejudice to section 213.

Textual Amendments

F457 Words in s. 214(2)(b) inserted (1.10.2015) by Small Business, Enterprise and Employment Act 2015 (c. 26), ss. 117(3)(a), 164(1); S.I. 2015/1689, reg. 2(j) (with Sch. para. 15)

F458 Words in s. 214(3) substituted (1.10.2015) by Small Business, Enterprise and Employment Act 2015 (c. 26), ss. 117(3)(b), 164(1); S.I. 2015/1689, reg. 2(j) (with Sch. para. 15)

F459 S. 214(6A) inserted (1.10.2015) by Small Business, Enterprise and Employment Act 2015 (c. 26), ss. 117(3)(c), 164(1); S.I. 2015/1689, reg. 2(j) (with Sch. para. 15)

Modifications etc. (not altering text)

C624 Ss. 206-215 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C659 S. 214 modified (7.10.2008 at 9.30 a.m.) ) by The Heritable Bank plc Transfer of Certain Rights and Liabilities Order 2008 (S.I. 2008/2644), art. 26, Sch. 2 para. 3(a)

C660 S. 214 modified (29.9.2008 at 8.00 a.m.) ) by The Bradford & Bingley plc Transfer of Securities and Property etc. Order 2008 (S.I. 2008/2546), art. 13, Sch. 1 para. 3(a)

C661 S. 214 modified (22.2.2008) by The Northern Rock plc Transfer Order 2008 (S.I. 2008/432), art. 17(1), Sch. para. 3(a)

C662 S. 214 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C663 S. 214 modified (30.3.2009 at 8.00 a.m.) by The Amendments to Law (Resolution of Dunfermline Building Society) Order 2009 (S.I. 2009/814), art. 7, Sch. 1 para. 3(a)

C664 S. 214 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C665 S. 214 excluded (1.3.2016) by The NRAM plc (formerly Northern Rock plc) Consequential and Supplementary Provisions Order 2016 (S.I. 2016/114), arts. 1(1), 7(1)(3), Sch. para. 2(a)

C666 S. 214 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2 (as amended (7.4.2017) by S.I. 2017/400, regs. 1(2), 5(4))

C667 S. 214 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 145, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 3 (as amended (7.4.2017) S.I. 2017/400, regs. 1(2), 5(10))

C668 S. 214 modified (26.11.2020) by The Corporate Insolvency and Governance Act 2020 (Coronavirus) (Suspension of Liability for Wrongful Trading and Extension of the Relevant Period) Regulations 2020 (S.I. 2020/1349), regs. 1, 2(1)(2) (with reg. 2(3)-(9))

C669 S. 214 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37, Sch. 1 para. 3 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

C670 S. 214 applied (with modifications) (E.W.) (15.3.2024) by The Water Industry (Special Administration) Regulations 2024 (S.I. 2024/205), regs. 2(2), 5(1) (with reg. 64)

C671 S. 214(2) modified (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(2), Sch. 3

C672 S. 214(4) applied (6.4.2005) by The Pensions Regulator (Notifiable Events) Regulations 2005 (S.I. 2005/900), reg. 2(2)(c)

215 Proceedings under ss. 213, 214. E+W+S

(1) On the hearing of an application under section 213 or 214, the liquidator may himself give evidence or call witnesses.

(2) Where under either section the court makes a declaration, it may give such further directions as it thinks proper for giving effect to the declaration; and in particular, the court may—

(a) provide for the liability of any person under the declaration to be a charge on any debt or obligation due from the company to him, or on any mortgage or charge or any interest in a mortgage or charge on assets of the company held by or vested in him, or any person on his behalf, or any person claiming as assignee from or through the person liable or any person acting on his behalf, and

(b) from time to time make such further order as may be necessary for enforcing any charge imposed under this subsection.

(3) For the purposes of subsection (2), “assignee”—

(a) includes a person to whom or in whose favour, by the directions of the person made liable, the debt, obligation, mortgage or charge was created, issued or transferred or the interest created, but

(b) does not include an assignee for valuable consideration (not including consideration by way of marriage [F460 or the formation of a civil partnership]) given in good faith and without notice of any of the matters on the ground of which the declaration is made.

(4) Where the court makes a declaration under either section in relation to a person who is a creditor of the company, it may direct that the whole or any part of any debt owed by the company to that person and any interest thereon shall rank in priority after all other debts owed by the company and after any interest on those debts.

(5) Sections 213 and 214 have effect notwithstanding that the person concerned may be criminally liable in respect of matters on the ground of which the declaration under the section is to be made.

Textual Amendments

F460 Words in s. 215(3)(b) inserted (5.12.2005) by Civil Partnership Act 2004 (c. 33), ss. 261(1), 263, Sch. 27 para. 112; S.I. 2005/3175, art. 2(2) (subject to art. 2(3)-(5))

Modifications etc. (not altering text)

C624 Ss. 206-215 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C673 S. 215 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C674 S. 215 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C675 S. 215 applied (with modifications) (S.) (25.2.2009) by The Bank Administration (Scotland) Rules 2009 (S.I. 2009/350), rule 38

C676 S. 215 modified (S.) (29.3.2009 at 4.00pm) by The Building Society Special Administration (Scotland) Rules 2009 (S.I. 2009/806), rule 37

C677 S. 215 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C678 S. 215 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37, Sch. 1 para. 3 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

C679 S. 215(1)(2)(4)(5) modified (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(2), Sch. 3

216 Restriction on re-use of company names. E+W+S

(1) This section applies to a person where a company (“the liquidating company”) has gone into insolvent liquidation on or after the appointed day and he was a director or shadow director of the company at any time in the period of 12 months ending with the day before it went into liquidation.

(2) For the purposes of this section, a name is a prohibited name in relation to such a person if—

(a) it is a name by which the liquidating company was known at any time in that period of 12 months, or

(b) it is a name which is so similar to a name falling within paragraph (a) as to suggest an association with that company.

(3) Except with leave of the court or in such circumstances as may be prescribed, a person to whom this section applies shall not at any time in the period of 5 years beginning with the day on which the liquidating company went into liquidation—

(a) be a director of any other company that is known by a prohibited name, or

(b) in any way, whether directly or indirectly, be concerned or take part in the promotion, formation or management of any such company, or

(c) in any way, whether directly or indirectly, be concerned or take part in the carrying on of a business carried on (otherwise than by a company) under a prohibited name.

(4) If a person acts in contravention of this section, he is liable to imprisonment or a fine, or both.

(5) In subsection (3) “the court” means any court having jurisdiction to wind up companies; and on an application for leave under that subsection, the Secretary of State or the official receiver may appear and call the attention of the court to any matters which seem to him to be relevant.

(6) References in this section, in relation to any time, to a name by which a company is known are to the name of the company at that time or to any name under which the company carries on business at that time.

(7) For the purposes of this section a company goes into insolvent liquidation if it goes into liquidation at at time when its assets are insufficient for the payment of its debts and other liabilities and the expenses of the winding up.

(8) In this section “company” includes a company which may be wound up under Part V of this Act.

Modifications etc. (not altering text)

C680 S. 216 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C681 S. 216 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

217 Personal liability for debts, following contravention of s. 216. E+W+S

(1) A person is personally responsible for all the relevant debts of a company if at any time—

(a) in contravention of section 216, he is involved in the management of the company, or

(b) as a person who is involved in the management of the company, he acts or is willing to act on instructions given (without the leave of the court) by a person whom he knows at that time to be in contravention in relation to the company of section 216.

(2) Where a person is personally responsible under this section for the relevant debts of a company, he is jointly and severally liable in respect of those debts with the company and any other person who, whether under this section or otherwise, is so liable.

(3) For the purposes of this section the relevant debts of a company are—

(a) in relation to a person who is personally responsible under paragraph (a) of subsection (1), such debts and other liabilities of the company as are incurred at a time when that person was involved in the management of the company, and

(b) in relation to a person who is personally responsible under paragraph (b) of that subsection, such debts and other liabilities of the company as are incurred at a time when that person was acting or was willing to act on instructions given as mentioned in that paragraph.

(4) For the purposes of this section, a person is involved in the management of a company if he is a director of the company or if he is concerned, whether directly or indirectly, or takes part, in the management of the company.

(5) For the purposes of this section a person who, as a person involved in the management of a company, has at any time acted on instructions given (without the leave of the court) by a person whom he knew at that time to be in contravention in relation to the company of section 216 is presumed, unless the contrary is shown, to have been willing at any time thereafter to act on any instructions given by that person.

(6) In this section “company” includes a company which may be wound up under Part V.

Modifications etc. (not altering text)

C682 S. 217 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C683 S. 217 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

Investigation and prosecution of malpractice E+W+S

218 Prosecution of delinquent officers and members of company. E+W+S

(1) If it appears to the court in the course of a winding up by the court that any past or present officer, or any member, of the company has been guilty of any offence in relation to the company for which he is criminally liable, the court may (either on the application of a person interested in the winding up or of its own motion) direct the liquidator to refer the matter

[F461 (a) in the case of a winding up in England and Wales, to the Secretary of State, and

(b) in the case of a winding up in Scotland, to the Lord Advocate]

F462 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) If in the case of a winding up by the court in England and Wales it appears to the liquidator, not being the official receiver, that any past or present officer of the company, or any member of it, has been guilty of an offence in relation to the company for which he is criminally liable, the liquidator shall report the matter to the official receiver.

(4) If it appears to the liquidator in the course of a voluntary winding up that any past or present officer of the company, or any member of it, has been guilty of an offence in relation to the company for which he is criminally liable, he shall [F463 forthwith report the matter—

(a) in the case of a winding up in England and Wales, to the Secretary of State, and

(b) in the case of a winding up in Scotland, to the Lord Advocate,

and shall furnish to the Secretary of State or (as the case may be) the Lord Advocate] such information and give to him 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 liquidator and relating to the matter in question) as [F464 the Secretary of State or (as the case may be) the Lord Advocate] requires.

[F465 (5) Where a report is made to the Secretary of State under subsection (4) 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 [F466 the Companies Act 1985] to investigate a company’s affairs.]

(6) If it appears to the court in the course of a voluntary winding up that—

(a) any past or present officer of the company, or any member of it, has been guilty as above-mentioned, and

(b) no report with respect to the matter has been made by the liquidator F467 . . . under subsection (4),

the court may (on the application of any person interested in the winding up or of its own motion) direct the liquidator to make such a report.

On a report being made accordingly, this section has effect as though the report had been made in pursuance of subsection (4).

Textual Amendments

F461 S. 218(1)(a)(b) substituted for words in s. 218(1) (2.4.2001) by 2000 c. 39, s. 10(2); S.I. 2001/766, art. 2(1)(b) (subject to art. 3)

F462 S. 218(2) repealed (2.4.2001) by 2000 c. 39, ss. 10(3), 15, Sch. 5; S.I. 2001/766, art. 2(1)(b)(c) (subject to art. 3)

F463 Words in s. 218(4)(a)(b) substituted (2.4.2001) by 2000 c. 39, s. 10(4)(a); S.I. 2001/766, art. 2(b) (subject to art. 3)

F464 Words in s. 218(4) substituted (2.4.2001) by 2000 c. 39, s. 10(4)(b); S.I. 2001/766, art. 2(b) (subject to art. 3)

F465 S. 218(5) substituted (2.4.2001) by 2000 c. 39, s. 10(5); S.I. 2001/766, art. 2(b) (subject to art. 3)

F466 Words in s. 218(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(24)} (with art. 10, Sch. 1 para. 84)

F467 Words in s. 218(6)(b) repealed (2.4.2001) by 2000 c. 39, ss. 10(6), 15, Sch. 5; S.I. 2001/766, art. 2(1)(b)(c) (subject to art. 3)

Modifications etc. (not altering text)

C684 S. 218 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C685 S. 218 amendment to earlier amending provision S.I. 2009/805, Sch. 1 para. 13(6) (1.4.2013) by The Financial Services Act 2012 (Mutual Societies) Order 2013 (S.I. 2013/496), art. 1(1), Sch. 11 para. 16(3)(a) (with Sch. 12)

C686 S. 218 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C687 S. 218 modified (E.W.) (31.1.2019) by The Further Education Bodies (Insolvency) Regulations 2019 (S.I. 2019/138), regs. 1(1), 21 (with regs. 1(2), 3(a)(ii))

C688 S. 218 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37, Sch. 1 para. 3 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

C689 S. 218 applied in part (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C690 S. 218(1)(4)(6) modified (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(2), Sch. 3

C691 S. 218(1)(2)(4)(6) applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

219 Obligations arising under s. 218. E+W+S

(1) For the purpose of an investigation by the Secretary of State [F468 in consequence of a report made to him under section 218(4)], any obligation imposed on a person by any provision of [F469 the Companies Act 1985] to produce documents or give information to, or otherwise to assist, inspectors appointed as mentioned in [F468 section 218(5)] is to be regarded as an obligation similarly to assist the Secretary of State in his investigation.

(2) An answer given by a person to a question put to him in exercise of the powers conferred by section 218(5) may be used in evidence against him.

[F470 (2A) 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.

(2B) Subsection (2A) applies to any offence other than—

(a) an offence under section 2 or 5 of the M12 Perjury 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 M13 Criminal Law (Consolidation) (Scotland) Act 1995 (false statements made on oath or otherwise than on oath).]

(3) Where criminal proceedings are instituted by [F471 the Director of Public Prosecutions, the Lord Advocate] or the Secretary of State following any report or reference under section 218, it is the duty of the liquidator and every officer and agent of the company past and present (other than the defendant or defender) to give to [F471 the Director of Public Prosecutions, the Lord Advocate] or the Secretary of State (as the case may be) 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.

(4) If a person fails or neglects to give assistance in the manner required by subsection (3), the court may, on the application of the [F472 Director of Public Prosecutions, the Lord Advocate] or the Secretary of State (as the case may be) direct the person to comply with that subsection; and if the application is made with respect to a liquidator, the court may (unless it appears that the failure or neglect to comply was due to the liquidator not having in his hands sufficient assets of the company to enable him to do so) direct that the costs shall be borne by the liquidator personally.

Textual Amendments

F468 Words in s. 219(1) substituted (2.4.2001) by 2000 c. 39, s. 10(7)(a); S.I. 2001/766, art. 2(1)(b) (subject to art. 3)

F469 Words in s. 219(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(24) (with art. 10, Sch. 1 para. 84)

F470 S. 219(2A)(2B) inserted (2.4.2001) by 2000 c. 39, s. 11; S.I. 2001/766, art. 2(1)(b); (subject to art. 3)

F471 Words in s. 219(3) substituted (2.4.2001) by 2000 c. 39, s. 10(7)(b); S.I. 2001/766, art. 2(1)(b) (subject to art. 3)

F472 Words in s. 219(4) substituted (2.4.2001) by 2000 c. 39, s. 10(7)(c); S.I. 2001/766, art. 2(1)(b) (subject to art. 3)

Modifications etc. (not altering text)

C692 S. 219 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C693 S. 219 amendment to earlier amending provision S.I. 2009/805, Sch. 1 para. 13(6) (1.4.2013) by The Financial Services Act 2012 (Mutual Societies) Order 2013 (S.I. 2013/496), art. 1(1), Sch. 11 para. 16(3)(b) (with Sch. 12)

C694 S. 219 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C695 S. 219 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

Marginal Citations

M12 1911 c. 6.

M13 1995 c. 39.

Part V E+W+S Winding Up of Unregistered Companies

Modifications etc. (not altering text)

C696 Pt. 5 (ss. 220-229) modified by Company Directors Disqualification Act 1986 (c. 46, SIF 27), ss. 21(2), 25

Pt. 5 modified by Criminal Justice (Scotland) Act 1987 (c. 41, SIF 39:1), ss. 30(6), 35(4), 47(4)(a)

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

Pt. 5 modified by S.I. 1989/638, regs. 8(1), 21

Pt. 5 modified by S.I. 1989/1806, art. 2, Sch. 1, section 47(1)

Pt. 5 modified (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 s. 4, Sch. 3 paras. 3, 16))

Pt. 5 modified (1.4.1996) by 1995 c. 43, ss. 44, 50(2), Sch. 2 para. 3(4)

Pt. 5 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))

C697 Pt. 5 (ss. 220-229) excluded by S.I. 1986/2142, arts. 1(2), 13(1), 15

C698 Pts. 1-7 (ss. 1-251) applied (with modifications) by S.I. 1989/1276, arts. 2, 3

Pt. 5 (ss. 220-229) applied (7.2.1994) by 1993 c. 48, s. 119(8) (with s. 6(8)); S.I. 1994/86, art. 2

Pt. 5 applied (with modifications) (1.11.1994) by S.I. 1994/2759, reg. 3, Sch. 3 paras. 91, 91A, 91B

Pt. 5 applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 7(1)(2), Sch. 3 Pt. I

Pt. 5 (except ss. 223, 224) applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 8(1)(2), Sch. 4 Pt. I (as amended (1.7.2005) by S.I. 2005/1516, art. 9)

C699 Pt. 5 (ss. 220-229) extended (13.1.1993 for purposes of regulation of business of incorporated friendly societies and 28.4.1993 otherwise) by Friendly Societies Act 1992 (c. 40), s. 52(1)(9) (with ss. 7(5), 93(4)); S.I. 1993/16, art. 2, Sch. 3; S.I. 1993/1186, art. 2(2), Sch. 2

C700 First 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. (as amended (1.4.2013) by The Financial Services Act 2012 (Consequential Amendments and Transitional Provisions) Order 2013 (S.I. 2013/472), art. 1(1), Sch. 2 para. 117; and (13.3.2018) by The Small Business, Enterprise and Employment Act 2015 (Consequential Amendments, Savings and Transitional Provisions) Regulations 2018 (S.I. 2018/208), regs. 1(3), 11

C701 Pt. 5 (ss. 220-229) amended (1.12.2001) by 2000 c. 8, s. 371(2)(b); S.I. 2001/3538 art. 2(1)

C702 Pt. 5 extended by S.I. 2001/1228, reg. 33C(3) (as inserted (21.12.2011) by The Open-Ended Investment Companies (Amendment) Regulations 2011 (S.I. 2011/3049), reg. 3(5) (with regs. 4, 10(1))

[F473 220 Meaning of “unregistered company”. E+W+S

For the purposes of this Part “unregistered company” includes any association and any company, with the exception of a company registered under the Companies Act 2006 in any part of the United Kingdom.]

Textual Amendments

F473 S. 220 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. 76(2)} (with art. 10, Sch. 1 para. 84)

Modifications etc. (not altering text)

C703 S. 220 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C704 S. 220 applied (with modifications) (1.12.1994) by S.I. 1994/2124, arts. 8, 10(1)(b), Sch. 4 Pt. I paras. 1(1), 2

ss. 220-222 applied (with modifications) (1.12.1994) by S.I. 1994/2421, arts. 8(1)(2)(9), Sch. 4 Pt. I

ss. 220-223 applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 7(1)(2), 9, Sch. 3 Pt. I

C705 S. 220 extended by Banking Act 1987 (c. 22, SIF 10), s. 92(2)

221 Winding up of unregistered companies. E+W+S

(1) Subject to the provisions of this Part, any unregistered company may be wound up under this Act; and all the provisions of this Act F474 . . . about winding up apply to an unregistered company with the exceptions and additions mentioned in the following subsections.

(2) If an unregistered company has a principal place of business situated in Northern Ireland, it shall not be wound up under this Part unless it has a principal place of business situated in England and Wales or Scotland, or in both England and Wales and Scotland.

(3) For the purpose of determining a court’s winding-up jurisdiction, an unregistered company is deemed—

(a) to be registered in England and Wales or Scotland, according as its principal place of business is situated in England and Wales or Scotland, or

(b) if it has a principal place of business situated in both countries, to be registered in both countries;

and the principal place of business situated in that part of Great Britain in which proceedings are being instituted is, for all purposes of the winding up, deemed to be the registered office of the company.

(4) No unregistered company shall be wound up under this Act voluntarily [F475 , except in accordance with the [F476 EU Regulation]] .

(5) The circumstances in which an unregistered company may be wound up are as follows—

(a) if the company is dissolved, or has ceased to carry on business, or is carrying on business only for the purpose of winding up its affairs;

(b) if the company is unable to pay its debts;

(c) if the court is of opinion that it is just and equitable that the company should be wound up.

(6) A petition for winding up a trustee savings bank may be presented by the Trustee Savings Banks Central Board or by a commissioner appointed under section 35 of the M14 Trustee Savings Banks Act 1981 as well as by any person authorised under Part IV of this Act to present a petition for the winding up of a company.

On such day as the Treasury appoints by order under section 4(3) of the M15 Trustee Savings Banks Act 1985, this subsection ceases to have effect and is hereby repealed.

(7) In Scotland, an unregistered 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

F474 Words in s. 221(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. 76(3)} (with art. 10, Sch. 1 para. 84)

F475 Words in s. 221(4) inserted (31.5.2002) by S.I. 2002/1240, reg. 9

F476 Words in s. 221(4) substituted (26.6.2017) by The Insolvency Amendment (EU 2015/848) Regulations 2017 (S.I. 2017/702), reg. 1, Sch. para. 13 (with regs. 3, 4)

Modifications etc. (not altering text)

C706 S. 221 applied (with modifications) by S.I. 1986/2142, arts. 1(2), 8(1), 12, 15

S. 221 applied (with modifications) by S.I. 1986/2142, arts. 1(2), 7, 15, Sch. 1 para. 2

S. 221 applied (with modifications) (1.11.1994) by S.I. 1994/2759, reg. 3, Sch. 3 para. 91A(4)

S. 221 applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 9(a), Sch. 5

S. 221 applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 10(1)(a), Sch. 6 para. 4

Ss. 220-223 applied (with modifications) (1.12.1994) by S.I. 1994/2421, arts. 7(1)(2), 9, Sch. 3 Pt. I

C707 S. 221 restricted (20.4.2003) by The Insurers (Reorganisation and Winding Up) Regulations 2003 (S.I. 2003/1102), reg. 4(1)(a) (with reg. 3)

C708 S. 221 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C709 S. 221(1) applied (10.8.2005) by The Insurers (Reorganisation and Winding Up) (Lloyd's) Regulations 2005 (S.I. 2005/1998), regs. 2(3), 29(2)

C710 S. 221(5)(b) extended (1.4.1992) by S.I. 1992/613, reg. 49(2)

C711 S. 221(5)(b) modified (6.4.2010) by The Community Infrastructure Levy Regulations 2010 (S.I. 2010/948), reg. 105(2)

C712 S. 221(5)(b) restricted (retrospective to 27.4.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), Sch. 10 para. 6(1)-(3)(4) (with ss. 2(2), 5(2))

Marginal Citations

M14 1981 c. 65.

M15 1985. c. 58.

222 Inability to pay debts: unpaid creditor for £750 or more. E+W+S

(1) An unregistered company is deemed (for the purposes of section 221) unable to pay its debts if there is a creditor, by assignment or otherwise, to whom the company is indebted in a sum exceeding £750 then due and—

(a) the creditor has served on the company, by leaving at its principal place of business, or by delivering to the secretary or some director, manager or principal officer of the company, or by otherwise serving in such manner as the court may approve or direct, a written demand in the prescribed form requiring the company to pay the sum due, and

(b) the company has for 3 weeks after the service of the demand neglected to pay the sum or to secure or compound for it to the creditor’s satisfaction.

(2) The money sum for the time being specified in subsection (1) is subject to increase or reduction by regulations under section 417 in Part XV; but no increase in the sum so specified affects any case in which the winding-up petition was presented before the coming into force of the increase.

Modifications etc. (not altering text)

C713 S. 222 applied with modifications by S.I. 1986/2421, arts. 1(2), 7, 15, Sch. 1 para. 3

ss. 220-223 applied (with modifications) (1.12.1994) by S.I. 1994/2421, arts. 7(1)(2), 9, Sch. 3, Pt. I

C714 S. 222 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

223 Inability to pay debts: debt remaining unsatisfed after action brought. E+W+S

An unregistered company is deemed (for the purposes of section 221) unable to pay its debts if an action or other proceeding has been instituted against any member for any debt or demand due, or claimed to be due, from the company, or from him in his character of member, and—

(a) notice in writing of the institution of the action or proceeding has been served on the company by leaving it at the company’s principal place of business (or by delivering it to the secretary, or some director, manager or principal officer of the company, or by otherwise serving it in such manner as the court may approve or direct), and

(b) the company has not within 3 weeks after service of the notice paid, secured or compounded for the debt or demand, or procured the action or proceeding to be stayed or sisted, or indemnified the defendant or defender to his reasonable satisfaction against the action or proceeding, and against all costs, damages and expenses to be incurred by him because of it.

Modifications etc. (not altering text)

C715 Ss. 220-223 applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 7(1)(2), art. 9, Sch. 3, Pt. I

s. 223 excluded (1.11.1994) by S.I. 1994/2759, reg. 3, Sch. 3 para. 91A(5)

224 Inability to pay debts: other cases. E+W+S

(1) An unregistered company is deemed (for purposes of section 221) unable to pay its debts—

(a) if in England and Wales execution or other process issued on a judgment, decree or order obtained in any court in favour of a creditor against the company, or any member of it as such, or any person authorised to be sued as nominal defendant on behalf of the company, is returned unsatisfied;

(b) if in Scotland the induciae of a charge for payment on an extract decree, or an extract registered bond, or an extract registered protest, have expired without payment being made;

(c) if in Northern Ireland a certificate of unenforceability has been granted in respect of any judgment, decree or order obtained as mentioned in paragraph (a);

(d) if it is otherwise proved to the satisfaction of the court that the company is unable to pay its debts as they fall due.

(2) An unregistered company is also deemed unable to pay its debts if it is proved to the satisfaction of the court that the value of the company’s assets is less than the amount of its liabilities, taking into account its contingent and prospective liabilities.

Modifications etc. (not altering text)

C716 S. 224 applied (with modifications) by S.I. 1994/2759, reg. 3, Sch. 3 para. 91A(6)

C717 S. 224 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

225 [F477 Company incorporated outside Great Britain] may be wound up though dissolved. E+W+S

[F478 (1)] Where a company incorporated outside Great Britain which has been carrying on business in Great Britain ceases to carry on business in Great Britain, it may be wound up as an unregistered company under this Act, notwithstanding that it has been dissolved or otherwise ceased to exist as a company under or by virtue of the laws of the country under which it was incorporated.

F479 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F477 Words in s. 225 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. 76(4)} (with art. 10, Sch. 1 para. 84)

F478 S. 225 renumbered as s. 225(1) and s. 225(2) inserted (31.5.2002) by S.I. 2002/1240, reg. 10

F479 S. 225(2) omitted (31.12.2020) by virtue of The Insolvency (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/146), reg. 1(3), Sch. para. 27 (with regs. 4, 5); 2020 c. 1, Sch. 5 para. 1(1)

Modifications etc. (not altering text)

C718 S. 225 applied (1.12.1994) by S.I. 1994/2421, art. 10(1)(b)

Ss. 225-229 applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 8(1)(2)(9), Sch. 4 Pt. I

226 Contributories in winding up of unregistered company. E+W+S

(1) In the event of an unregistered company being wound up, every person is deemed a contributory who is liable to pay or contribute to the payment of any debt or liability of the company, or to pay or contribute to the payment of any sum for the adjustment of the rights of members among themselves, or to pay or contribute to the payment of the expenses of winding up the company.

(2) Every contributory is liable to contribute to the company’s assets all sums due from him in respect of any such liability as is mentioned above.

(3) In the case of an unregistered company engaged in or formed for working mines within the stannaries, a past member is not liable to contribute to the assets if he has ceased to be a member for 2 years or more either before the mine ceased to be worked or before the date of the winding-up order.

(4) F480 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F480 S. 226(4) 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. 76(5)} (with art. 10, Sch. 1 para. 84)

Modifications etc. (not altering text)

C719 Ss. 225-229 applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 8(1)(2)(9), Sch. 4 Pt. I

C720 S. 226 excluded by S.I. 2001/1228, reg. 33C(2) (as inserted (21.12.2011) by The Open-Ended Investment Companies (Amendment) Regulations 2011 (S.I. 2011/3049), reg. 3(5) (with regs. 4, 10(1))

227 Power of court to stay, sist or restrain proceedings. E+W+S

The provisions of this Part with respect to staying, sisting or restraining actions and proceedings against a company at any time after the presentation of a petition for winding up and before the making of a winding-up order extend, in the case of an unregistered company, where the application to stay, sist or restrain is presented by a creditor, to actions and proceedings against any contributory of the company.

Modifications etc. (not altering text)

C721 Ss. 227-229 applied (1.12.1994) by S.I. 1994/2421, art. 10(1)(b)

ss. 225-229 applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 8(1)(2))(9), Sch. 4 Pt. I

C722 S. 227 excluded by S.I. 2001/1228, reg. 33C(2) (as inserted (21.12.2011) by The Open-Ended Investment Companies (Amendment) Regulations 2011 (S.I. 2011/3049), reg. 3(5) (with regs. 4, 10(1))

228 Actions stayed on winding-up order. E+W+S

Where an order has been made for winding up an unregistered company, no action or proceding shall be proceeded with or commenced against any contributory of the company in respect of any debt of the company, except by leave of the court, and subject to such terms as the court may impose.

Modifications etc. (not altering text)

C723 Ss. 227-229 applied (1.12.1994) by S.I. 1994/2421, art. 10(1)(b)

ss. 225-229 applied (with modifications) (1.12.1995) by S.I. 1994/2421, art. 8(1)(2)(9), Sch. 4 Pt. I

C724 S. 228 excluded by S.I. 2001/1228, reg. 33C(2) (as inserted (21.12.2011) by The Open-Ended Investment Companies (Amendment) Regulations 2011 (S.I. 2011/3049), reg. 3(5) (with regs. 4, 10(1))

229 Provisions of this Part to be cumulative. E+W+S

(1) The provisions of this Part with respect to unregistered companies are in addition to and not in restriction of any provisions in Part IV with respect to winding up companies by the court; and the court or liquidator may exercise any powers or do any act in the case of unregistered companies which might be exercised or done by it or him in winding up [F481 companies registered under the Companies Act 2006 in England and Wales or Scotland].

(2) F482 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F481 Words in s. 229(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. 76(6)(a)} (with art. 10, Sch. 1 para. 84)

F482 S. 229(2) 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. 76(6)(b)} (with art. 10, Sch. 1 para. 84)

Modifications etc. (not altering text)

C725 Ss. 227-229 applied (1.12.1994) by S.I. 1994/2421, art. 10(1)(b)

ss. 225-229 applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 8(1)(2)(9), Sch. 4 Pt. I

C726 S. 229 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

Part VI E+W+S Miscellaneous Provisions Applying to Companies Which are Insolvent or in Liquidation

Modifications etc. (not altering text)

C727 Pts. 1–7 (ss. 1–251) applied (with modifications) by S.I. 1989/1276, arts. 2, 3

Pt. 6 (ss. 230-246) modified (1.2.1993) by Friendly Societies Act 1992 (c. 40), s. 23, Sch. 10 Pt. I para. 1(a) (with ss. 7(5), 93(4)); S.I. 1993/16, art. 2, Sch.3 (as amended (13.3.2018) by The Small Business, Enterprise and Employment Act 2015 (Consequential Amendments, Savings and Transitional Provisions) Regulations 2018 (S.I. 2018/208), regs. 1(3), 3; and (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 12 para. 4 (with ss. 2(2), 5(2), 14(4)))

C728 Pt. 6 (ss. 230–246) extended with modifications by Building Societies Act 1986 (c. 53, SIF 16), ss. 54(3)(a)(5)(a), 90, 126(3), Sch. 15 (as amended (13.3.2018) by S.I. 2018/208, regs. 1(3), 2(2); and (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 12 para. 2 (with ss. 2(2), 5(2), 14(4)))

C729 Pt. 6 (ss. 230–246) modified by Company Directors Disqualification Act 1986 (c. 46, SIF 27), ss. 21(2), 25

Pt. 6 (ss. 230-246) applied (1.12.1994) by S.I. 1994/2421, art. 6(3)(b)

Pt. 6 (ss. 230-246) applied (1.12.1994) by S.I. 1994/2421, art. 10(2)(3)(6), Sch. 4 Pt. II

Pt. 6 (ss. 230-246) applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 8(4)(5)(8)(9)

Pt. 6 (ss. 230-246) applied (with modifications) (1.12.1997) by 1986 c. 53, Sch. 15A para. 1(1)(2)(a) (as inserted by 1997 c. 32, s. 39(2), Sch. 6); S.I. 1997/2668, art. 2, Sch. Pt. I(i); and as amended (13.3.2018) by The Small Business, Enterprise and Employment Act 2015 (Consequential Amendments, Savings and Transitional Provisions) Regulations 2018 (S.I. 2018/208), regs. 1(3), 2(3); and (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 12 para. 3 (with ss. 2(2), 5(2), 14(4)))

Pt. 6 (ss. 230-246) amended (1.12.2001) by S.I. 2001/3538, art. 2(1)

C730 First 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. (as amended (1.4.2013) by S.I. 2013/472, art. 1(1), Sch. 2 para. 117; and (13.3.2018) by S.I. 2018/208, regs. 1(3), 11)

C731 Pt. 6 applied (with modifications) in part (E.W.) (2.1.2013) by The Charitable Incorporated Organisations (Insolvency and Dissolution) Regulations 2012 (S.I. 2012/3013), reg. 1, Sch. para. 1(2)(a)(3)-(7) (as amended (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 3 para. 49(3) (with ss. 2(2), 5(2)); (7.7.2020) by S.I. 2020/710, regs. 1, 4 (with reg. 6) (which affecting legislation is revoked and this amendment reversed (13.8.2020) S.I. 2020/856, regs. 1(2), 2); and (13.8.2020 immediately after the coming into force of S.I. 2020/856, reg. 2) by S.I. 2020/856, regs. 1(3), 5 (with reg. 7))

C732 Pt. 6 applied (with modifications) (6.4.2014) by The Industrial and Provident Societies and Credit Unions (Arrangements, Reconstructions and Administration) Order 2014 (S.I. 2014/229), arts. 1, 4(a), Sch. 3 (as amended (13.3.2018) by S.I. 2018/208, regs. 1(3), 15(4)(a); (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 12 para. 8 (with ss. 2(2), 5(2), 14(4)); and (18.7.2020) by S.I. 2020/744, arts. 1, 8)

C733 Pt. 6 applied (with modifications) (S.) by S.S.I. 2001/128, reg. 4, Schs. 2, 3 (as amended (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 12 para. 7 (with ss. 2(2), 5(2), 14(4)))

C734 Pt. 6 modified (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), ss. 12, 15, 49(1) (with ss. 2(2), 5(2))

C735 Pt. 6 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), reg. 2, Sch. 1 para. 3 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4)

F483 Office-holders E+W+S

Textual Amendments

F483 Pt. VI amendment to earlier affecting provision S.I. 2021/716, reg. 5 (4.1.2024) by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 4

230 Holders of office to be qualified insolvency practitioners. E+W+S

(1) F484 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) Where an administrative receiver of a company is appointed, he must be a person who is so qualified.

(3) Where a company goes into liquidation, the liquidator must be a person who is so qualified.

(4) Where a provisional liquidator is appointed, he must be a person who is so qualified.

(5) Subsections (3) and (4) are without prejudice to any enactment under which the official receiver is to be, or may be, liquidator or provisional liquidator.

Textual Amendments

F484 S. 230(1) repealed (15.9.2003) by 2002 c. 40, ss. 248(3), 278, 279, Sch. 17 para. 19, Sch. 26 (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)

C736 S. 230 applied (with modifications) (1.12.1994) by S.I. 1994/2421, reg. 8(3)(9), Sch. 4 Pt. II para. 26

C737 S. 230 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

231 Appointment to office of two or more persons. E+W+S

(1) This section applies if an appointment or nomination of any person to the office of F485 . . . administrative receiver, liquidator or provisional liquidator—

(a) relates to more than one person, or

(b) has the effect that the office is to be held by more than one person.

(2) The appointment or nomination shall declare whether any act required or authorised under any enactment to be done by the F485 . . . administrative receiver, liquidator or provisional liquidator is to be done by all or any one or more of the persons for the time being holding the office in question.

Textual Amendments

F485 Words in s. 231(1)(2) repealed (15.9.2003) by 2002 c. 40, ss. 248(3), 278, 279, Sch. 17 para. 20, Sch. 26 (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)

C738 S. 231 applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 8(3)(9), Sch. 4 Pt. II para. 26

S. 231 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C739 S. 231 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C740 S. 231 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C741 Ss. 231-232 applied in part (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

232 Validity of office-holder’s acts. E+W+S

The acts of an individual as F486 . . . administrative receiver, liquidator or provisional liquidator of a company are valid notwithstanding any defect in his appointment, nomination or qualifications.

Textual Amendments

F486 Word in s. 232 repealed (15.9.2003) by 2002 c. 40, ss. 248(3), 278, 279, Sch. 17 para. 21, Sch. 26 (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)

C741 Ss. 231-232 applied in part (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C742 S. 232 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C743 S. 232 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C744 S. 232 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

Management by administrators, liquidators, etc. E+W+S

233 Supplies of gas, water, electricity, etc. E+W+S

(1) This section applies in the case of a company where—

[F487 (a) the company enters administration,]

(b) an administrative receiver is appointed, or

F488 (ba) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c) a voluntary arrangement [F489 approved under Part I], has taken effect, or

(d) the company goes into liquidation, or

(e) a provisional liquidator is appointed;

and “the office-holder” means the administrator, the administrative receiver, F490 ... the supervisor of the voluntary arrangement, the liquidator or the provisional liquidator, as the case may be.

(2) If a request is made by or with the concurrence of the office-holder for the giving, after the effective date, of any of the supplies mentioned in the next subsection, the supplier—

(a) may make it a condition of the giving of the supply that the office-holder personally guarantees the payment of any charges in respect of the supply, but

(b) shall not make it a condition of the giving of the supply, or do anything which has the effect of making it a condition of the giving of the supply, that any outstanding charges in respect of a supply given to the company before the effective date are paid.

(3) The supplies referred to in subsection (2) are—

[F491 (a) a supply of gas by a gas supplier within the meaning of Part I of the Gas Act 1986;]

[F492 (aa) a supply of gas by a person within paragraph 1 of Schedule 2A to the Gas Act 1986 (supply by landlords etc.);]

[F493 (b) a supply of electricity by an electricity supplier within the meaning of Part I of the Electricity Act 1989;]

[F494 (ba) a supply of electricity by a class of person within Class A (small suppliers) or Class B (resale) of Schedule 4 to the Electricity (Class Exemptions from the Requirement for a Licence) Order 2001 (S.I. 2001/3270);]

(c) a supply of water by [F495 a water undertaker] or, in Scotland, [F496 Scottish Water],

[F497 (ca) a supply of water by a water supply licensee within the meaning of the Water Industry Act 1991;

(cb) a supply of water by a water services provider within the meaning of the Water Services etc. (Scotland) Act 2005;

(cc) a supply of water by a person who has an interest in the premises to which the supply is given;]

[F498 (d) a supply of communications services by a provider of a public electronic communications service.]

[F499 (e) a supply of communications services by a person who carries on a business which includes giving such supplies;

(f) a supply of goods or services mentioned in subsection (3A) by a person who carries on a business which includes giving such supplies, where the supply is for the purpose of enabling or facilitating anything to be done by electronic means.]

[F500 (3A) The goods and services referred to in subsection (3)(f) are—

(a) point of sale terminals;

(b) computer hardware and software;

(c) information, advice and technical assistance in connection with the use of information technology;

(d) data storage and processing;

(e) website hosting.]

(4) “The effective date” for the purposes of this section is whichever is applicable of the following dates—

[F501 (a) the date on which the company entered administration]

(b) the date on which the administative receiver was appointed (or, if he was appointed in succession to another administrative receiver, the date on which the first of his predecessors was appointed),

F502 (ba) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c) the date on which the voluntary arrangement [F503 took effect],

(d) the date on which the company went into liquidation,

(e) the date on which the provisional liquidator was appointed.

(5) The following applies to expressions used in subsection (3)—

(a) F504 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) F505 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c) F506 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F507 (d) “communications services” do not include electronic communications services to the extent that they are used to broadcast or otherwise transmit programme services (within the meaning of the Communications Act 2003).]

Textual Amendments

F487 S. 233(1)(a) substituted (15.9.2003) by 2002 c. 40, ss. 248(3), 279, Sch. 17 para. 22(a) (with s. 249(1)-(3)(6)); S.I. 2003/2093, art. 2, Sch. 1 (subject to arts. 3-8 (as amended by S.I. 2003/2332, art. 2))

F488 S. 233(1)(ba) omitted (26.6.2020) by virtue of Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 3 para. 15(2)(a) (with ss. 2(2), 5(2))

F489 Words in s. 233(1)(c) inserted (1.1.2003) by 2000 c. 39, s. 1, Sch. 1 para. 8(2)(b); S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F490 Words in s. 233(1) omitted (26.6.2020) by virtue of Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 3 para. 15(2)(b) (with ss. 2(2), 5(2))

F491 S. 233(3)(a) substituted (1.3.1996) by 1995 c. 45, s. 16(1), Sch. 4 para. 14(1); S.I. 1996/218, art. 2

F492 S. 233(3)(aa) inserted (1.10.2015) by The Insolvency (Protection of Essential Supplies) Order 2015 (S.I. 2015/989), arts. 1(1), 2(2)(a)

F493 S. 233(3)(b) substituted (1.10.2001) by 2000 c. 27, s. 108, Sch. 6 para. 47(2)(a); S.I. 2001/3266, arts. 1(2), 2, Sch. (subject to arts. 3-20)

F494 S. 233(3)(ba) inserted (1.10.2015) by The Insolvency (Protection of Essential Supplies) Order 2015 (S.I. 2015/989), arts. 1(1), 2(2)(b)

F495 Words substituted by Water Act 1989 (c. 15, SIF 130), s. 190, Sch. 25 para. 78(1) (with ss. 58(7), 101(1), 141(6), 160(1)(2)(4), 163, 189(4)–(10), 193(1), Sch. 26 paras. 3(1)(2), 17, 40(4), 57(6), 58)

F496 Words in s. 233(3)(c) substituted (14.7.2004) by The Water Industry (Scotland) Act 2002 (Consequential Modifications) Order 2004 (S.I. 2004/1822), art. 2, Sch. Pt. 1 para. 14(a)

F497 S. 233(3)(ca)-(cc) inserted (1.10.2015) by The Insolvency (Protection of Essential Supplies) Order 2015 (S.I. 2015/989), arts. 1(1), 2(2)(c) (with art. 2(4))

F498 S. 233(3)(d) substituted (25.7.2003 for specified purposes, 29.12.2003 for specified purposes) by Communications Act 2003 (c. 21), ss. 406, 408, 411, Sch. 17 para. 82(a) (with Sch. 18); S.I. 2003/1900, arts. 1(2), 2(1), 3(1) (with art. 3(2) (as amended (8.12.2003) by 2003/3142, art. 1(3))); S.I. 2003/3142, art. 3(2) (with art. 11)

F499 S. 233(3)(e)(f) inserted (1.10.2015) by The Insolvency (Protection of Essential Supplies) Order 2015 (S.I. 2015/989), arts. 1(1), 2(2)(d)

F500 S. 233(3A) inserted (1.10.2015) by The Insolvency (Protection of Essential Supplies) Order 2015 (S.I. 2015/989), arts. 1(1), 2(3)

F501 S. 233(4)(a) substituted (15.9.2003) by 2002 c. 40, ss. 248(3), 279, Sch. 17 para. 22(b) (with s. 249(1)-(3)(6)); S.I. 2003/2093, art. 2, Sch. 1 (subject to arts. 3-8 (as amended by S.I. 2003/2332, art. 2))

F502 S. 233(4)(ba) omitted (26.6.2020) by virtue of Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 3 para. 15(3) (with ss. 2(2), 5(2))

F503 Words in s. 233(4)(c) substituted (1.1.2003) by 2000 c. 39, s. 1, Sch. 1 para. 8(3)(b); S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F504 S. 233(5)(a) repealed (1.3.1996) by 1995 c. 45, ss. 16(1), 17(5), Sch. 4 para. 14(2), Sch. 6; S.I. 1996/218, art. 2

F505 S. 233(5)(b) repealed (1.10.2001) by 2000 c. 27, s. 108, Sch. 6 para. 47(2)(b), Sch. 8; S.I. 2001/3266, arts. 1(2), 2, Sch. (subject to arts. 3-20)

F506 S. 233(5)(c) repealed (14.7.2004) by The Water Industry (Scotland) Act 2002 (Consequential Modifications) Order 2004 (S.I. 2004/1822), art. 2, Sch. Pt. 1 para. 14(b)

F507 S. 233(5)(d) substituted (25.7.2003 for specified purposes, 29.12.2003 for specified purposes) by Communications Act 2003 (c. 21), ss. 406, 408, 411, Sch. 17 para. 82(b) (with Sch. 18); S.I. 2003/1900, arts. 1(2), 2(1), 3(1) (with art. 3(2) (as amended (8.12.2003) by 2003/3142, art. 1(3))); S.I. 2003/3142, art. 3(2) (with art. 11)

Modifications etc. (not altering text)

C745 S. 233 applied (1.12.1994) by S.I. 1994/2421, art. 4(3)(a)

S. 233 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

C746 S. 233 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C747 S. 233 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 145, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 3

C748 S. 233: power to amend conferred (25.4.2013) by Enterprise and Regulatory Reform Act 2013 (c. 24), ss. 92(1), 103(1)(g)

C749 Ss. 233-237 applied (with modifications) (31.1.2019) by Technical and Further Education Act 2017 (c. 19), s. 47(2), Sch. 4; S.I. 2018/1161, reg. 3(d)

C750 Ss. 233-237 applied (with modifications) (31.1.2019) by Technical and Further Education Act 2017 (c. 19), s. 47(2), Sch. 3; S.I. 2018/1161, reg. 3(c)

C751 S. 233 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

C752 Ss. 233-237 applied (with modifications) (E.W.) (15.3.2024) by The Water Industry (Special Administration) Regulations 2024 (S.I. 2024/205), regs. 2(2), 5(1) (with reg. 64)

C753 S. 233(1)(4) modified (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(2), Sch. 3 (which reference to s. 233 in Sch. 3 of the modifying S.S.I. was omitted (1.10.2009) by virtue of S.S.I. 2009/310, reg. 4, Sch. 2 para. 1(b))

C754 S. 233(1)(4) modified (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(2), Sch. 3

[F508 233A Further protection of essential supplies E+W+S

(1) An insolvency-related term of a contract for the supply of essential goods or services to a company ceases to have effect if—

(a) the company enters administration, or

(b) a voluntary arrangement approved under Part 1 takes effect in relation to the company.

(2) An insolvency-related term of a contract does not cease to have effect by virtue of subsection (1) to the extent that—

(a) it provides for the contract or the supply to terminate, or any other thing to take place, because the company becomes subject to an insolvency procedure other than administration or a voluntary arrangement;

(b) it entitles a supplier to terminate the contract or the supply, or do any other thing, because the company becomes subject to an insolvency procedure other than administration or a voluntary arrangement; or

(c) it entitles a supplier to terminate the contract or the supply because of an event that occurs, or may occur, after the company enters administration or the voluntary arrangement takes effect.

(3) Where an insolvency-related term of a contract ceases to have effect under this section the supplier may—

(a) terminate the contract, if the condition in subsection (4) is met;

(b) terminate the supply, if the condition in subsection (5) is met.

(4) The condition in this subsection is that—

(a) the insolvency office-holder consents to the termination of the contract,

(b) the court grants permission for the termination of the contract, or

(c) any charges in respect of the supply that are incurred after the company entered administration or the voluntary arrangement took effect are not paid within the period of 28 days beginning with the day on which payment is due.

The court may grant permission under paragraph (b) only if satisfied that the continuation of the contract would cause the supplier hardship.

(5) The condition in this subsection is that—

(a) the supplier gives written notice to the insolvency office-holder that the supply will be terminated unless the office-holder personally guarantees the payment of any charges in respect of the continuation of the supply after the company entered administration or the voluntary arrangement took effect, and

(b) the insolvency office-holder does not give that guarantee within the period of 14 days beginning with the day the notice is received.

(6) For the purposes of securing that the interests of suppliers are protected, where—

(a) an insolvency-related term of a contract (the “original term”) ceases to have effect by virtue of subsection (1), and

(b) the company subsequently enters administration, or a voluntary arrangement subsequently has effect in relation to it,

the contract is treated for the purposes of subsections (1) to (5) as if, immediately before the subsequent administration is entered into or the subsequent voluntary arrangement takes effect, it included an insolvency-related term identical to the original term.

(7) A contract for the supply of essential goods or services is a contract for a supply mentioned in section 233(3).

(8) An insolvency-related term of a contract for the supply of essential goods or services to a company is a provision of the contract under which—

(a) the contract or the supply would terminate, or any other thing would take place, because the company enters administration or the voluntary arrangement takes effect,

(b) the supplier would be entitled to terminate the contract or the supply, or to do any other thing, because the company enters administration or the voluntary arrangement takes effect, or

(c) the supplier would be entitled to terminate the contract or the supply because of an event that occurred before the company enters administration or the voluntary arrangement takes effect.

(9) In this section “insolvency office-holder” means—

(a) in a case where a company enters administration, the administrator;

(b) in a case where a voluntary arrangement under Part 1 takes effect in relation to a company, the supervisor of the voluntary arrangement.

(10) Subsection (1) does not have effect in relation to a contract entered into before 1st October 2015.]

Textual Amendments

F508 S. 233A inserted (1.10.2015) by The Insolvency (Protection of Essential Supplies) Order 2015 (S.I. 2015/989), arts. 1(1), 4

Modifications etc. (not altering text)

C749 Ss. 233-237 applied (with modifications) (31.1.2019) by Technical and Further Education Act 2017 (c. 19), s. 47(2), Sch. 4; S.I. 2018/1161, reg. 3(d)

C750 Ss. 233-237 applied (with modifications) (31.1.2019) by Technical and Further Education Act 2017 (c. 19), s. 47(2), Sch. 3; S.I. 2018/1161, reg. 3(c)

C752 Ss. 233-237 applied (with modifications) (E.W.) (15.3.2024) by The Water Industry (Special Administration) Regulations 2024 (S.I. 2024/205), regs. 2(2), 5(1) (with reg. 64)

C755 S. 233A applied by S.I. 1994/2421, art. 4(3)(a) (as amended (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 12 para. 5 (with ss. 2(2), 5(2), 14(4)))

C756 S. 233A applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

[F509 233B Protection of supplies of goods and services E+W+S

(1) This section applies where a company becomes subject to a relevant insolvency procedure.

(2) A company becomes subject to a relevant insolvency procedure for the purposes of this section where—

(a) a moratorium under Part A1 comes into force for the company,

(b) the company enters administration,

(c) an administrative receiver of the company is appointed (otherwise than in succession to another administrative receiver),

(d) a voluntary arrangement approved under Part 1 takes effect in relation to the company,

(e) the company goes into liquidation,

(f) a provisional liquidator of the company is appointed (otherwise than in succession to another provisional liquidator), or

(g) a court order is made under section 901C(1) of the Companies Act 2006 in relation to the company (order summoning meeting relating to compromise or arrangement).

(3) A provision of a contract for the supply of goods or services to the company ceases to have effect when the company becomes subject to the relevant insolvency procedure if and to the extent that, under the provision—

(a) the contract or the supply would terminate, or any other thing would take place, because the company becomes subject to the relevant insolvency procedure, or

(b) the supplier would be entitled to terminate the contract or the supply, or to do any other thing, because the company becomes subject to the relevant insolvency procedure.

(4) Where—

(a) under a provision of a contract for the supply of goods or services to the company the supplier is entitled to terminate the contract or the supply because of an event occurring before the start of the insolvency period, and

(b) the entitlement arises before the start of that period,

the entitlement may not be exercised during that period.

(5) Where a provision of a contract ceases to have effect under subsection (3) or an entitlement under a provision of a contract is not exercisable under subsection (4), the supplier may terminate the contract if—

(a) in a case where the company has become subject to a relevant insolvency procedure as specified in subsection (2)(b), (c), (e) or (f), the office-holder consents to the termination of the contract,

(b) in any other case, the company consents to the termination of the contract, or

(c) the court is satisfied that the continuation of the contract would cause the supplier hardship and grants permission for the termination of the contract.

(6) Where a provision of a contract ceases to have effect under subsection (3) and the company becomes subject to a further relevant insolvency procedure, the supplier may terminate the contract in accordance with subsection (5)(a) to (c).

(7) The supplier shall not make it a condition of any supply of goods and services after the time when the company becomes subject to the relevant insolvency procedure, or do anything which has the effect of making it a condition of such a supply, that any outstanding charges in respect of a supply made to the company before that time are paid.

(8) In this section “the insolvency period”, in relation to a relevant insolvency procedure, means the period beginning when the company becomes subject to the relevant insolvency procedure and ending—

(a) in the case of a moratorium under Part A1, when the moratorium comes to an end,

(b) in the case of the company entering administration, when the appointment of the administrator ceases to have effect under—

(i) paragraphs 76 to 84 of Schedule B1, or

(ii) an order under section 901F of the Companies Act 2006,

(c) in the case of the appointment of an administrative receiver of the company, when the receiver or any successor to the receiver ceases to hold office without a successor being appointed,

(d) in the case of a voluntary arrangement approved under Part 1 taking effect in relation to the company, when the arrangement ceases to have effect,

(e) in the case of the company going into liquidation, when—

(i) the liquidator complies with section 94(2), 106(2) or 146(3) (duties relating to final account), or

(ii) the appointment of the liquidator ceases to have effect under an order under section 901F of the Companies Act 2006,

(f) in the case of the appointment of a provisional liquidator for the company, when the provisional liquidator or any successor to the provisional liquidator ceases to hold office without a successor being appointed, and

(g) in the case of the making of a court order under section 901C(1) of the Companies Act 2006 in relation to the company, when—

(i) an order made by the court under section 901F of that Act takes effect, or

(ii) the court decides not to make such an order.

(9) In this section “office-holder”, in relation to a company which has entered into an insolvency procedure as specified in subsection (2)(b), (c), (e) or (f), means the administrator, administrative receiver, liquidator or provisional liquidator respectively.

(10) Schedule 4ZZA provides for exclusions from the operation of this section.

Textual Amendments

F509 Ss. 233B, 233C inserted (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), ss. 14(1), 49(1) (with ss. 2(2), 5(2), 14(4))

Modifications etc. (not altering text)

C752 Ss. 233-237 applied (with modifications) (E.W.) (15.3.2024) by The Water Industry (Special Administration) Regulations 2024 (S.I. 2024/205), regs. 2(2), 5(1) (with reg. 64)

C757 S. 233B excluded (26.6.2020) by Corporate Insolvency and Governance Act 2020 (2020 c. 12), ss. 15, 49(1) (with ss. 2(2), 5(2))

C758 S. 233B applied by S.I. 1994/2421, art. 4(3)(a) (as amended) (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 12 para. 5 (with ss. 2(2), 5(2), 14(4))

233C Powers to amend section 233B and Schedule 4ZZA E+W+S

(1) The Secretary of State may by regulations omit any of paragraphs (a) to (g) of section 233B(2) (relevant insolvency procedures).

(2) The Secretary of State may by regulations amend Schedule 4ZZA so as to—

(a) remove or amend any exclusion from section 233B for the time being specified there, or

(b) add further exclusions from section 233B.

(3) In subsection (2), references to exclusions from section 233B are to circumstances in which section 233B, or any provision of that section, does not apply.

(4) The circumstances referred to in subsection (3) may be framed by reference to kinds of company, supplier, contract, goods or services or in any other way.

(5) Regulations under this section may make—

(a) different provision for different purposes;

(b) consequential provision;

(c) transitional and supplementary provision.

(6) Regulations under this section made by virtue of subsection (5) may in particular make provision amending this Act or any other enactment whenever passed or made (including, if paragraph 1(1) or (2) of Schedule 4ZZA is omitted, provision omitting section 233A or 233 respectively).

(7) Regulations under subsection (1) may not omit section 233B(2)(c) unless the Secretary of State has first consulted the Scottish Ministers.

(8) In this section “enactment” includes an Act of the Scottish Parliament and an instrument made under such an Act.

(9) Regulations under this section are to be made by statutory instrument.

(10) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.]

Textual Amendments

F509 Ss. 233B, 233C inserted (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), ss. 14(1), 49(1) (with ss. 2(2), 5(2), 14(4))

Modifications etc. (not altering text)

C752 Ss. 233-237 applied (with modifications) (E.W.) (15.3.2024) by The Water Industry (Special Administration) Regulations 2024 (S.I. 2024/205), regs. 2(2), 5(1) (with reg. 64)

234 Getting in the company’s property. E+W+S

(1) This section applies in the case of a company where—

[F510 (a) the company enters administration,]

(b) an administrative receiver is appointed, or

(c) the company goes into liquidation, or

(d) a provisional liquidator is appointed;

and “the office-holder” means the administrator, the administrative receiver, the liquidator or the provisional liquidator, as the case may be.

(2) Where any person has in his possession or control any property, books, papers or records to which the company appears to be entitled, the court may require that person forthwith (or within such period as the court may direct) to pay, deliver, convey, surrender or transfer the property, books, papers or records to the office-holder.

(3) Where the office-holder—

(a) seizes or disposes of any property which is not property of the company, and

(b) at the time of seizure or disposal believes, and has reasonable grounds for believing, that he is entitled (whether in pursuance of an order of the court or otherwise) to seize or dispose of that property,

the next subsection has effect.

(4) In that case the office-holder—

(a) is not liable to any person in respect of any loss or damage resulting from the seizure or disposal except in so far as that loss or damage is caused by the office-holder’s own negligence, and

(b) has a lien on the property, or the proceeds of its sale, for such expenses as were incurred in connection with the seizure or disposal.

Textual Amendments

F510 S. 234(1)(a) substituted (15.9.2003) by 2002 c. 40, ss. 248(3), 279, Sch. 17 para. 23 (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)

C749 Ss. 233-237 applied (with modifications) (31.1.2019) by Technical and Further Education Act 2017 (c. 19), s. 47(2), Sch. 4; S.I. 2018/1161, reg. 3(d)

C750 Ss. 233-237 applied (with modifications) (31.1.2019) by Technical and Further Education Act 2017 (c. 19), s. 47(2), Sch. 3; S.I. 2018/1161, reg. 3(c)

C752 Ss. 233-237 applied (with modifications) (E.W.) (15.3.2024) by The Water Industry (Special Administration) Regulations 2024 (S.I. 2024/205), regs. 2(2), 5(1) (with reg. 64)

C759 S. 234 applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 7(3), Sch. 3 Pt. II para. 9

S. 234 applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 8(3)(9), Sch. 4 Pt. II para. 27

C760 S. 234 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2 (as amended (1.10.2009) by S.S.I. 2009/310, reg. 3, Sch. 1 para. 1(a))

C761 S. 234 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C762 S. 234 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 145, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 3

C763 S. 234 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C764 S. 234 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37, Sch. 2 paras. 4-6 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

C765 S. 234 applied in part (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

235 Duty to co-operate with office-holder. E+W+S

(1) This section applies as does section 234; and it also applies, in the case of a company in respect of which a winding-up order has been made by the court in England and Wales, as if references to the office-holder included the official receiver, whether or not he is the liquidator.

(2) Each of the persons mentioned in the next subsection shall—

(a) give to the office-holder such information concerning the company and its promotion, formation, business, dealings, affairs or property as the office-holder may at any time after the effective date reasonably require, and

(b) attend on the office-holder at such times as the latter may reasonably require.

(3) The persons referred to above are—

(a) those who are or have at any time been officers of the company,

(b) those who have taken part in the formation of the company at any time within one year before the effective date,

(c) those who are in the employment of the company, or have been in its employment (including employment under a contract for services) within that year, and are in the office-holder’s opinion capable of giving information which he requires,

(d) those who are, or have within that year been, officers of, or in the employment (including employment under a contract for services) of, another company which is, or within that year was, an officer of the company in question, and

(e) in the case of a company being wound up by the court, any person who has acted as administrator, administrative receiver or liquidator of the company.

(4) For the purposes of subsections (2) and (3), “the effective date” is whichever is applicable of the following dates—

[F511 (a) the date on which the company entered administration,]

(b) the date on which the administrative receiver was appointed or, if he was appointed in succession to another administrative receiver, the date on which the first of his predecessors was appointed,

(c) the date on which the provisional liquidator was appointed, and

(d) the date on which the company went into liquidation.

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

Textual Amendments

F511 S. 235(4)(a) substituted (15.9.2003) by 2002 c. 40, ss. 248(3), 279, Sch. 17 para. 24 (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)

C749 Ss. 233-237 applied (with modifications) (31.1.2019) by Technical and Further Education Act 2017 (c. 19), s. 47(2), Sch. 4; S.I. 2018/1161, reg. 3(d)

C750 Ss. 233-237 applied (with modifications) (31.1.2019) by Technical and Further Education Act 2017 (c. 19), s. 47(2), Sch. 3; S.I. 2018/1161, reg. 3(c)

C752 Ss. 233-237 applied (with modifications) (E.W.) (15.3.2024) by The Water Industry (Special Administration) Regulations 2024 (S.I. 2024/205), regs. 2(2), 5(1) (with reg. 64)

C766 S. 235 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2 (as amended (1.10.2009) by S.S.I. 2009/310, reg. 3, Sch. 1 para. 1(b))

C767 S. 235 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C768 S. 235 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 145, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 3

C769 S. 235 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C770 S. 235 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

C771 S. 235 applied (18.7.2023) by The Relevant Licensee Nuclear Company Administration (England and Wales) Rules 2023 (S.I. 2023/712), rules 1(2)(a), 112 (with rule 2)

C772 S. 235 applied in part (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

236 Inquiry into company’s dealings, etc. E+W+S

(1) This section applies as does section 234; and it also applies in the case of a company in respect of which a winding-up order has been made by the court in England and Wales as if references to the office-holder included the official receiver, whether or not he is the liquidator.

(2) The court may, on the application of the office-holder, summon to appear before it—

(a) any officer of the company,

(b) any person known or suspected to have in his possession any property of the company or supposed to be indebted to the company, or

(c) any person whom the court thinks capable of giving information concerning the promotion, formation, business, dealings, affairs or property of the company.

(3) The court may require any such person as is mentioned in subsection (2)(a) to (c) to submit [F512 to the court] an account of his dealings with the company or to produce any books, papers or other records in his possession or under his control relating to the company or the matters mentioned in paragraph (c) of the subsection.

[F513 (3A)  An account submitted to the court under subsection (3) must be contained in—

(a) a witness statement verified by a statement of truth (in England and Wales), and

(b) an affidavit (in Scotland).]

(4) The following applies in a case where—

(a) a person without reasonable excuse fails to appear before the court when he is summoned to do so under this section, or

(b) there are reasonable grounds for believing that a person has absconded, or is about to abscond, with a view to avoiding his appearance before the court under this section.

(5) The court may, for the purpose of bringing that person and anything in his possession before the court, cause a warrant to be issued to a constable or prescribed officer of the court—

(a) for the arrest of that person, and

(b) for the seizure of any books, papers, records, money or goods in that person’s possession.

(6) The court may authorise a person arrested under such a warrant to be kept in custody, and anything seized under such a warrant to be held, in accordance with the rules, until that person is brought before the court under the warrant or until such other time as the court may order.

Textual Amendments

F512 Words in s. 236(3) substituted (6.4.2010) by The Legislative Reform (Insolvency) (Miscellaneous Provisions) Order 2010 (S.I. 2010/18), art. 5(6)(a)

F513 S. 236(3A) inserted (6.4.2010) by The Legislative Reform (Insolvency) (Miscellaneous Provisions) Order 2010 (S.I. 2010/18), art. 5(6)(b)

Modifications etc. (not altering text)

C749 Ss. 233-237 applied (with modifications) (31.1.2019) by Technical and Further Education Act 2017 (c. 19), s. 47(2), Sch. 4; S.I. 2018/1161, reg. 3(d)

C750 Ss. 233-237 applied (with modifications) (31.1.2019) by Technical and Further Education Act 2017 (c. 19), s. 47(2), Sch. 3; S.I. 2018/1161, reg. 3(c)

C752 Ss. 233-237 applied (with modifications) (E.W.) (15.3.2024) by The Water Industry (Special Administration) Regulations 2024 (S.I. 2024/205), regs. 2(2), 5(1) (with reg. 64)

C773 S. 236 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2 (as amended (1.10.2009) by S.S.I. 2009/310, reg. 3, Sch. 1 para. 1(c))

C774 S. 236 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C775 S. 236 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 145, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 3

C776 S. 236 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C777 S. 236 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

C778 Ss. 236-237 applied in part (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

237 Court’s enforcement powers under s. 236. E+W+S

(1) If it appears to the court, on consideration of any evidence obtained under section 236 or this section, that any person has in his possession any property of the company, the court may, on the application of the office-holder, order that person to deliver the whole or any part of the property to the office-holder at such time, in such manner and on such terms as the court thinks fit.

(2) If it appears to the court, on consideration of any evidence so obtained, that any person is indebted to the company, the court may, on the application of the office-holder, order that person to pay to the office holder,at such time and in such manner as the court may direct, the whole or any part of the amount due, whether in full discharge of the debt or otherwise, as the court thinks fit.

the court may, if it thinks fit, order that any person who if within the jurisdiction of the court would be liable to be summoned to appear before it under section 236 or this section shall be examined in any part of the United Kingdom where he may for the time being be, or in a place outside the United Kingdom.

(4) Any person who appears or is brought before the court under section 236 or this section may be examined on oath, either orally or (except in Scotland) by interrogatories, concerning the company or the matters mentioned in section 236(2)(c).

Modifications etc. (not altering text)

C749 Ss. 233-237 applied (with modifications) (31.1.2019) by Technical and Further Education Act 2017 (c. 19), s. 47(2), Sch. 4; S.I. 2018/1161, reg. 3(d)

C750 Ss. 233-237 applied (with modifications) (31.1.2019) by Technical and Further Education Act 2017 (c. 19), s. 47(2), Sch. 3; S.I. 2018/1161, reg. 3(c)

C752 Ss. 233-237 applied (with modifications) (E.W.) (15.3.2024) by The Water Industry (Special Administration) Regulations 2024 (S.I. 2024/205), regs. 2(2), 5(1) (with reg. 64)

C778 Ss. 236-237 applied in part (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C779 S. 237 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2 (as amended (1.10.2009) by S.S.I. 2009/310, reg. 3, Sch. 1 para. 1(c))

C780 S. 237 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C781 S. 237 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 145, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 3

C782 S. 237 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C783 S. 237 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

Adjustment of prior transactions (administration and liquidation) E+W+S

238 Transactions at an undervalue (England and Wales). E+W

(1) This section applies in the case of a company where—

[F514 (a) the company enters administration,]

(b) the company goes into liquidation;

and “the office-holder” means the administrator or the liquidator, as the case may be.

(2) Where the company has at a relevant time (defined in section 240) entered into a transaction with any person at an undervalue, the office-holder may apply to the court for an order under this section.

(3) Subject as follows, the court shall, on such an application, make such order as it thinks fit for restoring the position to what it would have been if the company had not entered into that transaction.

(4) For the purposes of this section and section 241, a company enters into a transaction with a person at an undervalue if—

(a) the company makes a gift to that person or otherwise enters into a transaction with that person on terms that provide for the company to receive no consideration, or

(b) the company enters into a transaction with that person for a consideration the value of which, in money or money’s worth, is significantly less than the value, in money or money’s worth, of the consideration provided by the company.

(5) The court shall not make an order under this section in respect of a transaction at an undervalue if it is satisfied—

(a) that the company which entered into the transaction did so in good faith and for the purpose of carrying on its business, and

(b) that at the time it did so there were reasonable grounds for believing that the transaction would benefit the company.

Textual Amendments

F514 S. 238(1)(a) substituted (15.9.2003) by 2002 c. 40, ss. 248(3), 279, Sch. 17 para. 25 (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)

C784 S. 238 excluded (25.4.1991) by Companies Act 1989 (c. 40), ss. 154, 155, 165(1)(a); S.I. 1991/878, art. 2, Sch. .

C785 S. 238 restricted (25.4.1991) by Companies Act 1989 (c. 40), s. 182(4), Sch. 22 para. 8(1)(a); S.I. 1991/878, art. 2, Sch. .

S. 238 restricted (31.3.1996) by 1995 c. 20, s. 110(1), Sch. 4 para. 3(5)(a); S.I. 1996/517, art. 3(2) (subject to transitional provisions and savings in arts. 4-6, Sch. 2) (which amending Act was itself repealed (1.4.1996) by 1995 c. 40, ss. 6(1), 7(2), Sch. 5 (with Sch. 3 paras. 3, 16))

S. 238 restricted (1.4.1996) by 1995 c. 43, ss. 44, 50(2), Sch. 2 para. 3(5)

S. 238 restricted (11.12.1999) by S.I. 1999/2979, reg. 17(1)(a)

S. 238 restricted (24.3.2003) by 2002 c. 29, ss. 427(1)-(5), 458(1)(3); S.I. 2003/333, art. 2, Sch. (subject to arts. 3-13 as amended by S.I. 2003/531)

C786 S. 238 applied (with modifications) (4.4.2006) by The Cross-Border Insolvency Regulations 2006 (S.I. 2006/1030), reg. 2, Sch. 1 Art. 23 paras. 1-3 (subject to Sch. 1 Art. 23 paras. 6-9)

C787 S. 238 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C788 S. 238 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 145, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 3

C789 S. 238 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C790 Ss. 238-241 applied (with modifications) (31.1.2019) by Technical and Further Education Act 2017 (c. 19), s. 47(2), Sch. 3; S.I. 2018/1161, reg. 3(c)

C791 Ss. 238-241 applied (with modifications) (31.1.2019) by Technical and Further Education Act 2017 (c. 19), s. 47(2), Sch. 4; S.I. 2018/1161, reg. 3(d)

C792 S. 238 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

C793 Ss. 238-241 applied (with modifications) (15.3.2024) by The Water Industry (Special Administration) Regulations 2024 (S.I. 2024/205), regs. 2(2), 5(1) (with reg. 64)

239 Preferences (England and Wales). E+W

(1) This section applies as does section 238.

(2) Where the company has at a relevant time (defined in the next section) given a preference to any person, the office-holder may apply to the court for an order under this section.

(3) Subject as follows, the court shall, on such an application, make such order as it thinks fit for restoring the position to what it would have been if the company had not given that preference.

(4) For the purposes of this section and section 241, a company gives a preference to a person if—

(a) that person is one of the company’s creditors or a surety or guarantor for any of the company’s debts or other liabilities, and

(b) the company does anything or suffers anything to be done which (in either case) has the effect of putting that person into a position which, in the event of the company going into insolvent liquidation, will be better than the position he would have been in if that thing had not been done.

(5) The court shall not make an order under this section in respect of a preference given to any person unless the company which gave the preference was influenced in deciding to give it by a desire to produce in relation to that person the effect mentioned in subsection (4)(b).

(6) A company which has given a preference to a person connected with the company (otherwise than by reason only of being its employee) at the time the preference was given is presumed, unless the contrary is shown, to have been influenced in deciding to give it by such a desire as is mentioned in subsection (5).

(7) The fact that something has been done in pursuance of the order of a court does not, without more, prevent the doing or suffering of that thing from constituting the giving of a preference.

Modifications etc. (not altering text)

C790 Ss. 238-241 applied (with modifications) (31.1.2019) by Technical and Further Education Act 2017 (c. 19), s. 47(2), Sch. 3; S.I. 2018/1161, reg. 3(c)

C791 Ss. 238-241 applied (with modifications) (31.1.2019) by Technical and Further Education Act 2017 (c. 19), s. 47(2), Sch. 4; S.I. 2018/1161, reg. 3(d)

C793 Ss. 238-241 applied (with modifications) (15.3.2024) by The Water Industry (Special Administration) Regulations 2024 (S.I. 2024/205), regs. 2(2), 5(1) (with reg. 64)

C794 S. 239 excluded (25.4.1991) by Companies Act 1989 (c. 40), ss. 154, 155, 165(1)(b); S.I. 1991/878, art. 2, Sch. .

C795 S. 239 restricted (25.4.1991) by Companies Act 1989 (c. 40), s. 182(4), Sch. 22 para. 8(1)(b); S.I. 1991/878, art. 2, Sch. .

S. 239 restricted (31.3.1996) by 1995 c. 20, s. 110(1), Sch. 4 para. 3(5)(a); S.I. 1996/517, art. 3(2) (subject to transitional provisions and savings in arts. 4-6, Sch. 2) (which amending Act was itself repealed (1.4.1996) by 1995 c. 40, ss. 6(1), 7(2), Sch. 5 (with Sch. 3 paras. 3, 16))

S. 239 restricted (1.4.1996) by 1995 c. 43, ss. 44, 50(2), Sch. 2 para. 3(5)

S. 239 restricted (11.12.1999) by S.I. 1999/2979, reg. 17(1)(b)

S. 239 restricted (24.3.2003) by 2002 c. 29, ss. 427(1)-(5), 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))

C796 S. 239 applied (with modifications) (4.4.2006) by The Cross-Border Insolvency Regulations 2006 (S.I. 2006/1030), reg. 2, Sch. 1 Art. 23 paras. 1-3 (subject to Sch. 1 Art. 23 paras. 6-9)

C797 S. 239 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C798 S. 239 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 145, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 3

C799 S. 239 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C800 S. 239 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

240 “Relevant time” under ss. 238, 239. E+W

(1) Subject to the next subsection, the time at which a company enters into a transaction at an undervalue or gives a preference is a relevant time if the transaction is entered into, or the preference given—

(a) in the case of a transaction at an undervalue or of a preference which is given to a person who is connected with the company (otherwise than by reason only of being its employee), at a time in the period of 2 years ending with the onset of insolvency (which expression is defined below),

(b) in the case of a preference which is not such a transaction and is not so given, at a time in the period of 6 months ending with the onset of insolvency,F515 . . .

[F516 (c) in either case, at a time between the making of an administration application in respect of the company and the making of an administration order on that application, and

(d) in either case, at a time between the filing with the court of a copy of notice of intention to appoint an administrator under paragraph 14 or 22 of Schedule B1 and the making of an appointment under that paragraph.]

(2) Where a company enters into a transaction at an undervalue or gives a preference at a time mentioned in subsection (1)(a) or (b), that time is not a relevant time for the purposes of section 238 or 239 unless the company—

(a) is at that time unable to pay its debts within the meaning of section 123 in Chapter VI of Part IV, or

(b) becomes unable to pay its debts within the meaning of that section in consequence of the transaction or preference;

but the requirements of this subsection are presumed to be satisfied, unless the contrary is shown, in relation to any transaction at an undervalue which is entered into by a company with a person who is connected with the company.

(3) For the purposes of subsection (1), the onset of insolvency is—

[F517 (a) in a case where section 238 or 239 applies by reason of an administrator of a company being appointed by administration order, the date on which the administration application is made,

(b) in a case where section 238 or 239 applies by reason of an administrator of a company being appointed under paragraph 14 or 22 of Schedule B1 following filing with the court of a copy of a notice of intention to appoint under that paragraph, the date on which the copy of the notice is filed,

(c) in a case where section 238 or 239 applies by reason of an administrator of a company being appointed otherwise than as mentioned in paragraph (a) or (b), the date on which the appointment takes effect,

(d) in a case where section 238 or 239 applies by reason of a company going into liquidation F518 ... at the time when the appointment of an administrator ceases to have effect, the date on which the company entered administration (or, if relevant, the date on which the application for the administration order was made or a copy of the notice of intention to appoint was filed), and

(e) in a case where section 238 or 239 applies by reason of a company going into liquidation at any other time, the date of the commencement of the winding up.]

Textual Amendments

F515 Word in s. 240(1)(b) repealed (15.9.2003) by 2002 c. 40, ss. 248(3), 278, 279, Sch. 17 para. 26(3), Sch. 26 (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))

F516 S. 240(1)(c)(d) substituted (15.9.2003) for s. 240(1)(c) by 2002 c. 40, ss. 248(3), 279, Sch. 17 para. 26(2) (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))

F517 S. 240(3)(a)-(e) substituted (15.9.2003) for s. 240(3)(a)(aa)(b) by 2002 c. 40, ss. 248(3), 279, Sch. 17 para. 26(4) (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))

F518 Words in s. 240(3)(d) omitted (31.12.2020) by virtue of The Insolvency (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/146), reg. 1(3), Sch. para. 28 (with regs. 4, 5); 2020 c. 1, Sch. 5 para. 1(1)

Modifications etc. (not altering text)

C790 Ss. 238-241 applied (with modifications) (31.1.2019) by Technical and Further Education Act 2017 (c. 19), s. 47(2), Sch. 3; S.I. 2018/1161, reg. 3(c)

C791 Ss. 238-241 applied (with modifications) (31.1.2019) by Technical and Further Education Act 2017 (c. 19), s. 47(2), Sch. 4; S.I. 2018/1161, reg. 3(d)

C793 Ss. 238-241 applied (with modifications) (15.3.2024) by The Water Industry (Special Administration) Regulations 2024 (S.I. 2024/205), regs. 2(2), 5(1) (with reg. 64)

C801 S. 240 applied (with modifications) (4.4.2006) by The Cross Border Insolvency Regulations 2006 (S.I. 2006/1030), reg. 2, Sch. 1 Art. 23 paras. 2, 3

C802 S. 240 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C803 S. 240 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 145, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 3

C804 S. 240 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C805 S. 240 modified (temp.) (retrospective to 27.4.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), Sch. 10 paras. 8(1)(2), 15 (with ss. 2(2), 5(2))

C806 S. 240 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

241 Orders under ss. 238, 239. E+W

(1) Without prejudice to the generality of sections 238(3) and 239(3), an order under either of those sections with respect to a transaction or preference entered into or given by a company may (subject to the next subsection)—

(a) require any property transferred as part of the transaction, or in connection with the giving of the preference, to be vested in the company,

(b) require any property to be so vested if it represents in any person’s hands the application either of the proceeds of sale of property so transferred or of money so transferred,

(c) release or discharge (in whole or in part) any security given by the company,

(d) require any person to pay, in respect of benefits received by him from the company, such sums to the office-holder as the court may direct,

(e) provide for any surety or guarantor whose obligations to any person were released or discharged (in whole or in part) under the transaction, or by the giving of the preference, to be under such new or revived obligations to that person as the court thinks appropriate,

(f) provide for security to be provided for the discharge of any obligation imposed by or arising under the order, for such an obligation to be charged on any property and for the security or charge to have the same priority as a security or charge released or discharged (in whole or in part) under the transaction or by the giving of the preference, and

(g) provide for the extent to which any person whose property is vested by the order in the company, or on whom obligations are imposed by the order, is to be able to prove in the winding up of the company for debts or other liabilities which arose from, or were released or discharged (in whole or in part) under or by, the transaction or the giving of the preference.

(2) An order under section 238 or 239 may affect the property of, or impose any obligation on, any person whether or not he is the person with whom the company in question entered into the transaction or (as the case may be) the person to whom the preference was given; but such an order—

(a) shall not prejudice any interest in property which was acquired from a person other than the company and was acquired [F519 in good faith and for value], or prejudice any interest deriving from such an interest, and

(b) shall not require a person who received a benefit from the transaction or preference [F519 in good faith and for value] to pay a sum to the office-holder, except where that person was a party to the transaction or the payment is to be in respect of a preference given to that person at a time when he was a creditor of the company.

F520 [(2A) Where a person has acquired an interest in property from a person other than the company in question, or has received a benefit from the transaction or preference, and at the time of that acquisition or receipt—

(a) he had notice of the relevant surrounding circumstances and of the relevant proceedings, or

(b) he was connected with, or was an associate of, either the company in question or the person with whom that company entered into the transaction or to whom that company gave the preference,

then, unless the contrary is shown, it shall be presumed for the purposes of paragraph (a) or (as the case may be) paragraph (b) of subsection (2) that the interest was acquired or the benefit was received otherwise than in good faith.]

[F521 (3) For the purposes of subsection (2A)(a), the relevant surrounding circumstances are (as the case may require)—

(a) the fact that the company in question entered into the transaction at an undervalue; or

(b) the circumstances which amounted to the giving of the preference by the company in question;

and subsections (3A) to (3C) have effect to determine whether, for those purposes, a person has notice of the relevant proceedings.

[F522 (3A) Where section 238 or 239 applies by reason of a company’s entering administration, a person has notice of the relevant proceedings if he has notice that—

(a) an administration application has been made,

(b) an administration order has been made,

(c) a copy of a notice of intention to appoint an administrator under paragraph 14 or 22 of Schedule B1 has been filed, or

(d) notice of the appointment of an administrator has been filed under paragraph 18 or 29 of that Schedule.]

[F523 (3B) Where section 238 or 239 applies by reason of a company’s going into liquidation at the time when the appointment of an administrator of the company ceases to have effect, a person has notice of the relevant proceedings if he has notice that—

(a) an administration application has been made,

(b) an administration order has been made,

(c) a copy of a notice of intention to appoint an administrator under paragraph 14 or 22 of Schedule B1 has been filed,

(d) notice of the appointment of an administrator has been filed under paragraph 18 or 29 of that Schedule, or

(e) the company has gone into liquidation.]

(3C) In a case where section 238 or 239 applies by reason of the company in question going into liquidation at any other time, a person has notice of the relevant proceedings if he has notice—

(a) where the company goes into liquidation on the making of a winding-up order, of the fact that the petition on which the winding-up order is made has been presented or of the fact that the company has gone into liquidation;

(b) in any other case, of the fact that the company has gone into liquidation.]

(4) The provisions of sections 238 to 241 apply without prejudice to the availability of any other remedy, even in relation to a transaction or preference which the company had no power to enter into or give.

Textual Amendments

F519 Words in s. 241(2)(a)(b) substituted (26.7.1994) by 1994 c. 12, ss. 1(1), 5, 6(2) (with ss. 5, 6(3))

F520 S. 241(2A) inserted (26.7.1994) by 1994 c. 12, ss. 1(2), 5, 6(2) (with ss. 5, 6(3))

F521 S. 241(3)(3A)(3B)(3C) substituted (26.7.1994) for s. 241(3) by 1994 c. 12, ss. 1(3), 5, 6(2) (with ss. 5, 6(3))

F522 S. 241(3A) substituted (15.9.2003) by 2002 c. 40, ss. 248(3), 279, Sch. 17 para. 27(2) (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))

F523 S. 241(3B) substituted (15.9.2003) by 2002 c. 40, ss. 248(3), 279, Sch. 17 para. 27(3) (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)

C790 Ss. 238-241 applied (with modifications) (31.1.2019) by Technical and Further Education Act 2017 (c. 19), s. 47(2), Sch. 3; S.I. 2018/1161, reg. 3(c)

C791 Ss. 238-241 applied (with modifications) (31.1.2019) by Technical and Further Education Act 2017 (c. 19), s. 47(2), Sch. 4; S.I. 2018/1161, reg. 3(d)

C793 Ss. 238-241 applied (with modifications) (15.3.2024) by The Water Industry (Special Administration) Regulations 2024 (S.I. 2024/205), regs. 2(2), 5(1) (with reg. 64)

C807 S. 241 applied (with modifications) (4.4.2006) by The Cross-Border Insolvency Regulations 2006 (S.I. 2006/1030), reg. 2, {Sch. 1 Art. 23 paras. 2, 3}

C808 S. 241 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C809 S. 241 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 145, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 3

C810 S. 241 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C811 S. 241 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

242 Gratuitous alienations (Scotland). S

(1) Where this subsection applies and—

(a) the winding up of a company has commenced, an alienation by the company is challengeable by—

(i) any creditor who is a creditor by virtue of a debt incurred on or before the date of such commencement, or

(ii) the liquidator;

(b) [F524 a company enters administration], an alienation by the company is challengeable by the administrator.

(2) Subsection (1) applies where—

(a) by the alienation, whether before or after 1st April 1986 (the coming into force of section75 of the M16 Bankruptcy (Scotland) Act 1985), any part of the company’s property is transferred or any claim or right of the company is discharged or renounced, and

(b) the alienation takes place on a relevant day.

(3) For the purposes of subsection (2)(b), the day on which an alienation takes place is the day on which it becomes completely effectual; and in that subsection “relevant day” means, if the alienation has the effect of favouring—

(a) a person who is an associate (within the meaning of the Bankruptcy (Scotland) Act [F525 2016]) of the company, a day not earlier than 5 years before the date on which—

(i) the winding up of the company commences, or

(ii) as the case may be, [F526 the company enters administration]; or

(b) any other person, a day not earlier than 2 years before that date.

(4) On a challenge being brought under subsection (1), the court shall grant decree of reduction or for such restoration of property to the company’s assets or other redress as may be appropriate; but the court shall not grant such a decree if the person seeking to uphold the alienation establishes—

(a) that immediately, or at any other time, after the alienation the company’s assets were greater than its liabilities, or

(b) that the alienation was made for adequate consideration, or

(c) that the alienation—

(i) was a birthday, Christmas or other conventional gift, or

(ii) was a gift made, for a charitable purpose, to a person who is not an associate of the company,

which, having regard to all the circumstances, it was reasonable for the company to make:

Provided that this subsection is without prejudice to any right or interest acquired in good faith and for value from or through the transferee in the alienation.

(5) In subsection (4) above, “charitable purpose” means any charitable, benevolent or philanthropic purpose, whether or not it is charitable within the meaning of any rule of law.

(6) For the purposes of the foregoing provisions of this section, an alienation in implementation of a prior obligation is deemed to be one for which there was no consideration or no adequate consideration to the extent that the prior obligation was undertaken for no consideration or no adequate consideration.

(7) A liquidator and an administrator have the same right as a creditor has under any rule of law to challenge an alienation of a company made for no consideration or no adequate consideration.

(8) This section applies to Scotland only.

Textual Amendments

F524 Words in s. 242(1)(b) substituted (15.9.2003) by 2002 c. 40, ss. 248(3), 279, Sch. 17 para. 28(2) (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))

F525 Word in s. 242(3)(a) substituted (30.11.2016) by The Bankruptcy (Scotland) Act 2016 (Consequential Provisions and Modifications) Order 2016 (S.I. 2016/1034), art. 1, Sch. 1 para. 4(5)

F526 Words in s. 242(3)(a)(ii) substituted (15.9.2003) by 2002 c. 40, ss. 248(3), 279, Sch. 17 para. 28(3) (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)

C812 S. 242 excluded (25.4.1991) by Companies Act 1989 (c. 40), ss. 154, 155, 165(2)(a); S.I. 1991/878, art. 2, Sch.

C813 S. 242 restricted (25.4.1991) by Companies Act 1989 (c. 40), s. 182(4), Sch. 22 para. 8(2)(a); S.I. 1991/878, art. 2, Sch.

S. 242 restricted (31.3.1996) by 1995 c. 20, s. 110, Sch. 4, para. 3(5)(a); S.I. 1996/517, art. 3(2) (subject to transitional provisions and savings in arts. 4-6, Sch. 2) (which amending Act was itself repealed (1.4.1996) by 1995 c. 40, ss. 6(1), 7(2), Sch. 5 (with Sch. 3 paras. 3, 6))

S. 242 restricted (1.4.1996) by 1995 c. 43, ss. 44, 50(2), Sch. 2 para. 3(5)

S. 242 restricted (11.12.1999) by S.I. 1999/2979, reg. 17(2)(a)

S. 242 restricted (24.3.2003) by 2002 c. 29, ss. 427(1)-(5), 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))

C814 S. 242 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

S. 242 applied (with modifications) (4.4.2006) by The Cross-Border Insolvency Regulations 2006 (S.I. 2006/1030), reg. 2, Sch. 1 Art. 23 paras. 1-3 (subject to Sch. 1 Art. 23 paras. 6-9)

C815 S. 242 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C816 S. 242 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 145, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 3

C817 S. 242 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C818 S. 242 modified (temp.) (retrospective to 27.4.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), Sch. 10 paras. 8(1)(2), 16 (with ss. 2(2), 5(2))

C819 S. 242 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

C820 Ss. 242-243 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

Marginal Citations

M16 1985 c. 66.

243 Unfair preferences (Scotland). S

(1) Subject to subsection (2) below, subsection (4) below applies to a transaction entered into by a company, whether before or after 1st April 1986, which has the effect of creating a preference in favour of a creditor to the prejudice of the general body of creditors, being a preference created not earlier than 6 months before the commencement of the winding up of the company or [F527 the company enters administration].

(2) Subsection (4) below does not apply to any of the following transactions—

(a) a transaction in the ordinary course of trade or business;

(b) a payment in cash for a debt which when it was paid had become payable, unless the transaction was collusive with the purpose of prejudicing the general body of creditors;

(c) a transaction whereby the parties to it undertake reciprocal obligations (whether the performance by the parties of their respective obligations occurs at the same time or at different times) unless the transaction was collusive as aforesaid;

(d) the granting of a mandate by a company authorising an arrestee to pay over the arrested funds or part thereof to the arrester where—

(i) there has been a decree for payment or a warrant for summary diligence, and

(ii) the decree or warrant has been preceded by an arrestment on the dependence of the action or followed by an arrestment in execution.

(3) For the purposes of subsection (1) above, the day on which a preference was created is the day on which the preference became completely effectual.

(4) A transaction to which this subsection applies is challengeable by—

(a) in the case of a winding up—

(i) any creditor who is a creditor by virtue of a debt incurred on or before the date of commencement of the winding up, or

(ii) the liquidator; and

(b) [F528 where the company has entered administration], the administrator.

(5) On a challenge being brought under subsection (4) above, the court, if satisfied that the transaction challenged is a transaction to which this section applies, shall grant decree of reduction or for such restoration of property to the company’s assets or other redress as may be appropriate;

Provided that this subsection is without prejudice to any right or interest acquired in good faith and for value from or through the creditor in whose favour the preference was created.

(6) A liquidator and an administrator have the same right as a creditor has under any rule of law to challenge a preference created by a debtor.

(7) This section applies to Scotland only.

Textual Amendments

F527 Words in s. 243(1) substituted (15.9.2003) by 2002 c. 40, ss. 248(3), 279, Sch. 17 para. 29(2) (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))

F528 Words in s. 243(4)(b) substituted (15.9.2003) by 2002 c. 40, ss. 248(3), 279, Sch. 17 para. 29(3) (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)

C820 Ss. 242-243 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C821 S. 243 excluded (25.4.1991) by Companies Act 1989 (c. 40), ss. 154, 155, 165(2)(a); S.I. 1991/878, art. 2, Sch.

C822 S. 243 restricted (25.4.1991) by Companies Act 1989 (c. 40), s. 182(4), Sch. 22 para. 8(2)(a); S.I. 1991/878, art. 2, Sch.

S. 243 restricted (31.3.1996) by 1995 c. 20, s. 110, Sch. 4 para. 3(5)(a); S.I. 1996/517, art. 3(2) (subject to transitional provisions and savings in arts. 4-6, Sch. 2) (which amending Act was itself repealed (1.4.1996) by 1995 c. 40, s. 6(1), 7(2), Sch. 5 (with Sch. 3 paras. 3, 16))

S. 243 restricted (1.4.1996) by 1995 c. 43, ss. 44, 50(2), Sch. 2 para. 3(5)

S. 243 restricted (11.12.1999) by S.I. 1999/2979, reg. 17(2)(a)

S. 243 restricted (24.3.2003) by 2002 c. 29, ss. 427(1)-(5), 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))

C823 S. 243 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

S. 243 applied (with modifications) (4.4.2006) by The Cross-Border Insolvency Regulations 2006 (S.I. 2006/1030), reg. 2, Sch. 1 Art. 23 paras. 1-3 (subject to Sch. 1 Art. 23 paras. 6-9)

C824 S. 243 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C825 S. 243 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 145, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 3

C826 S. 243 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C827 S. 243 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

C828 S. 243(1) modified (temp.) (retrospective to 27.4.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), Sch. 10 paras. 8(1)(2), 17 (with ss. 2(2), 5(2))

244 Extortionate credit transactions. E+W+S

(1) This section applies as does section 238, and where the company is, or has been, a party to a transaction for, or involving, the provision of credit to the company.

(2) The court may, on the application of the office-holder, make an order with respect to the transaction if the transaction is or was extortionate and was entered into in the period of 3 years ending with [F529 the day on which the company entered administration or went into liquidation].

(3) For the purposes of this section a transaction is extortionate if, having regard to the risk accepted by the person providing the credit—

(a) the terms of it are or were such as to require grossly exorbitant payments to be made (whether unconditionally or in certain contingencies) in respect of the provision of the credit, or

(b) it otherwise grossly contravened ordinary principles of fair dealing;

and it shall be presumed, unless the contrary is proved, that a transaction with respect to which an application is made under this section is or, as the case may be, was extortionate.

(4) An order under this section with respect to any transaction may contain such one or more of the following as the court thinks fit, that is to say—

(a) provision setting aside the whole or part of any obligation created by the transaction,

(b) provision otherwise varying the terms of the transaction or varying the terms on which any security for the purposes of the transaction is held,

(c) provision requiring any person who is or was a party to the transaction to pay to the office-holder any sums paid to that person, by virtue of the transaction, by the company,

(d) provision requiring any person to surrender to the office-holder any property held by him as security for the purposes of the transaction,

(e) provision directing accounts to be taken between any persons.

(5) The powers conferred by this section are exercisable in relation to any transaction concurrently with any powers exercisable in relation to that transaction as a transaction at an undervalue or under section 242 (gratuitious alienations in Scotland).

Textual Amendments

F529 Words in s. 244(2) substituted (15.9.2003) by 2002 c. 40, ss. 248(3), 279, Sch. 17 para. 30 (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)

C829 S. 244 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2 (as amended (1.10.2009) by S.S.I. 2009/310, reg. 3, Sch. 1 para. 1(d))

C830 S. 244 applied (with modifications) (4.4.2006) by The Cross-Border Insolvency Regulations 2006 (S.I. 2006/1030), reg. 2, Sch. 1 Art. 23 paras. 1-3 (subject to Sch. 1 Art. 23 paras. 6-9)

C831 S. 244 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C832 S. 244 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 145, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 3

C833 S. 244 applied (with modifications) (31.1.2019) by Technical and Further Education Act 2017 (c. 19), s. 47(2), Sch. 4; S.I. 2018/1161, reg. 3(d)

C834 S. 244 applied (with modifications) (31.1.2019) by Technical and Further Education Act 2017 (c. 19), s. 47(2), Sch. 3; S.I. 2018/1161, reg. 3(c)

C835 S. 244 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

C836 S. 244 applied in part (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C837 S. 244 applied (with modifications) (E.W.) (15.3.2024) by The Water Industry (Special Administration) Regulations 2024 (S.I. 2024/205), regs. 2(2), 5(1) (with reg. 64)

245 Avoidance of certain floating charges. E+W+S

(1) This section applies as does section 238, but applies to Scotland as well as to England and Wales.

(2) Subject as follows, a floating charge on the company’s undertaking or property created at a relevant time is invalid except to the extent of the aggregate of—

(a) the value of so much of the consideration for the creation of the charge as consists of money paid, or goods or services supplied, to the company at the same time as, or after, the creation of the charge,

(b) the value of so much of that consideration as consists of the discharge or reduction, at the same time as, or after, the creation of the charge, of any debt of the company, and

(c) the amount of such interest (if any) as is payable on the amount falling within paragraph (a) or (b) in pursuance of any agreement under which the money was so paid, the goods or services were so supplied or the debt was so discharged or reduced.

(3) Subject to the next subsection, the time at which a floating charge is created by a company is a relevant time for the purposes of this section if the charge is created—

(a) in the case of a charge which is created in favour of a person who is connected with the company, at a time in the period of 2 years ending with the onset of insolvency,

(b) in the case of a charge which is created in favour of any other person, at a time in the period of 12 months ending with the onset of insolvency,F530 . . .

[F531 (c) in either case, at a time between the making of an administration application in respect of the company and the making of an administration order on that application, or

(d) in either case, at a time between the filing with the court of a copy of notice of intention to appoint an administrator under paragraph 14 or 22 of Schedule B1 and the making of an appointment under that paragraph.]

(4) Where a company creates a floating charge at a time mentioned in subsection (3)(b) and the person in favour of whom the charge is created is not connected with the company, that time is not a relevant time for the purposes of this section unless the company—

(a) is at that time unable to pay its debts within the meaning of section 123 in Chapter VI of Part IV, or

(b) becomes unable to pay its debts within the meaning of that section in consequence of the transaction under which the charge is created.

(5) For the purposes of subsection (3), the onset of insolvency is—

[F532 (a) in a case where this section applies by reason of an administrator of a company being appointed by administration order, the date on which the administration application is made,

(b) in a case where this section applies by reason of an administrator of a company being appointed under paragraph 14 or 22 of Schedule B1 following filing with the court of a copy of notice of intention to appoint under that paragraph, the date on which the copy of the notice is filed,

(c) in a case where this section applies by reason of an administrator of a company being appointed otherwise than as mentioned in paragraph (a) or (b), the date on which the appointment takes effect, and

(d) in a case where this section applies by reason of a company going into liquidation, the date of the commencement of the winding up.]

(6) For the purposes of subsection (2)(a) the value of any goods or services supplied by way of consideration for a floating charge is the amount in money which at the time they were supplied could reasonably have been expected to be obtained for supplying the goods or services in the ordinary course of business and on the same terms (apart from the consideration) as those on which they were supplied to the company.

Textual Amendments

F530 Word in s. 245(3)(b) repealed (15.9.2003) by 2002 c. 40, ss. 248(3), 278, 279, Sch. 17 para. 31(2), Sch. 26 (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))

F531 S. 245(3)(c)(d) substituted (15.9.2003) for s. 245(3)(c) by 2002 c. 40, ss. 248, 279, Sch. 17 para. 31(3) (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))

F532 S. 245(5)(a)-(d) substituted (15.9.2003) for s. 245(5)(a)(b) by 2002 c. 40, ss. 248(3), 279, Sch. 17 para. 31(4) (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)

C838 S. 245 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(1), Sch. 2

S. 245 applied (with modifications) (4.4.2006) by The Cross-Border Insolvency Regulations 2006 (S.I. 2006/1030), reg. 2, Sch. 1 Art. 23 paras. 1-3 (subject to Sch. 1 Art. 23 paras. 6-9)

C839 S. 245 excluded (26.12.2003) by The Financial Collateral Arrangements (No. 2) Regulations 2003 (S.I. 2003/3226), reg. 10(5)

C840 S. 245 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C841 S. 245 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 145, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 3

C842 S. 245 excluded by The Financial Market and Insolvency (Settlement Finality) Regulations 1999 (S.I. 1999/2979), reg. 16(3) (as amended (2.2.2006) by The Financial Markets and Insolvency (Settlement Finality) (Amendment) Regulations 2006 (S.I. 2006/50), reg. 2(8)(10) and as amended (1.10.2009) by The Financial Markets and Insolvency (Settlement Finality) (Amendment) Regulations 2009 (S.I. 2009/1972), reg. 6(a))

C843 S. 245 modified (temp.) (retrospective to 27.4.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), Sch. 10 paras. 8(1)(2), 18 (with ss. 2(2), 5(2))

C844 S. 245 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

C845 S. 245 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

C846 S. 245 applied (with modifications) (E.W.) (15.3.2024) by The Water Industry (Special Administration) Regulations 2024 (S.I. 2024/205), regs. 2(2), 5(1), 47 (with reg. 64)

246 Unenforceability of liens on books, etc. E+W

(1) This section applies in the case of a company where—

[F533 (a) the company enters administration,]

(b) the company goes into liquidation, or

(c) a provisional liquidator is appointed;

and “the office-holder” means the administrator, the liquidator or the provisional liquidator, as the case may be.

(2) Subject as follows, a lien or other right to retain possession of any of the books, papers or other records of the company is unenforceable to the extent that its enforcement would deny possession of any books, papers or other records to the office-holder.

(3) This does not apply to a lien on documents which give a title to property and are held as such.

Textual Amendments

F533 S. 246(1)(a) substituted (15.9.2003) by 2002 c. 40, ss. 248(3), 279, Sch. 17 para. 32 (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)

C847 S. 246 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C848 S. 246 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 145, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 3

C849 S. 246 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C850 S. 246 applied (with modifications) (31.1.2019) by Technical and Further Education Act 2017 (c. 19), s. 47(2), Sch. 3; S.I. 2018/1161, reg. 3(c)

C851 S. 246 applied (with modifications) (31.1.2019) by Technical and Further Education Act 2017 (c. 19), s. 47(2), Sch. 4; S.I. 2018/1161, reg. 3(d)

C852 S. 246 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

C853 S. 246 applied (with modifications) (15.3.2024) by The Water Industry (Special Administration) Regulations 2024 (S.I. 2024/205), regs. 2(2), 5(1) (with reg. 64)

[F534 Administration: penalisation of directors etc E+W+S

Textual Amendments

F534 Ss. 246ZA-246ZC and cross-heading inserted (1.10.2015) by Small Business, Enterprise and Employment Act 2015 (c. 26), ss. 117(2), 164(1); S.I. 2015/1689, reg. 2(j) (with Sch. para. 15)

246ZA Fraudulent trading: administration E+W+S

(1) If while a company is in administration it appears that any business of the company has been carried on with intent to defraud creditors of the company or creditors of any other person, or for any fraudulent purpose, the following has effect.

(2) The court, on the application of the administrator, may declare that any persons who were knowingly parties to the carrying on of the business in the manner mentioned in subsection (1) are to be liable to make such contributions (if any) to the company's assets as the court thinks proper.

Modifications etc. (not altering text)

C854 Ss. 246ZA-246ZD applied (with modifications) by 2009 c. 1, s. 145 Table 2 (as amended) (7.4.2017) by The Deregulation Act 2015, the Small Business, Enterprise and Employment Act 2015 and the Insolvency (Amendment) Act (Northern Ireland) 2016 (Consequential Amendments and Transitional Provisions) Regulations 2017 (S.I. 2017/400), regs. 1(2), 5(10)

C855 Ss. 246ZA-246ZC applied (with modifications) (31.1.2019) by Technical and Further Education Act 2017 (c. 19), s. 47(2), Sch. 4; S.I. 2018/1161, reg. 3(d)

C856 Ss. 246ZA-246ZC applied (with modifications) (31.1.2019) by Technical and Further Education Act 2017 (c. 19), s. 47(2), Sch. 3; S.I. 2018/1161, reg. 3(c)

C857 Ss. 246ZA-246ZC applied (with modifications) (E.W.) (15.3.2024) by The Water Industry (Special Administration) Regulations 2024 (S.I. 2024/205), regs. 2(2), 5(1) (with reg. 64)

246ZB Wrongful trading: administration E+W+S

(1) Subject to subsection (3), if while a company is in administration it appears that subsection (2) applies in relation to a person who is or has been a director of the company, the court, on the application of the administrator, may declare that that person is to be liable to make such contribution (if any) to the company's assets as the court thinks proper.

(2) This subsection applies in relation to a person if—

(a) the company has entered insolvent administration,

(b) at some time before the company entered administration, that person knew or ought to have concluded that there was no reasonable prospect that the company would avoid entering insolvent administration or going into insolvent liquidation, and

(c) the person was a director of the company at that time.

(3) The court must not make a declaration under this section with respect to any person if it is satisfied that, after the condition specified in subsection (2)(b) was first satisfied in relation to the person, the person took every step with a view to minimising the potential loss to the company's creditors as (on the assumption that the person had knowledge of the matter mentioned in subsection (2)(b)) the person ought to have taken.

(4) For the purposes of subsections (2) and (3), the facts which a director of a company ought to know or ascertain, the conclusions which the director ought to reach and the steps which the director ought to take are those which would be known or ascertained, or reached or taken, by a reasonably diligent person having both—

(a) the general knowledge, skill and experience that may reasonably be expected of a person carrying out the same functions as are carried out by that director in relation to the company, and

(b) the general knowledge, skill and experience that that director has.

(5) The reference in subsection (4) to the functions carried out in relation to a company by a director of the company includes any functions which the director does not carry out but which have been entrusted to the director.

(6) For the purposes of this section—

(a) a company enters insolvent administration if it enters administration at a time when its assets are insufficient for the payment of its debts and other liabilities and the expenses of the administration;

(b) a company goes into insolvent liquidation if it goes into liquidation at a time when its assets are insufficient for the payment of its debts and other liabilities and the expenses of the winding up.

(7) In this section “director” includes shadow director.

(8) This section is without prejudice to section 246ZA.

Modifications etc. (not altering text)

C854 Ss. 246ZA-246ZD applied (with modifications) by 2009 c. 1, s. 145 Table 2 (as amended) (7.4.2017) by The Deregulation Act 2015, the Small Business, Enterprise and Employment Act 2015 and the Insolvency (Amendment) Act (Northern Ireland) 2016 (Consequential Amendments and Transitional Provisions) Regulations 2017 (S.I. 2017/400), regs. 1(2), 5(10)

C855 Ss. 246ZA-246ZC applied (with modifications) (31.1.2019) by Technical and Further Education Act 2017 (c. 19), s. 47(2), Sch. 4; S.I. 2018/1161, reg. 3(d)

C856 Ss. 246ZA-246ZC applied (with modifications) (31.1.2019) by Technical and Further Education Act 2017 (c. 19), s. 47(2), Sch. 3; S.I. 2018/1161, reg. 3(c)

C857 Ss. 246ZA-246ZC applied (with modifications) (E.W.) (15.3.2024) by The Water Industry (Special Administration) Regulations 2024 (S.I. 2024/205), regs. 2(2), 5(1) (with reg. 64)

C858 S. 246ZB modified (26.11.2020) by The Corporate Insolvency and Governance Act 2020 (Coronavirus) (Suspension of Liability for Wrongful Trading and Extension of the Relevant Period) Regulations 2020 (S.I. 2020/1349), regs. 1, 2(1)(2) (with reg. 2(3)-(9))

246ZC Proceedings under section 246ZA or 246ZB E+W+S

Section 215 applies for the purposes of an application under section 246ZA or 246ZB as it applies for the purposes of an application under section 213 but as if the reference in subsection (1) of section 215 to the liquidator was a reference to the administrator.]

Modifications etc. (not altering text)

C854 Ss. 246ZA-246ZD applied (with modifications) by 2009 c. 1, s. 145 Table 2 (as amended) (7.4.2017) by The Deregulation Act 2015, the Small Business, Enterprise and Employment Act 2015 and the Insolvency (Amendment) Act (Northern Ireland) 2016 (Consequential Amendments and Transitional Provisions) Regulations 2017 (S.I. 2017/400), regs. 1(2), 5(10)

C855 Ss. 246ZA-246ZC applied (with modifications) (31.1.2019) by Technical and Further Education Act 2017 (c. 19), s. 47(2), Sch. 4; S.I. 2018/1161, reg. 3(d)

C856 Ss. 246ZA-246ZC applied (with modifications) (31.1.2019) by Technical and Further Education Act 2017 (c. 19), s. 47(2), Sch. 3; S.I. 2018/1161, reg. 3(c)

C857 Ss. 246ZA-246ZC applied (with modifications) (E.W.) (15.3.2024) by The Water Industry (Special Administration) Regulations 2024 (S.I. 2024/205), regs. 2(2), 5(1) (with reg. 64)

[F535 Power to assign certain causes of action E+W+S

Textual Amendments

F535 S. 246ZD and cross-heading inserted (1.10.2015) by Small Business, Enterprise and Employment Act 2015 (c. 26), ss. 118, 164(1); S.I. 2015/1689, reg. 2(j) (with Sch. para. 16)

246ZD Power to assign E+W+S

(1) This section applies in the case of a company where—

(a) the company enters administration, or

(b) the company goes into liquidation;

and “the office-holder” means the administrator or the liquidator, as the case may be.

(2) The office-holder may assign a right of action (including the proceeds of an action) arising under [F536 or by virtue of] any of the following—

[F537 (za) section A43 (challenges to monitor remuneration in subsequent insolvency proceedings);]

(a) section 213 or 246ZA (fraudulent trading);

(b) section 214 or 246ZB (wrongful trading);

(c) section 238 (transactions at an undervalue (England and Wales));

(d) section 239 (preferences (England and Wales));

(e) section 242 (gratuitous alienations (Scotland));

(f) section 243 (unfair preferences (Scotland));

(g) section 244 (extortionate credit transactions).]

Textual Amendments

F536 Words in s. 246ZD(2) inserted (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 3 para. 16(a) (with ss. 2(2), 5(2))

F537 S. 246ZD(2)(za) inserted (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 3 para. 16(b) (with ss. 2(2), 5(2))

Modifications etc. (not altering text)

C854 Ss. 246ZA-246ZD applied (with modifications) by 2009 c. 1, s. 145 Table 2 (as amended) (7.4.2017) by The Deregulation Act 2015, the Small Business, Enterprise and Employment Act 2015 and the Insolvency (Amendment) Act (Northern Ireland) 2016 (Consequential Amendments and Transitional Provisions) Regulations 2017 (S.I. 2017/400), regs. 1(2), 5(10)

C859 S. 246ZD applied (with modifications) by 2009 c. 1, s. 103 (as amended) (7.4.2017) by The Deregulation Act 2015, the Small Business, Enterprise and Employment Act 2015 and the Insolvency (Amendment) Act (Northern Ireland) 2016 (Consequential Amendments and Transitional Provisions) Regulations 2017 (S.I. 2017/400), regs. 1(2), 5(4)

C860 S. 246ZD applied (with modifications) (31.1.2019) by Technical and Further Education Act 2017 (c. 19), s. 47(2), Sch. 4; S.I. 2018/1161, reg. 3(d)

C861 S. 246ZD applied (with modifications) (31.1.2019) by Technical and Further Education Act 2017 (c. 19), s. 47(2), Sch. 3; S.I. 2018/1161, reg. 3(c)

C862 S. 246ZD applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

C863 S. 246ZD applied (with modifications) (E.W.) (15.3.2024) by The Water Industry (Special Administration) Regulations 2024 (S.I. 2024/205), regs. 2(2), 5(1) (with reg. 64)

[F538 Decisions by creditors and contributories E+W+S

Textual Amendments

F538 Ss. 246ZE-246ZG and cross-heading inserted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), ss. 122(2), 164(1); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(a) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(a) (with reg. 5)

246ZE Decisions by creditors and contributories: general E+W+S

(1) This section applies where, for the purposes of this Group of Parts, a person (“P”) seeks a decision about any matter from a company's creditors or contributories.

(2) The decision may be made by any qualifying decision procedure P thinks fit, except that it may not be made by a creditors' meeting or (as the case may be) a contributories' meeting unless subsection (3) applies.

(3) This subsection applies if at least the minimum number of creditors or (as the case may be) contributories make a request to P in writing that the decision be made by a creditors' meeting or (as the case may be) a contributories' meeting.

(4) If subsection (3) applies P must summon a creditors' meeting or (as the case may be) a contributories' meeting.

(5) Subsection (2) is subject to any provision of this Act, the rules or any other legislation, or any order of the court—

(a) requiring a decision to be made, or prohibiting a decision from being made, by a particular qualifying decision procedure (other than a creditors' meeting or a contributories' meeting);

(b) permitting or requiring a decision to be made by a creditors' meeting or a contributories' meeting.

(6) Section 246ZF provides that in certain cases the deemed consent procedure may be used instead of a qualifying decision procedure.

(7) For the purposes of subsection (3) the “minimum number” of creditors or contributories is any of the following—

(a) 10% in value of the creditors or contributories;

(b) 10% in number of the creditors or contributories;

(c) 10 creditors or contributories.

(8) The references in subsection (7) to creditors are to creditors of any class, even where a decision is sought only from creditors of a particular class.

(9) In this section references to a meeting are to a meeting where the creditors or (as the case may be) contributories are invited to be present together at the same place (whether or not it is possible to attend the meeting without being present at that place).

(10) Except as provided by subsection (8), references in this section to creditors include creditors of a particular class.

(11) In this Group of Parts “qualifying decision procedure” means a procedure prescribed or authorised under paragraph 8A of Schedule 8.

Modifications etc. (not altering text)

C864 Ss. 246ZE, 246ZF modified by The Insolvent Partnerships Order 1994 (S.I. 1994/2421), Sch. 7A (as inserted (6.4.2017) by The Deregulation Act 2015 and Small Business, Enterprise and Employment Act 2015 (Consequential Amendments) (Savings) Regulations 2017 (S.I. 2017/540), reg. 1, Sch. 2 para. 10 (with reg. 4))

246ZF Deemed consent procedure E+W+S

(1) The deemed consent procedure may be used instead of a qualifying decision procedure where a company's creditors or contributories are to make a decision about any matter, unless—

(a) a decision about the matter is required by virtue of this Act, the rules, or any other legislation to be made by a qualifying decision procedure, or

(b) the court orders that a decision about the matter is to be made by a qualifying decision procedure.

(2) If the rules provide for a company's creditors or contributories to make a decision about the remuneration of any person, they must provide that the decision is to be made by a qualifying decision procedure.

(3) The deemed consent procedure is that the relevant creditors (other than opted-out creditors) or (as the case may be) the relevant contributories are given notice of—

(a) the matter about which they are to make a decision,

(b) the decision that the person giving the notice proposes should be made (the “proposed decision”),

(c) the effect of subsections (4) and (5), and

(d) the procedure for objecting to the proposed decision.

(4) If less than the appropriate number of relevant creditors or (as the case may be) relevant contributories object to the proposed decision in accordance with the procedure set out in the notice, the creditors or (as the case may be) the contributories are to be treated as having made the proposed decision.

(5) Otherwise—

(a) the creditors or (as the case may be) the contributories are to be treated as not having made a decision about the matter in question, and

(b) if a decision about that matter is again sought from the creditors or (as the case may be) the contributories, it must be sought using a qualifying decision procedure.

(6) For the purposes of subsection (4) the “appropriate number” of relevant creditors or relevant contributories is 10% in value of those creditors or contributories.

(7) “Relevant creditors” means the creditors who, if the decision were to be made by a qualifying decision procedure, would be entitled to vote in the procedure.

(8) “Relevant contributories” means the contributories who, if the decision were to be made by a qualifying decision procedure, would be entitled to vote in the procedure.

(9) In this section references to creditors include creditors of a particular class.

(10) The rules may make further provision about the deemed consent procedure.

Modifications etc. (not altering text)

C864 Ss. 246ZE, 246ZF modified by The Insolvent Partnerships Order 1994 (S.I. 1994/2421), Sch. 7A (as inserted (6.4.2017) by The Deregulation Act 2015 and Small Business, Enterprise and Employment Act 2015 (Consequential Amendments) (Savings) Regulations 2017 (S.I. 2017/540), reg. 1, Sch. 2 para. 10 (with reg. 4))

C865 S. 246ZF modified (S.) (6.4.2019) by The Insolvency (Scotland) (Company Voluntary Arrangements and Administration) Rules 2018 (S.I. 2018/1082), rules 1, 5.7

246ZG Power to amend sections 246ZE and 246ZF E+W+S

(1) The Secretary of State may by regulations amend section 246ZE so as to change the definition of—

(a) the minimum number of creditors;

(b) the minimum number of contributories.

(2) The Secretary of State may by regulations amend section 246ZF so as to change the definition of—

(a) the appropriate number of relevant creditors;

(b) the appropriate number of relevant contributories.

(3) Regulations under this section may define the minimum number or the appropriate number by reference to any one or more of—

(a) a proportion in value,

(b) a proportion in number,

(c) an absolute number,

and the definition may include alternative, cumulative or relative requirements.

(4) Regulations under subsection (1) may define the minimum number of creditors or contributories by reference to all creditors or contributories, or by reference to creditors or contributories of a particular description.

(5) Regulations under this section may make provision that will result in section 246ZE or 246ZF having different definitions for different cases, including—

(a) for creditors and for contributories,

(b) for different kinds of decisions.

(6) Regulations under this section may make transitional provision.

(7) The power of the Secretary of State to make regulations under this section is exercisable by statutory instrument.

(8) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.]

E+W+S

[F539 Remote attendance at meetings E+W+S

Textual Amendments

F539 Ss. 246A, 246B and cross-headings inserted (6.4.2010) by The Legislative Reform (Insolvency) (Miscellaneous Provisions) Order 2010 (S.I. 2010/18), art. 3(1)

246A Remote attendance at meetings E+W+S

(1) Subject to subsection (2), this section [F540 applies to any meeting of the members of a company summoned by the office-holder under this Act or the rules, other than a meeting of the members of the company in a members' voluntary winding up.]

(2) [F541 This section does not apply where—

(a) a company is being wound up in Scotland, or

(b) a receiver is appointed under section 51 in Chapter 2 of Part 3.]

(3) Where the person summoning a meeting (“the convener”) considers it appropriate, the meeting may be conducted and held in such a way that persons who are not present together at the same place may attend it.

(4) Where a meeting is conducted and held in the manner referred to in subsection (3), a person attends the meeting if that person is able to exercise any rights which that person may have to speak and vote at the meeting.

(5) For the purposes of this section—

(a) a person is able to exercise the right to speak at a meeting when that person is in a position to communicate to all those attending the meeting, during the meeting, any information or opinions which that person has on the business of the meeting; and

(b) a person is able to exercise the right to vote at a meeting when—

(i) that person is able to vote, during the meeting, on resolutions put to the vote at the meeting, and

(ii) that person's vote can be taken into account in determining whether or not such resolutions are passed at the same time as the votes of all the other persons attending the meeting.

(6) The convener of a meeting which is to be conducted and held in the manner referred to in subsection (3) shall make whatever arrangements the convener considers appropriate to—

(a) enable those attending the meeting to exercise their rights to speak or vote, and

(b) ensure the identification of those attending the meeting and the security of any electronic means used to enable attendance.

(7) Where in the reasonable opinion of the convener—

(a) a meeting will be attended by persons who will not be present together at the same place, and

(b) it is unnecessary or inexpedient to specify a place for the meeting,

any requirement under this Act or the rules to specify a place for the meeting may be satisfied by specifying the arrangements the convener proposes to enable persons to exercise their rights to speak or vote.

(8) In making the arrangements referred to in subsection (6) and in forming the opinion referred to in subsection (7)(b), the convener must have regard to the legitimate interests of the [F542 members] and others attending the meeting in the efficient despatch of the business of the meeting.

(9) If—

(a) the notice of a meeting does not specify a place for the meeting,

(b) the convener is requested in accordance with the rules to specify a place for the meeting, and

(c) that request is [F543 made] by members representing not less than ten percent of the total voting rights of all the members having at the date of the request a right to vote at the meeting,

it shall be the duty of the convener to specify a place for the meeting.

(10) In this section, “the office-holder”, in relation to a company, means—

[F544 (za) the monitor in relation to a moratorium under Part A1,]

(a) its liquidator, provisional liquidator, administrator, [F545 receiver (appointed under section 51)] or administrative receiver, or

(b) where a voluntary arrangement in relation to the company is proposed or has taken effect under Part 1, the nominee or the supervisor of the voluntary arrangement.

Textual Amendments

F540 Words in s. 246A(1) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 54(2); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F541 S. 246A(2) repealed (S.) (1.10.2017 for specified purposes) by The Public Services Reform (Corporate Insolvency and Bankruptcy) (Scotland) Order 2017 (S.S.I. 2017/209), arts. 1(3), 5(a)

F542 Word in s. 246A(8) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 54(3); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F543 Word in s. 246A(9)(c) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 54(4); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

F544 S. 246A(10)(za) inserted (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 3 para. 17 (with ss. 2(2), 5(2))

F545 Words in s. 246A(10)(a) inserted (S.) (1.10.2017 for specified purposes) by The Public Services Reform (Corporate Insolvency and Bankruptcy) (Scotland) Order 2017 (S.S.I. 2017/209), arts. 1(3), 5(b)

Modifications etc. (not altering text)

C866 S. 246A applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C867 S. 246A applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

C868 Ss. 246A-246C applied (with modifications) (E.W.) (15.3.2024) by The Water Industry (Special Administration) Regulations 2024 (S.I. 2024/205), regs. 2(2), 5(1) (with reg. 64)

E+W+S

[F546 Giving of notices etc by office-holders] E+W+S

Textual Amendments

F546 S. 246B cross-heading substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), ss. 124(2), 164(1); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(c); S.I. 2019/816, reg. 4(b)

246B Use of websites E+W+S

(1) Subject to subsection (2), where any provision of this Act or the rules requires the office-holder to give, deliver, furnish or send a notice or other document or information to any person, that requirement is satisfied by making the notice, document or information available on a website—

(a) in accordance with the rules, and

(b) in such circumstances as may be prescribed.

F547 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) In this section, “the office-holder” means—

[F548 (za) the monitor in relation to a moratorium under Part A1,]

(a) the liquidator, provisional liquidator, administrator, [F549 receiver (appointed under section 51),] or administrative receiver of a company, or

(b) where a voluntary arrangement in relation to a company is proposed or has taken effect under Part 1, the nominee or the supervisor of the voluntary arrangement.]

Textual Amendments

F547 S. 246B(2) repealed (S.) (1.4.2016 for specified purposes, 6.4.2019 in so far as not already in force) by The Public Services Reform (Insolvency) (Scotland) Order 2016 (S.S.I. 2016/141), arts. 1(3)(4), 12(a) (with arts. 14, 15) (see S.I. 2019/816, reg. 4(a))

F548 S. 246B(3)(za) inserted (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 3 para. 18 (with ss. 2(2), 5(2))

F549 Words in s. 246B(3)(a) inserted (S.) (1.4.2016 for specified purposes, 6.4.2019 in so far as not already in force) by The Public Services Reform (Insolvency) (Scotland) Order 2016 (S.S.I. 2016/141), arts. 1(3)(4), 12(b) (with arts. 14, 15) (see S.I. 2019/816, reg. 4(a))

Modifications etc. (not altering text)

C868 Ss. 246A-246C applied (with modifications) (E.W.) (15.3.2024) by The Water Industry (Special Administration) Regulations 2024 (S.I. 2024/205), regs. 2(2), 5(1) (with reg. 64)

C869 S. 246B applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C870 S. 246B applied (with modifications) (31.1.2019) by Technical and Further Education Act 2017 (c. 19), s. 47(2), Sch. 4; S.I. 2018/1161, reg. 3(d)

C871 S. 246B applied (with modifications) (31.1.2019) by Technical and Further Education Act 2017 (c. 19), s. 47(2), Sch. 3; S.I. 2018/1161, reg. 3(c)

C872 S. 246B applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)

[F550 246C Creditors' ability to opt out of receiving certain notices E+W+S

(1) Any provision of the rules which requires an office-holder of a company to give a notice to creditors of the company does not apply, in circumstances prescribed by the rules, in relation to opted-out creditors.

(2) Subsection (1)—

(a) does not apply in relation to a notice of a distribution or proposed distribution to creditors;

(b) is subject to any order of the court requiring a notice to be given to all creditors (or all creditors of a particular category).

(3) Except as provided by the rules, a creditor may participate and vote in a qualifying decision procedure or a deemed consent procedure even though, by virtue of being an opted-out creditor, the creditor does not receive notice of it.

(4) In this section—

• “give” includes deliver, furnish or send;

• “notice” includes any document or information in any other form;

• “office-holder”, in relation to a company, means—

  (a)

  a liquidator, provisional liquidator, administrator or administrative receiver of the company,

  (b)

  a receiver appointed under section 51 in relation to any property of the company, or

  (c)

  the supervisor of a voluntary arrangement which has taken effect under Part 1 in relation to the company.]

Textual Amendments

F550 S. 246C inserted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), ss. 124(3), 164(1); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(c); S.I. 2019/816, reg. 4(b)

Modifications etc. (not altering text)

C868 Ss. 246A-246C applied (with modifications) (E.W.) (15.3.2024) by The Water Industry (Special Administration) Regulations 2024 (S.I. 2024/205), regs. 2(2), 5(1) (with reg. 64)

C873 S. 246C applied (with modifications) (31.1.2019) by Technical and Further Education Act 2017 (c. 19), s. 47(2), Sch. 3; S.I. 2018/1161, reg. 3(c)

C874 S. 246C applied (with modifications) (31.1.2019) by Technical and Further Education Act 2017 (c. 19), s. 47(2), Sch. 4; S.I. 2018/1161, reg. 3(d)

Part VII E+W+S Interpretation for First Group of Parts

Modifications etc. (not altering text)

C875 Pts. 1–7 (ss. 1–251) applied (with modifications) by S.I. 1989/1276, arts. 2, 3

Pt. 7 (ss. 247-251) 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 (as amended (13.3.2018) by S.I. 2018/208, regs. 1(3), 3)

Pt. 7 (ss. 247-251) applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 8(4)(5)(c)(8)(9)

Pt. 7 (ss. 247-251) applied (with modifications) (1.12.1997) by 1986 c. 53, Sch. 15A, para. 1 (as inserted by 1997 c. 32, s. 39(2), Sch. 6; S.I. 1997/2668, art. 2, Sch. Pt. I(i); and as amended (13.3.2018) by S.I. 2018/208, regs. 1(3), 2(3))

Pt. 7 (ss. 247-251) power to apply or incorporate conferred (6.4.2001) by 2000 c. 12, s. 14; S.I. 2000/3316, art. 2

C876 Pt. 7 (ss. 247–251) extended with modifications by Building Societies Act 1986 (c. 53, SIF 16), ss. 54(3)(a)(5)(a), 90, 126(3), Sch. 15 (as amended (13.3.2018) by S.I. 2018/208, regs. 1(3), 2(3))

C877 Pt. 7 (ss. 247–251) modified by Company Directors Disqualification Act 1986 (c. 46, SIF 27), ss. 21(2), 25

Pt. 7 (ss. 247-251) modified (1.2.1993) by Friendly Societies Act 1992 (c. 40), s. 23, Sch. 10 Pt. I para. 1(a) (with ss. 7(5), 93(4)); S.I. 1993/16, art. 2, Sch. 3

C878 Pt. 7 (except s. 250) applied (1.12.1994) by S.I. 1994/2421, arts. 4(3)(b), 6(2)(3)(c)

Pt. 7 (ss. 247-249, 251) applied (1.12.1994) by S.I. 1994/2421, art. 6(3)(c)

Pt. 7 (ss. 247-251) applied (1.12.1994) by S.I. 1994/2421, arts. 8, 10(2)(3)(c), Sch. 4 Pt. II

C879 First 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. (as amended (1.4.2013) by S.I. 2013/472, art. 1(1), Sch. 2 para. 117; and (13.3.2018) by S.I. 2018/208, regs. 1(3), 11

C880 Pt. 7 applied (with modifications) in part (E.W.) (2.1.2013) by The Charitable Incorporated Organisations (Insolvency and Dissolution) Regulations 2012 (S.I. 2012/3013), reg. 1, Sch. para. 1(2)(a)(3)-(7) (as amended (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 3 para. 49(3) (with ss. 2(2), 5(2)); (7.7.2020) by The Charitable Incorporated Organisations (Insolvency and Dissolution) (Amendment) Regulations 2020 (S.I. 2020/710), regs. 1, 4 (with reg. 6) (which affecting legislation is revoked and this amendment reversed (13.8.2020) by The Charitable Incorporated Organisations (Insolvency and Dissolution) (Amendment) (No. 2) Regulations 2020 (S.I. 2020/856), regs. 1(2), 2); and (13.8.2020 immediately after the coming into force of S.I. 2020/856, reg. 2) by The Charitable Incorporated Organisations (Insolvency and Dissolution) (Amendment) (No. 2) Regulations 2020 (S.I. 2020/856), regs. 1(3), 5 (with reg. 7))

C881 Pt. 7 applied (with modifications) (6.4.2014) by The Industrial and Provident Societies and Credit Unions (Arrangements, Reconstructions and Administration) Order 2014 (S.I. 2014/229), arts. 1, 4(b), Sch. 3 (as amended (13.3.2018) by S.I. 2018/208, regs. 1(3), 15(4)(a); and (18.7.2020) by S.I. 2020/744, arts. 1, 8)

C882 Pt. 7 applied (with modifications) (E.W.S.) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), reg. 2, Sch. 1 para. 3 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4)

247 “Insolvency” and “go into liquidation”. E+W+S

(1) In this Group of Parts, except in so far as the context otherwise requires, “insolvency”, in relation to a company, includes [F551 the coming into force of a moratorium for the company under Part A1,] the approval of a voluntary arrangement under Part I, [F552 or the appointment of an administrator or administrative receiver].

(2) For the purposes of any provision in this Group of Parts, a company goes into liquidation if it passes a resolution for voluntary winding up or an order for its winding up is made by the court at a time when it has not already gone into liquidation by passing such a resolution.

[F553 (3) The reference to a resolution for voluntary winding up in subsection (2) includes a reference to a resolution which is deemed to occur by virtue of—

(a) paragraph 83(6)(b) of Schedule B1, F554 ...

F554 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

F551 Words in s. 247(1) inserted (26.6.2020) by Corporate Insolvency and Governance Act 2020 (c. 12), s. 49(1), Sch. 3 para. 19 (with ss. 2(2), 5(2))

F552 Words in s. 247(1) substituted (15.9.2003) by 2002 c. 40, ss. 248(3), 279, Sch. 17 para. 33(2) (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))

F553 S. 247(3) substituted (15.9.2003) by 2002 c. 40, ss. 248(3), 279, Sch. 17 para. 33(3) (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))

F554 S. 247(3)(b) and word omitted (31.12.2020) by virtue of The Insolvency (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/146), reg. 1(3), Sch. para. 29 (with regs. 4, 5); 2020 c. 1, Sch. 5 para. 1(1)

Modifications etc. (not altering text)

C883 S. 247 applied by Company Directors Disqualification Act 1986 (c. 46, SIF 27), ss. 22(3), 25

C884 S. 247 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C885 S. 247 applied (with modifications) (31.1.2019) by Technical and Further Education Act 2017 (c. 19), s. 47(2), Sch. 3; S.I. 2018/1161, reg. 3(c)

C886 S. 247 applied (with modifications) (31.1.2019) by Technical and Further Education Act 2017 (c. 19), s. 47(2), Sch. 4; S.I. 2018/1161, reg. 3(d)

248 “Secured creditor”, etc. E+W+S

In this Group of Parts, except in so far as the context otherwiserequires—

(a) “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” is to be read accordingly; and

(b) “security” means—

(i) in relation to England and Wales, any mortgage, charge, lien or other security, and

(ii) in relation to Scotland, any security (whether heritable or moveable), any floating charge and any right of lien or preference and any right of retention (other than a right of compensation or set off).

Modifications etc. (not altering text)

C887 S. 248 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C888 S. 248(b) applied (with modifications) (31.1.2019) by Technical and Further Education Act 2017 (c. 19), s. 47(2), Sch. 4; S.I. 2018/1161, reg. 3(d)

C889 S. 248(b) applied (with modifications) (31.1.2019) by Technical and Further Education Act 2017 (c. 19), s. 47(2), Sch. 3; S.I. 2018/1161, reg. 3(c)

[F555 248A “Opted-out creditor” E+W+S

(1) For the purposes of this Group of Parts “opted-out creditor”, in relation to an office-holder of a company, means a person who—

(a) is a creditor of the company, and

(b) in accordance with the rules has elected (or is deemed to have elected) to be (and not to cease to be) an opted-out creditor in relation to the office-holder.

(2) In this section, “office-holder”, in relation to a company, means—

(a) a liquidator, provisional liquidator, administrator or administrative receiver of the company,

(b) a receiver appointed under section 51 in relation to any property of the company, or

(c) the supervisor of a voluntary arrangement which has taken effect under Part 1 in relation to the company.]

Textual Amendments

F555 S. 248A inserted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), ss. 124(4), 164(1); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(c); S.I. 2019/816, reg. 4(b)

249 “Connected” with a company. E+W+S

For the purposes of any provision in this Group of Parts, a person is connected with a company if—

(a) he is a director or shadow director of the company or an associate of such a director or shadow director, or

(b) he is an associate of the company,

and “associate” has the meaning given by section 435 in Part XVIII of this Act.

Modifications etc. (not altering text)

C890 S. 249 applied by Social Security Pensions Act 1975 (c. 60, SIF 113:1), s. 57C(4) (as inserted by Social Security Act 1990 (c. 27, SIF 113:1), s. 14, Sch. 4 Pt. I para. 1)

S. 249 applied by Social Security Pensions Act 1975 (c. 60, SIF 113:1), s. 57A(4) (as inserted by Social Security Act 1990 (c. 27, SIF 113:1), s. 14, Sch. 4 Pt. I para. 3)

S. 249 applied (7.2.1994) by 1993 c. 48, ss. 112(4), 119(4) (with s. 6(8)); S.I. 1994/86, art. 2

S. 249 applied (6.4.1997) by 1995 c. 26, s. 123(1) (with s. 121(5)); S.I. 1997/664, art. 2(3), Sch. Pt. II (with transitional adaptations, modifications and savings in arts. 3-14)

S. 249 applied (with modifications) (6.4.1997) by S.I. 1996/3127, reg. 3(1)

S. 249 applied (1.10.2000) by S.I. 2000/1403, art. 1(5)

S. 249 applied (6.4.2005) by Pensions Act 2004 (c. 35), ss. 38(10), 51(3)(a), 53(6)(a), 322(1) (with s. 313); S.I. 2005/275, art. 2(7), Sch. Pt. 7 (subject to art. 2(12))

C891 S. 249: power to apply (with modifications) conferred (6.4.2005) Pensions Act 2004 (c. 35), ss. 57, 322(1) (with s. 313); S.I. 2005/275, art. 2(7), Sch. Pt. 7 (subject to art. 2(12))

C892 S. 249 modified (30.12.2005) by The Occupational Pension Schemes (Investment) Regulations 2005 (S.I. 2005/3378), reg. 10(1)

C893 S. 249 modified (22.2.2008) by The Northern Rock plc Transfer Order 2008 (S.I. 2008/432), art. 17(1), Sch. para. 3(b)

C894 S. 249 modified (29.9.2008 at 8.00 a.m.) by The Bradford & Bingley plc Transfer of Securities and Property etc. Order 2008 (S.I. 2008/2546), art. 13, Sch. 1 para. 3(b)

C895 S. 249 modified (7.10.2008 at 9.30 a.m.) ) by The Heritable Bank plc Transfer of Certain Rights and Liabilities Order 2008 (S.I. 2008/2644), art. 26, Sch. 2 para. 3(b)

C896 S. 249 modified (30.3.2009 at. 8:00 a.m.) by The Amendments to Law (Resolution of Dunfermline Building Society) Order 2009 (S.I. 2009/814), art. 7, Sch. para. 3(b)

C897 S. 249 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C898 S. 249 excluded (1.3.2016) by The NRAM plc (formerly Northern Rock plc) Consequential and Supplementary Provisions Order 2016 (S.I. 2016/114), arts. 1(1), 7(1)(3), Sch. para. 2(b)

C899 S. 249 applied (with modifications) (31.1.2019) by Technical and Further Education Act 2017 (c. 19), s. 47(2), Sch. 4; S.I. 2018/1161, reg. 3(d)

C900 S. 249 applied (with modifications) (31.1.2019) by Technical and Further Education Act 2017 (c. 19), s. 47(2), Sch. 3; S.I. 2018/1161, reg. 3(c)

C901 S. 249 applied (31.5.2021 for specified purposes) by 2004 c. 35, s. 69A(14)(a) (as inserted by Pension Schemes Act 2021 (c. 1), ss. 109(2), 131(1); S.I. 2021/620, reg. 2(1)(b))

250 “Member” of a company. E+W+S

For the purposes of any provision in this Group of Parts, a person who is not a member of a company but to whom shares in the company have been transferred, or transmitted by operation of law, is to be regarded as a member of the company, and references to a member or members are to be read accordingly.

Modifications etc. (not altering text)

C902 S. 250 excluded (E.W.) (31.1.2019) by The Further Education Bodies (Insolvency) Regulations 2019 (S.I. 2019/138), regs. 1(1), 22 (with regs. 1(2), 3(a)(ii))

251 Expressions used generally. E+W+S

In this Group of Parts, except in so far as the context otherwise requires—

• “administative receiver” means—

  (a)

  an administrative receiver as defined by section 29(2) in Chapter I of Part III, or

  (b)

  a receiver appointed under section 51 in Chapter II of that Part in a case where the whole (or substantially the whole) of the company’s property is attached by the floating charge;

• [F556 “agent” does not include a person's counsel acting as such;]

• [F557 “books and papers” and “books or papers” includes accounts, deeds, writing and documents;]

• “business day” means any day other than a Saturday, a Sunday, Christmas Day, Good Friday or a day which is a bank holiday in any part of Great Britain;

• “chattel leasing agreement” means an agreement for the bailment or, in Scotland, the hiring of goods which is capable of subsisting for more than 3 months;

• “contributory” has the meaning given by section 79;

• [F558 “the court”, in relation to a company, means a court having jurisdiction to wind up the company;]

• [F559 “deemed consent procedure” means the deemed consent procedure provided for by section 246ZF;]

• “director” includes any person occupying the position of director, by whatever name called;

• [F560 “document” includes summons, notice, order and other legal process, and registers;]

• F561 ...

• “floating charge” means a charge which, as created, was a floating charge an includes a floating charge within section 462 of the Companies Act (Scottish floating charges);

• [F562 “the Gazette” means—

  (a)

  as respects companies registered in England and Wales, the London Gazette;

  (b)

  as respects companies registered in Scotland, the Edinburgh Gazette;]

• F563 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• F561 ...

• [F564 “officer”, in relation to a body corporate, includes a director, manager or secretary;]

• “the official rate”, in relation to interest, means the rate payable under section 189(4);

• “prescribed” means prescribed by the rules;

• [F565 “qualifying decision procedure” has the meaning given by section 246ZE(11);]

• “receiver”, in the expression “receiver or manager”, does not include a receiver appointed under section 51 in Chapter II of Part III;

• “retention of title agreement” means an agreement for the sale of goods to a company, being an agreement—

  (a)

  which does not constitute a charge on the goods, but

  (b)

  under which, if the seller is not paid and the company is wound up, the seller will have priority over all other creditors of the company as respects the goods or any property representing the goods;

• “the rules” means rules under section 411 in Part XV; and

• “shadow director”, in relation to a company, means a person in accordance with whose directions or instructions the directors of the company are accustomed to act [F566 , but so that a person is not deemed a shadow director by reason only that the directors act—

  (a)

  on advice given by that person in a professional capacity;

  (b)

  in accordance with instructions, a direction, guidance or advice given by that person in the exercise of a function conferred by or under an enactment (within the meaning given by section 1293 of the Companies Act 2006);

  (c)

  in accordance with guidance or advice given by that person in that person's capacity as a Minister of the Crown (within the meaning of the Ministers of the Crown Act 1975)]

F567 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F556 S. 251: definition inserted (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. 77(2)} (with art. 10, Sch. 1 para. 84)

F557 S. 251: definition inserted (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. 77(2)} (with art. 10, Sch. 1 para. 84)

F558 S. 251: definition inserted (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. 77(2)} (with art. 10, Sch. 1 para. 84)

F559 Words in s. 251 inserted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), ss. 122(4)(a), 164(1); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(a) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(a) (with reg. 5)

F560 S. 251: definition inserted (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. 77(2)} (with art. 10, Sch. 1 para. 84)

F561 Words in s. 251 omitted (31.12.2020) by virtue of The Insolvency (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/146), reg. 1(3), Sch. para. 30 (with regs. 4, 5); 2020 c. 1, Sch. 5 para. 1(1)

F562 S. 251: definition inserted (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. 77(2)} (with art. 10, Sch. 1 para. 84)

F563 S. 251: definition 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. 77(3)} (with art. 10, Sch. 1 para. 84)

F564 S. 251: definition inserted (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. 77(2)} (with art. 10, Sch. 1 para. 84)

F565 Words in s. 251 inserted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), ss. 122(4)(b), 164(1); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(a) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(a) (with reg. 5)

F566 Words in s. 251 substituted (26.5.2015) by Small Business, Enterprise and Employment Act 2015 (c. 26), ss. 90(1), 164(3)(g)(iii)

F567 Words in s. 251 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. 77(4)} (with art. 10, Sch. 1 para. 84)

Modifications etc. (not altering text)

C903 S. 251 applied (with modifications) (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4, Sch. 2, Sch. 3

C904 S. 251 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)

C905 S. 251 applied (with modifications) (31.1.2019) by Technical and Further Education Act 2017 (c. 19), s. 47(2), Sch. 3; S.I. 2018/1161, reg. 3(c)

C906 S. 251 modified (E.W.) (31.1.2019) by The Further Education Bodies (Insolvency) Regulations 2019 (S.I. 2019/138), regs. 1(1), 23 (with regs. 1(2), 3(a)(ii))

C907 S. 251 applied (with modifications) (31.1.2019) by Technical and Further Education Act 2017 (c. 19), s. 47(2), Sch. 4; S.I. 2018/1161, reg. 3(d)

C908 S. 251 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)

The Second Group of Parts E+W Insolvency of Individuals; Bankruptcy

[F568 Part 7A E+W Debt relief orders

Textual Amendments

F568 Pt. 7A inserted (24.2.2009 for certain purposes otherwise 6.4.2009) by Tribunals, Courts and Enforcement Act 2007 (c. 15), ss. 108(1), 148(5), Sch. 17; S.I. 2009/382, art. 2

Preliminary E+W

251A Debt relief orders E+W

(1) An individual who is unable to pay his debts may apply for an order under this Part (“a debt relief order”) to be made in respect of his qualifying debts.

(2) In this Part “qualifying debt” means (subject to subsection (3)) a debt which—

(a) is for a liquidated sum payable either immediately or at some certain future time; and

(b) is not an excluded debt.

(3) A debt is not a qualifying debt to the extent that it is secured.

(4) In this Part “excluded debt” means a debt of any description prescribed for the purposes of this subsection.

Applications for a debt relief order E+W

251B Making of application E+W

(1) An application for a debt relief order must be made to the official receiver through an approved intermediary.

(2) The application must include—

(a) a list of the debts to which the debtor is subject at the date of the application, specifying the amount of each debt (including any interest, penalty or other sum that has become payable in relation to that debt on or before that date) and the creditor to whom it is owed;

(b) details of any security held in respect of any of those debts; and

(c) such other information about the debtor's affairs (including his creditors, debts and liabilities and his income and assets) as may be prescribed.

(3) The rules may make further provision as to—

(a) the form of an application for a debt relief order;

(b) the manner in which an application is to be made; and

(c) information and documents to be supplied in support of an application.

(4) For the purposes of this Part an application is not to be regarded as having been made until—

(a) the application has been submitted to the official receiver; and

(b) any fee required in connection with the application by an order under section 415 has been paid to such person as the order may specify.

251C Duty of official receiver to consider and determine application E+W

(1) This section applies where an application for a debt relief order is made.

(2) The official receiver may stay consideration of the application until he has received answers to any queries raised with the debtor in relation to anything connected with the application.

(3) The official receiver must determine the application by—

(a) deciding whether to refuse the application;

(b) if he does not refuse it, by making a debt relief order in relation to the specified debts he is satisfied were qualifying debts of the debtor at the application date;

but he may only refuse the application if he is authorised or required to do so by any of the following provisions of this section.

(4) The official receiver may refuse the application if he considers that—

(a) the application does not meet all the requirements imposed by or under section 251B;

(b) any queries raised with the debtor have not been answered to the satisfaction of the official receiver within such time as he may specify when they are raised;

(c) the debtor has made any false representation or omission in making the application or on supplying any information or documents in support of it.

(5) The official receiver must refuse the application if he is not satisfied that—

(a) the debtor is an individual who is unable to pay his debts;

(b) at least one of the specified debts was a qualifying debt of the debtor at the application date;

(c) each of the conditions set out in Part 1 of Schedule 4ZA is met.

(6) The official receiver may refuse the application if he is not satisfied that each condition specified in Part 2 of Schedule 4ZA is met.

(7) If the official receiver refuses an application he must give reasons for his refusal to the debtor in the prescribed manner.

(8) In this section “specified debt” means a debt specified in the application.

251D Presumptions applicable to the determination of an application E+W

(1) The following presumptions are to apply to the determination of an application for a debt relief order.

(2) The official receiver must presume that the debtor is an individual who is unable to pay his debts at the determination date if—

(a) that appears to the official receiver to be the case at the application date from the information supplied in the application and he has no reason to believe that the information supplied is incomplete or inaccurate; and

(b) he has no reason to believe that, by virtue of a change in the debtor's financial circumstances since the application date, the debtor may be able to pay his debts.

(3) The official receiver must presume that a specified debt (of the amount specified in the application and owed to the creditor so specified) is a qualifying debt at the application date if—

(a) that appears to him to be the case from the information supplied in the application; and

(b) he has no reason to believe that the information supplied is incomplete or inaccurate.

(4) The official receiver must presume that the condition specified in paragraph 1 of Schedule 4ZA is met if—

(a) that appears to him to be the case from the information supplied in the application;

(b) any prescribed verification checks relating to the condition have been made; and

(c) he has no reason to believe that the information supplied is incomplete or inaccurate.

(5) The official receiver must presume that any other condition specified in Part 1 or 2 of Schedule 4ZA is met if—

(a) that appears to him to have been the case as at the application date from the information supplied in the application and he has no reason to believe that the information supplied is incomplete or inaccurate;

(b) any prescribed verification checks relating to the condition have been made; and

(c) he has no reason to believe that, by virtue of a change in circumstances since the application date, the condition may no longer be met.

(6) References in this section to information supplied in the application include information supplied to the official receiver in support of the application.

(7) In this section “specified debt” means a debt specified in the application.

Making and effect of debt relief order E+W

251E Making of debt relief orders E+W

(1) This section applies where the official receiver makes a debt relief order on determining an application under section 251C.

(2) The order must be made in the prescribed form.

(3) The order must include a list of the debts which the official receiver is satisfied were qualifying debts of the debtor at the application date, specifying the amount of the debt at that time and the creditor to whom it was then owed.

(4) The official receiver must—

(a) give a copy of the order to the debtor; and

(b) make an entry for the order in the register containing the prescribed information about the order or the debtor.

(5) The rules may make provision as to other steps to be taken by the official receiver or the debtor on the making of the order.

(6) Those steps may include in particular notifying each creditor to whom a qualifying debt specified in the order is owed of—

(a) the making of the order and its effect,

(b) the grounds on which a creditor may object under section 251K, and

(c) any other prescribed information.

(7) In this Part the date on which an entry relating to the making of a debt relief order is first made in the register is referred to as “the effective date”.

251F Effect of debt relief order on other debt management arrangements E+W

(1) This section applies if—

(a) a debt relief order is made, and

(b) immediately before the order is made, other debt management arrangements are in force in respect of the debtor.

(2) The other debt management arrangements cease to be in force when the debt relief order is made.

(3) In this section “other debt management arrangements” means—

(a) an administration order under Part 6 of the County Courts Act 1984;

(b) an enforcement restriction order under Part 6A of that Act;

(c) a debt repayment plan arranged in accordance with a debt management scheme that is approved under Chapter 4 of Part 5 of the Tribunals, Courts and Enforcement Act 2007.

251G Moratorium from qualifying debts E+W

(1) A moratorium commences on the effective date for a debt relief order in relation to each qualifying debt specified in the order (“a specified qualifying debt”).

(2) During the moratorium, the creditor to whom a specified qualifying debt is owed—

(a) has no remedy in respect of the debt, and

(b) may not—

(i) commence a creditor's petition in respect of the debt, or

(ii) otherwise commence any action or other legal proceedings against the debtor for the debt,

except with the permission of the court and on such terms as the court may impose.

(3) If on the effective date a creditor to whom a specified qualifying debt is owed has any such petition, action or other proceeding as mentioned in subsection (2)(b) pending in any court, the court may—

(a) stay the proceedings on the petition, action or other proceedings (as the case may be), or

(b) allow them to continue on such terms as the court thinks fit.

(4) In subsection (2)(a) and (b) references to the debt include a reference to any interest, penalty or other sum that becomes payable in relation to that debt after the application date.

(5) Nothing in this section affects the right of a secured creditor of the debtor to enforce his security.

251H The moratorium period E+W

(1) The moratorium relating to the qualifying debts specified in a debt relief order continues for the period of one year beginning with the effective date for the order, unless—

(a) the moratorium terminates early; or

(b) the moratorium period is extended by the official receiver under this section or by the court under section 251M.

(2) The official receiver may only extend the moratorium period for the purpose of—

(a) carrying out or completing an investigation under section 251K;

(b) taking any action he considers necessary (whether as a result of an investigation or otherwise) in relation to the order; or

(c) in a case where he has decided to revoke the order, providing the debtor with the opportunity to make arrangements for making payments towards his debts.

(3) The official receiver may not extend the moratorium period for the purpose mentioned in subsection (2)(a) without the permission of the court.

(4) The official receiver may not extend the moratorium period beyond the end of the period of three months beginning after the end of the initial period of one year mentioned in subsection (1).

(5) The moratorium period may be extended more than once, but any extension (whether by the official receiver or by the court) must be made before the moratorium would otherwise end.

(6) References in this Part to a moratorium terminating early are to its terminating before the end of what would otherwise be the moratorium period, whether on the revocation of the order or by virtue of any other enactment.

251I Discharge from qualifying debts E+W

(1) Subject as follows, at the end of the moratorium applicable to a debt relief order the debtor is discharged from all the qualifying debts specified in the order (including all interest, penalties and other sums which may have become payable in relation to those debts since the application date).

(2) Subsection (1) does not apply if the moratorium terminates early.

(3) Subsection (1) does not apply in relation to any qualifying debt which the debtor incurred in respect of any fraud or fraudulent breach of trust to which the debtor was a party.

(4) The discharge of the debtor under subsection (1) does not release any other person from—

(a) any liability (whether as partner or co-trustee of the debtor or otherwise) from which the debtor is released by the discharge; or

(b) any liability as surety for the debtor or as a person in the nature of such a surety.

(5) If the order is revoked by the court under section 251M after the end of the moratorium period, the qualifying debts specified in the order shall (so far as practicable) be treated as though subsection (1) had never applied to them.

Duties of debtor E+W

251J Providing assistance to official receiver etc E+W

(1) The duties in this section apply to a debtor at any time after the making of an application by him for a debt relief order.

(2) The debtor must—

(a) give to the official receiver such information as to his affairs,

(b) attend on the official receiver at such times, and

(c) do all such other things,

as the official receiver may reasonably require for the purpose of carrying out his functions in relation to the application or, as the case may be, the debt relief order made as a result of the application.

(3) The debtor must notify the official receiver as soon as reasonably practicable if he becomes aware of—

(a) any error in, or omission from, the information supplied to the official receiver in, or in support of, the application;

(b) any change in his circumstances between the application date and the determination date that would affect (or would have affected) the determination of the application.

(4) The duties under subsections (2) and (3) apply after (as well as before) the determination of the application, for as long as the official receiver is able to exercise functions of the kind mentioned in subsection (2).

(5) If a debt relief order is made as a result of the application, the debtor must notify the official receiver as soon as reasonably practicable if—

(a) there is an increase in his income during the moratorium period applicable to the order;

(b) he acquires any property or any property is devolved upon him during that period;

(c) he becomes aware of any error in or omission from any information supplied by him to the official receiver after the determination date.

(6) A notification under subsection (3) or (5) must give the prescribed particulars (if any) of the matter being notified.

Objections, investigations and revocation E+W

251K Objections and investigations E+W

(1) Any person specified in a debt relief order as a creditor to whom a specified qualifying debt is owed may object to—

(a) the making of the order;

(b) the inclusion of the debt in the list of the debtor's qualifying debts; or

(c) the details of the debt specified in the order.

(2) An objection under subsection (1) must be—

(a) made during the moratorium period relating to the order and within the prescribed period for objections;

(b) made to the official receiver in the prescribed manner;

(c) based on a prescribed ground;

(d) supported by any information and documents as may be prescribed;

and the prescribed period mentioned in paragraph (a) must not be less than 28 days after the creditor in question has been notified of the making of the order.

(3) The official receiver must consider every objection made to him under this section.

(4) The official receiver may—

(a) as part of his consideration of an objection, or

(b) on his own initiative,

carry out an investigation of any matter that appears to the official receiver to be relevant to the making of any decision mentioned in subsection (5) in relation to a debt relief order or the debtor.

(5) The decisions to which an investigation may be directed are—

(a) whether the order should be revoked or amended under section 251L;

(b) whether an application should be made to the court under section 251M; or

(c) whether any other steps should be taken in relation to the debtor.

(6) The power to carry out an investigation under this section is exercisable after (as well as during) the moratorium relating to the order.

(7) The official receiver may require any person to give him such information and assistance as he may reasonably require in connection with an investigation under this section.

(8) Subject to anything prescribed in the rules as to the procedure to be followed in carrying out an investigation under this section, an investigation may be carried out by the official receiver in such manner as he thinks fit.

251L Power of official receiver to revoke or amend a debt relief order E+W

(1) The official receiver may revoke or amend a debt relief order during the applicable moratorium period in the circumstances provided for by this section.

(2) The official receiver may revoke the order on the ground that—

(a) any information supplied to him by the debtor—

(i) in, or in support of, the application, or

(ii) after the determination date,

was incomplete, incorrect or otherwise misleading;

(b) the debtor has failed to comply with a duty under section 251J;

(c) a bankruptcy order has been made in relation to the debtor; or

(d) the debtor has made a proposal under Part 8 (or has notified the official receiver of his intention to do so).

(3) The official receiver may revoke the order on the ground that he should not have been satisfied—

(a) that the debts specified in the order were qualifying debts of the debtor as at the application date;

(b) that the conditions specified in Part 1 of Schedule 4ZA were met;

(c) that the conditions specified in Part 2 of that Schedule were met or that any failure to meet such a condition did not prevent his making the order.

(4) The official receiver may revoke the order on the ground that either or both of the conditions in paragraphs 7 and 8 of Schedule 4ZA (monthly surplus income and property) are not met at any time after the order was made.

For this purpose those paragraphs are to be read as if references to the determination date were references to the time in question.

(5) Where the official receiver decides to revoke the order, he may revoke it either—

(a) with immediate effect, or

(b) with effect from such date (not more than three months after the date of the decision) as he may specify.

(6) In considering when the revocation should take effect the official receiver must consider (in the light of the grounds on which the decision to revoke was made and all the other circumstances of the case) whether the debtor ought to be given the opportunity to make arrangements for making payments towards his debts.

(7) If the order has been revoked with effect from a specified date the official receiver may, if he thinks it appropriate to do so at any time before that date, revoke the order with immediate effect.

(8) The official receiver may amend a debt relief order for the purpose of correcting an error in or omission from anything specified in the order.

(9) But subsection (8) does not permit the official receiver to add any debts that were not specified in the application for the debt relief order to the list of qualifying debts.

(10) The rules may make further provision as to the procedure to be followed by the official receiver in the exercise of his powers under this section.

Role of the court E+W

251M Powers of court in relation to debt relief orders E+W

(1) Any person may make an application to the court if he is dissatisfied by any act, omission or decision of the official receiver in connection with a debt relief order or an application for such an order.

(2) The official receiver may make an application to the court for directions or an order in relation to any matter arising in connection with a debt relief order or an application for such an order.

(3) The matters referred to in subsection (2) include, among other things, matters relating to the debtor's compliance with any duty arising under section 251J.

(4) An application under this section may, subject to anything in the rules, be made at any time.

(5) The court may extend the moratorium period applicable to a debt relief order for the purposes of determining an application under this section.

(6) On an application under this section the court may dismiss the application or do one or more of the following—

(a) quash the whole or part of any act or decision of the official receiver;

(b) give the official receiver directions (including a direction that he reconsider any matter in relation to which his act or decision has been quashed under paragraph (a));

(c) make an order for the enforcement of any obligation on the debtor arising by virtue of a duty under section 251J;

(d) extend the moratorium period applicable to the debt relief order;

(e) make an order revoking or amending the debt relief order;

(f) make an order under section 251N; or

(g) make such other order as the court thinks fit.

(7) An order under subsection (6)(e) for the revocation of a debt relief order—

(a) may be made during the moratorium period applicable to the debt relief order or at any time after that period has ended;

(b) may be made on the court's own motion if the court has made a bankruptcy order in relation to the debtor during that period;

(c) may provide for the revocation of the order to take effect on such terms and at such a time as the court may specify.

(8) An order under subsection (6)(e) for the amendment of a debt relief order may not add any debts that were not specified in the application for the debt relief order to the list of qualifying debts.

251N Inquiry into debtor's dealings and property E+W

(1) An order under this section may be made by the court on the application of the official receiver.

(2) An order under this section is an order summoning any of the following persons to appear before the court—

(a) the debtor;

(b) the debtor's spouse or former spouse or the debtor's civil partner or former civil partner;

(c) any person appearing to the court to be able to give information or assistance concerning the debtor or his dealings, affairs and property.

(3) The court may require a person falling within subsection (2)(c)—

(a) to provide a written account of his dealings with the debtor; or

(b) to produce any documents in his possession or under his control relating to the debtor or to the debtor's dealings, affairs or property.

(4) Subsection (5) applies where a person fails without reasonable excuse to appear before the court when he is summoned to do so by an order under this section.

(5) The court may cause a warrant to be issued to a constable or prescribed officer of the court—

(a) for the arrest of that person, and

(b) for the seizure of any records or other documents in that person's possession.

(6) The court may authorise a person arrested under such a warrant to be kept in custody, and anything seized under such a warrant to be held, in accordance with the rules, until that person is brought before the court under the warrant or until such other time as the court may order.

Offences E+W

251O False representations and omissions E+W

(1) A person who makes an application for a debt relief order is guilty of an offence if he knowingly or recklessly makes any false representation or omission in making the application or providing any information or documents to the official receiver in support of the application.

(2) A person who makes an application for a debt relief order is guilty of an offence if—

(a) he intentionally fails to comply with a duty under section 251J(3) in connection with the application; or

(b) he knowingly or recklessly makes any false representation or omission in providing any information to the official receiver in connection with such a duty or otherwise in connection with the application.

(3) It is immaterial for the purposes of an offence under subsection (1) or (2) whether or not a debt relief order is made as a result of the application.

(4) A person in respect of whom a debt relief order is made is guilty of an offence if—

(a) he intentionally fails to comply with a duty under section 251J(5) in connection with the order; or

(b) he knowingly or recklessly makes any false representation or omission in providing information to the official receiver in connection with such a duty or otherwise in connection with the performance by the official receiver of functions in relation to the order.

(5) It is immaterial for the purposes of an offence under subsection (4)—

(a) whether the offence is committed during or after the moratorium period; and

(b) whether or not the order is revoked after the conduct constituting the offence takes place.

251P Concealment or falsification of documents E+W

(1) A person in respect of whom a debt relief order is made is guilty of an offence if, during the moratorium period in relation to that order—

(a) he does not provide, at the request of the official receiver, all his books, papers and other records of which he has possession or control and which relate to his affairs;

(b) he prevents the production to the official receiver of any books, papers or other records relating to his affairs;

(c) he conceals, destroys, mutilates or falsifies, or causes or permits the concealment, destruction, mutilation or falsification of, any books, papers or other records relating his affairs;

(d) he makes, or causes or permits the making of, any false entries in any book, document or record relating to his affairs; or

(e) he disposes of, or alters or makes any omission in, or causes or permits the disposal, altering or making of any omission in, any book, document or record relating to his affairs.

(2) A person in respect of whom a debt relief order is made is guilty of an offence if—

(a) he did anything falling within paragraphs (c) to (e) of subsection (1) during the period of 12 months ending with the application date; or

(b) he did anything falling within paragraphs (b) to (e) of subsection (1) after that date but before the effective date.

(3) A person is not guilty of an offence under this section if he proves that, in respect of the conduct constituting the offence, he had no intent to defraud or to conceal the state of his affairs.

(4) In its application to a trading record subsection (2)(a) has effect as if the reference to 12 months were a reference to two years.

(5) In subsection (4) “trading record” means a book, document or record which shows or explains the transactions or financial position of a person's business, including—

(a) a periodic record of cash paid and received,

(b) a statement of periodic stock-taking, and

(c) except in the case of goods sold by way of retail trade, a record of goods sold and purchased which identifies the buyer and seller or enables them to be identified.

(6) It is immaterial for the purposes of an offence under this section whether or not the debt relief order in question is revoked after the conduct constituting the offence takes place (but no offence is committed under this section by virtue of conduct occurring after the order is revoked).

251Q Fraudulent disposal of property E+W

(1) A person in respect of whom a debt relief order is made is guilty of an offence if he made or caused to be made any gift or transfer of his property during the period between—

(a) the start of the period of two years ending with the application date; and

(b) the end of the moratorium period.

(2) The reference in subsection (1) to making a transfer of any property includes causing or conniving at the levying of any execution against that property.

(3) A person is not guilty of an offence under this section if he proves that, in respect of the conduct constituting the offence, he had no intent to defraud or to conceal the state of his affairs.

(4) For the purposes of subsection (3) a person is to be taken to have proved that he had no such intent if—

(a) sufficient evidence is adduced to raise an issue as to whether he had such intent; and

(b) the contrary is not proved beyond reasonable doubt.

(5) It is immaterial for the purposes of this section whether or not the debt relief order in question is revoked after the conduct constituting an offence takes place (but no offence is committed by virtue of conduct occurring after the order is revoked).

251R Fraudulent dealing with property obtained on credit E+W

(1) A person in respect of whom a debt relief order is made is guilty of an offence if during the relevant period he disposed of any property which he had obtained on credit and, at the time he disposed of it, had not paid for it.

(2) Any other person is guilty of an offence if during the relevant period he acquired or received property from a person in respect of whom a debt relief order was made (the “debtor”) knowing or believing—

(a) that the debtor owed money in respect of the property, and

(b) that the debtor did not intend, or was unlikely to be able, to pay the money he so owed.

(3) In subsections (1) and (2) “relevant period” means the period between—

(a) the start of the period of two years ending with the application date; and

(b) the determination date.

(4) A person is not guilty of an offence under subsection (1) or (2) if the disposal, acquisition or receipt of the property was in the ordinary course of a business carried on by the debtor at the time of the disposal, acquisition or receipt.

(5) In determining for the purposes of subsection (4) whether any property is disposed of, acquired or received in the ordinary course of a business carried on by the debtor, regard may be had, in particular, to the price paid for the property.

(6) A person is not guilty of an offence under subsection (1) if he proves that, in respect of the conduct constituting the offence, he had no intent to defraud or to conceal the state of his affairs.

(7) In this section references to disposing of property include pawning or pledging it; and references to acquiring or receiving property shall be read accordingly.

(8) It is immaterial for the purposes of this section whether or not the debt relief order in question is revoked after the conduct constituting an offence takes place (but no offence is committed by virtue of conduct occurring after the order is revoked).

251S Obtaining credit or engaging in business E+W

(1) A person in respect of whom a debt relief order is made is guilty of an offence if, during the relevant period—

(a) he obtains credit (either alone or jointly with any other person) without giving the person from whom he obtains the credit the relevant information about his status; or

(b) he engages directly or indirectly in any business under a name other than that in which the order was made without disclosing to all persons with whom he enters into any business transaction the name in which the order was made.

(2) For the purposes of subsection (1)(a) the relevant information about a person's status is the information that—

(a) a moratorium is in force in relation to the debt relief order,

(b) a debt relief restrictions order is in force in respect of him, or

(c) both a moratorium and a debt relief restrictions order is in force,

as the case may be.

(3) In subsection (1) “relevant period” means—

(a) the moratorium period relating to the debt relief order, or

(b) the period for which a debt relief restrictions order is in force in respect of the person in respect of whom the debt relief order is made,

as the case may be.

(4) Subsection (1)(a) does not apply if the amount of the credit is less than the prescribed amount (if any).

(5) The reference in subsection (1)(a) to a person obtaining credit includes the following cases—

(a) where goods are bailed to him under a hire-purchase agreement, or agreed to be sold to him under a conditional sale agreement;

(b) where he is paid in advance (in money or otherwise) for the supply of goods or services.

251T Offences: supplementary E+W

(1) Proceedings for an offence under this Part may only be instituted by the Secretary of State or by or with the consent of the Director of Public Prosecutions.

(2) It is not a defence in proceedings for an offence under this Part that anything relied on, in whole or in part, as constituting the offence was done outside England and Wales.

(3) A person guilty of an offence under this Part is liable to imprisonment or a fine, or both (but see section 430).

Supplementary E+W

251U Approved intermediaries E+W

(1) In this Part “approved intermediary” means an individual for the time being approved by a competent authority to act as an intermediary between a person wishing to make an application for a debt relief order and the official receiver.

(2) In this section “competent authority” means a person or body for the time being designated by the Secretary of State for the purposes of granting approvals under this section.

(3) Designation as a competent authority may be limited so as to permit the authority only to approve persons of a particular description.

(4) The Secretary of State may by regulations make provision as to—

(a) the procedure for designating persons or bodies as competent authorities;

(b) descriptions of individuals who are ineligible to be approved under this section;

(c) the procedure for granting approvals under this section;

(d) the withdrawal of designations or approvals under this section;

and provision made under paragraph (a) or (c) may include provision requiring the payment of fees.

(5) The rules may make provision about the activities to be carried out by an approved intermediary in connection with an application for a debt relief order, which may in particular include—

(a) assisting the debtor in making the application;

(b) checking that the application has been properly completed;

(c) sending the application to the official receiver.

(6) The rules may also make provision about other activities to be carried out by approved intermediaries.

(7) An approved intermediary may not charge a debtor any fee in connection with an application for a debt relief order.

(8) An approved intermediary is not liable to any person in damages for anything done or omitted to be done when acting (or purporting to act) as an approved intermediary in connection with a particular application by a debtor for a debt relief order.

(9) Subsection (8) does not apply if the act or omission was in bad faith.

(10) Regulations under subsection (4) shall be made by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament.

251V Debt relief restrictions orders and undertakings E+W

Schedule 4ZB (which makes provision about debt relief restrictions orders and debt relief restrictions undertakings) has effect.

251W Register of debt relief orders etc E+W

The Secretary of State must maintain a register of matters relating to—

(a) debt relief orders;

(b) debt relief restrictions orders; and

(c) debt relief restrictions undertakings.

251X Interpretation E+W

(1) In this Part—

• “the application date”, in relation to a debt relief order or an application for a debt relief order, means the date on which the application for the order is made to the official receiver;

• “approved intermediary” has the meaning given in section 251U(1);

• “debt relief order” means an order made by the official receiver under this Part;

• “debtor” means—

  (a)

  in relation to an application for a debt relief order, the applicant; and

  (b)

  in relation to a debt relief order, the person in relation to whom the order is made;

• “debt relief restrictions order” and “debt relief restrictions undertaking” means an order made, or an undertaking accepted, under Schedule 4ZB;

• “the determination date”, in relation to a debt relief order or an application for a debt relief order, means the date on which the application for the order is determined by the official receiver;

• “the effective date” has the meaning given in section 251E(7);

• “excluded debt” is to be construed in accordance with section 251A;

• “moratorium” and “moratorium period” are to be construed in accordance with sections 251G and 251H;

• “qualifying debt”, in relation to a debtor, has the meaning given in section 251A(2);

• “the register” means the register maintained under section 251W;

• “specified qualifying debt” has the meaning given in section 251G(1).

(2) In this Part references to a creditor specified in a debt relief order as the person to whom a qualifying debt is owed by the debtor include a reference to any person to whom the right to claim the whole or any part of the debt has passed, by assignment or operation of law, after the date of the application for the order.]

Part VIII E+W Individual Voluntary Arrangements

Modifications etc. (not altering text)

C909 Pt. VIII (ss. 252-263) applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 5

C910 Pt. VIII (ss. 252-263) restricted (6.4.1996 for the purpose only of authorising the making of regulations) by 1995 c. 26, ss. 91(3), 180(1) (with s. 121(5)); S.I. 1996/778, art. 2(5)(a). Sch. Pt. V

C911 Pt. VIII (ss. 252–263) applied with modifications by S.I. 1986/2142, arts. 1(2), 11, 13(3), 15

C912 Second Group of Parts (Pts. 8-11) modified (31.12.1996) by 1991 c. 57, Sch. 10 (as substituted by 1995 c. 25, s. 120(1), Sch. 22 para. 183 (with ss. 7(6), 115, 117); S.I. 1996/2909, art. 3)

Second Group of Parts (Pts. 8-11) modified (11.11.1999 for specified purposes and 6.4.2002 otherwise) by 1999 c. 30, s. 12(1); S.I. 2002/153, art. 2(b)

Moratorium for insolvent debtor E+W

252 Interim order of court. E+W

(1) In the circumstances specified below, the court may in the case of a debtor (being an individual) make an interim order under this section.

(2) An interim order has the effect that, during the period for which it is in force—

(a) no bankruptcy petition relating to the debtor may be presented or proceeded with,

[F569 (aa) no landlord or other person to whom rent is payable may exercise any right of forfeiture by peaceable re-entry in relation to premises let to the debtor in respect of a failure by the debtor to comply with any term or condition of his tenancy of such premises, except with the leave of the court] and

(b) no other proceedings, and no execution or other legal process, may be commenced or continued [F570 and no distress may be levied] against the debtor or his property except with leave of the court.

Textual Amendments

F569 S. 252(2)(aa) inserted (1.1.2003) by 2000 c. 39, s. 3, Sch. 3 para. 2(a); S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F570 Words in s. 252(2)(b) inserted (1.1.2003) by 2000 c. 39, s. 3, Sch. 3 para. 2(b); S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

253 Application for interim order. E+W

(1) Application to the court for an interim order may be made where the debtor intends to make a proposal [F571 under this Part, that is, a proposal]to his creditors for a composition in satisfaction of his debts or a scheme of arrangement of his affairs (from here on referred to, in either case, as a “voluntary arrangement”).

(2) The proposal must provide 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 [F572 and the nominee must be a person who is qualified to act as an insolvency practitioner, or authorised to act as nominee, in relation to the voluntary arrangement].

(3) Subject as follows, the application may be made—

(a) if the debtor is an undischarged bankrupt, by the debtor, the trustee of his estate, or the official receiver, and

(b) in any other case, by the debtor.

(4) An application shall not be made under subsection (3)(a) unless the debtor has given notice of [F573 the proposal] to the official receiver and, if there is one, the trustee of his estate.

F574 (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F571 Words in s. 253(1) inserted (1.1.2003) by 2000 c. 39, s. 3, Sch. 3 para. 3(a); S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F572 Words in s. 253(2) inserted (1.1.2003) by 2000 c. 39, s. 3, Sch. 3 para. 3(b); S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F573 Words in s. 253(4) substituted (1.1.2003) by 2000 c. 39, s. 3, Sch. 3 para. 3(c); S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F574 S. 253(5) omitted (6.4.2016) by virtue of Enterprise and Regulatory Reform Act 2013 (c. 24), s. 103(3), Sch. 19 para. 2; S.I. 2016/191, art. 2 (with art. 3)

Modifications etc. (not altering text)

C913 S. 253 amended (1.12.2001) by 2000 c. 8, s. 357(1); S.I. 2001/3538, art. 2(1)

C914 S. 253 restricted (24.3.2022) by Commercial Rent (Coronavirus) Act 2022 (c. 12), ss. 25(2)(b), 31(4) (with s. 30)

254 Effect of application. E+W

(1) At any time when an application under section 253 for an interim order is pending

[F575 (a) no landlord or other person to whom rent is payable may exercise any right of forfeiture by peaceable re-entry in relation to premises let to the debtor in respect of a failure by the debtor to comply with any term or condition of his tenancy of such premises, except with the leave of the court, and

(b)] , the court may [F576 forbid the levying of any distress on the debtor’s property or its subsequent sale, or both, and] stay any action, execution or other legal process against the property or person of the debtor.

(2) Any court in which proceedings are pending against an individual may, on proof that an application under that section has been made in respect of that individual, either stay the proceedings or allow them to continue on such terms as it thinks fit.

Textual Amendments

F575 S. 254(1)(a) inserted (1.1.2003) by 2000 c. 39, s. 3, Sch. 3 para. 4(a); S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F576 Words in S. 254(1)(b) inserted (1.1.2003) by 2000 c. 39, s. 3, Sch. 3 para. 4(b); S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

255 Cases in which interim order can be made. E+W

(1) The court shall not make an interim order on an application under section 253 unless it is satisfied—

(a) that the debtor intends to make [F577 a proposal under this Part];

(b) that on the day of the making of the application the debtor was an undischarged bankrupt or was able to [F578 make a bankruptcy application] ;

(c) that no previous application has been made by the debtor for an interim order in the period of 12 months ending with that day; and

(d) that the nominee under the debtor’s proposal F579 . . . is willing to act in relation to the proposal.

(2) The court may make an order if it thinks that it would be appropriate to do so for the purpose of facilitating the consideration and implementation of the debtor’s proposal.

(3) Where the debtor is an undischarged bankrupt, the interim order may contain provision as to the conduct of the bankruptcy, and the administration of the bankrupt’s estate, during the period for which the order is in force.

(4) Subject as follows, the provision contained in an interim order by virtue of subsection (3) may include provision staying proceedings in the bankruptcy or modifying any provision in this Group of Parts, and any provision of the rules in their application to the debtor’s bankruptcy.

(5) An interim order shall not, in relation to a bankrupt, make provision relaxing or removing any of the requirements of provisions in this Group of Parts, or of the rules, unless the court is satisfied that that provision is unlikely to result in any significant diminution in, or in the value of, the debtor’s estate for the purposes of the bankruptcy.

(6) Subject to the following provisions of this Part, an interim order made on an application under section 253 ceases to have effect at the end of the period of 14 days beginning with the day after the making of the order.

Textual Amendments

F577 Words in s. 255(1)(a) substituted (1.1.2003) by 2000 c. 39, s. 3, Sch. 3 para. 5(a); S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F578 Words in s. 255(1)(b) substituted (6.4.2016) by Enterprise and Regulatory Reform Act 2013 (c. 24), s. 103(3), Sch. 19 para. 3; S.I. 2016/191, art. 2 (with art. 3)

F579 Words in s. 255(1)(d) repealed (1.1.2003) by 2000 c. 39, ss. 3, 15, Sch. 3 paras. 5(b), Sch. 5; S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

256 Nominee’s report on debtor’s proposal. E+W

(1) Where an interim order has been made on an application under section 253, the nominee shall, before the order ceases to have effect, submit a report to the court stating—

(a) [F580 whether, in his opinion, the voluntary arrangement which the debtor is proposing has a reasonable prospect of being approved and implemented, [F581 and]

(aa)] whether, in his opinion, [F582 the debtor's creditors should] consider the debtors’ proposal F583 ...

F584 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) For the purpose of enabling the nominee to prepare his report the debtor shall submit to the nominee—

(a) a document setting out the terms of the voluntary arrangement which the debtor is proposing, and

(b) a statement of his affairs containing—

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

(ii) such other information as may be prescribed.

[F585 (3) The court may—

(a) on an application made by the debtor 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 the debtor 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 shall be replaced as such by another person qualified to act as an insolvency practitioner, or authorised to act as nominee, in relation to the voluntary arrangement.

(3A) The court may, on an application made by the debtor in a case where the nominee has failed to submit the report required by this section, direct that the interim order shall continue, or (if it has ceased to have effect) be renewed, for such further period as the court may specify in the direction.]

(4) The court may, on the application of the nominee, extend the period for which the interim order has effect so as to enable the nominee to have more time to prepare his report.

(5) If the court is satisfied on receiving the nominee’s report that [F586 the debtor's creditors should] consider the debtor’s proposal, the court shall direct that the period for which the interim order has effect shall be extended, for such further period as it may specify in the direction, for the purpose of enabling the debtor’s proposal to be considered by his creditors in accordance with the following provisions of this Part.

(6) The court may discharge the interim order if it is satisfied, on the application of the nominee—

(a) that the debtor has failed to comply with his obligations under subsection (2), or

(b) that for any other reason it would be inappropriate for [F587 the debtor's creditors] to consider the debtor’s proposal.

Textual Amendments

F580 Words in s. 256(1) inserted (1.1.2003) by 2000 c. 39, s. 3, Sch. 3 para. 6(a); S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F581 Word in s. 256(1)(a) inserted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 61(2); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

F582 Words in s. 256(1)(aa) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 61(3)(a); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

F583 Word in s. 256(1)(aa) omitted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 61(3)(b); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

F584 S. 256(1)(b) omitted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 61(4); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

F585 S. 256(3)(3A) substituted for s. 256(3) (1.1.2003) by 2000 c. 39, s. 3, Sch. 3 para. 6(b); S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F586 Words in s. 256(5) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 61(5); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

F587 Words in s. 256(6) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 61(6); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

Modifications etc. (not altering text)

C915 Ss. 256–263 applied with modifications by S.I. 1986/1999, art. 3, Sch. I Pt. III

[F588 Procedure where no interim order made] E+W

Textual Amendments

F588 Cross-heading preceding s. 256A, s. 256A and cross-heading before s. 257 inserted (1.1.2003) by 2000 c. 39, s. 3, Sch. 3 para. 7; S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

[F589 256A Debtor’s proposal and nominee’s report. E+W

(1) This section applies where a debtor (being an individual)—

(a) intends to make a proposal under this Part (but an interim order has not been made in relation to the proposal and no application for such an order is pending), and

(b) if he is an undischarged bankrupt, has given notice of the proposal to the official receiver and, if there is one, the trustee of his estate,

F590 ...

(2) For the purpose of enabling the nominee to prepare a report [F591 under subsection (3)], the debtor shall submit to the nominee—

(a) a document setting out the terms of the voluntary arrangement which the debtor is proposing, and

(b) a statement of his affairs containing—

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

(ii) such other information as may be prescribed.

(3) If the nominee is of the opinion that the debtor is an undischarged bankrupt, or is able to [F592 make a bankruptcy application] , the nominee shall, within 14 days (or such longer period as the court may allow) after receiving the document and statement mentioned in subsection (2), submit a [F593 report to the debtor's creditors] stating—

(a) whether, in his opinion, the voluntary arrangement which the debtor is proposing has a reasonable prospect of being approved and implemented, [F594 and]

(b) whether, in his opinion, [F595 the debtor's creditors should] consider the debtor’s proposal F596 ...

F597 (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) The court may—

(a) on an application made by the debtor 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 the debtor 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 shall be replaced as such by another person qualified to act as an insolvency practitioner, or authorised to act as nominee, in relation to the voluntary arrangement.

(5) The court may, on an application made by the nominee, extend the period within which the nominee is to submit his report.]

Textual Amendments

F589 Cross-heading preceding s. 256A, s. 256A and cross-heading before s. 257 inserted (1.1.2003) by 2000 c. 39, s. 3, Sch. 3 para. 7; S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F590 Words in s. 256A(1) omitted (6.4.2016) by virtue of Enterprise and Regulatory Reform Act 2013 (c. 24), s. 103(3), Sch. 19 para. 4(2); S.I. 2016/191, art. 2 (with art. 3)

F591 Words in s. 256A(2) substituted (6.4.2010) by The Legislative Reform (Insolvency) (Miscellaneous Provisions) Order 2010 (S.I. 2010/18), art. 8(1)(a)

F592 Words in s. 256A(3) substituted (6.4.2016) by Enterprise and Regulatory Reform Act 2013 (c. 24), s. 103(3), Sch. 19 para. 4(3); S.I. 2016/191, art. 2 (with art. 3)

F593 Words in s. 256A(3) substituted (6.4.2010) by The Legislative Reform (Insolvency) (Miscellaneous Provisions) Order 2010 (S.I. 2010/18), art. 8(1)(b)

F594 Word in s. 256A(3)(a) inserted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 62(2); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

F595 Words in s. 256A(3)(b) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 62(3)(a); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

F596 Word in s. 256A(3)(b) omitted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 62(3)(b); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

F597 S. 256A(3)(c) omitted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 62(4); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

Modifications etc. (not altering text)

C916 S. 256A restricted (24.3.2022) by Commercial Rent (Coronavirus) Act 2022 (c. 12), ss. 25(2)(b), 31(4) (with s. 30)

[F598 Creditors’ [F599 decisions]] E+W

Textual Amendments

F598 Cross-heading preceding s. 256A, s. 256A and cross-heading before s. 257 inserted (1.1.2003) by 2000 c. 39, s. 3, Sch. 3 para. 7; S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F599 Word in s. 257 cross-heading substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 63; S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

257 [F600 Consideration of debtor's proposal by creditors] E+W

[F601 (1) This section applies where it has been reported to the court under section 256 or to the debtor's creditors under section 256A that the debtor's creditors should consider the debtor's proposal.

(2) The nominee (or the nominee's replacement under section 256(3) or 256A(4)) must seek a decision from the debtor's creditors as to whether they approve the proposed voluntary arrangement (unless, in the case of a report to which section 256 applies, the court otherwise directs).

(2A) The decision is to be made by a creditors' decision procedure.

(2B) Notice of the creditors' decision procedure must be given to every creditor of the debtor of whose claim and address the nominee (or the nominee's replacement) is aware.]

(3) For this purpose the creditors of a debtor who is an undischarged bankrupt include—

(a) every person who is a creditor of the bankrupt in respect of a bankruptcy debt, and

(b) every person who would be such a creditor if the bankruptcy had commenced on the date on which notice of the [F602 creditors' decision procedure] is given.

Textual Amendments

F600 S. 257 heading substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 64(4); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

F601 S. 257(1)-(2B) substituted for s. 257(1)(2) (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 64(2); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

F602 Words in s. 257(3)(b) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 64(3); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

Modifications etc. (not altering text)

C917 Ss. 256–263 applied with modifications by S.I. 1986/1999, art. 3, Sch. I Pt. III

C918 S. 257 amended (1.12.2001) by 2000 c. 8, s. 357(1); S.I. 2001/3538, art. 2(1)

Consideration and implementation of debtor’s proposal E+W

258 [F603 Approval of debtor's proposal] E+W

[F604 (1) This section applies where under section 257 the debtor's creditors are asked to decide whether to approve the proposed voluntary arrangement.]

(2) The [F605 creditors] may approve the proposed voluntary arrangement with [F606 or without] modifications, but shall not [F607 approve it with modifications] unless the debtor consents to each modification.

(3) The modifications subject to which the proposed voluntary arrangement may be approved may include one conferring the functions proposed to be conferred on the nominee on another person qualified to act as an insolvency practitioner [F608 or authorised to act as nominee, in relation to the voluntary arrangement].

But they shall not include any modification by virtue of which the proposal ceases to be a proposal [F608 under this Part].

(4) The [F609 creditors] shall not approve any proposal or modification which affects the right of a secured creditor of the debtor to enforce his security, except with the concurrence of the creditor concerned.

(5) Subject as follows, the [F610 creditors] shall not approve any proposal or modification under which—

(a) any preferential debt of the debtor is to be paid otherwise than in priority to such of his debts as are not preferential debts, F611 ...

[F612 (aa) any ordinary preferential debt of the debtor is to be paid otherwise than in priority to any secondary preferential debts that the debtor may have,]

(b) a preferential creditor of the debtor is to be paid an amount in respect of [F613 an ordinary preferential debt] that bears to that debt a smaller proportion than is borne to [F614 another ordinary] preferential debt by the amount that is to be paid in respect of that other debt [F615 , F616 ...

(c) a preferential creditor of the debtor 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.] [F617 or

(d) if the debtor is a relevant financial institution (see section 387A), any non-preferential debt is to be paid otherwise than in accordance with the rules in section 328(3A) (reading references to the bankrupt as references to the debtor),]

However, the [F610 creditors] may approve such a proposal or modification with the concurrence of the F618 ... creditor concerned.

F619 (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) In this section “preferential debt” [F620 , "ordinary preferential debt” and “secondary preferential debt” each has] the meaning given by section 386 in Part XII; and “preferential creditor” is to be construed accordingly.

Textual Amendments

F603 S. 258 heading substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 65(6); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

F604 S. 258(1) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 65(2); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

F605 Word in s. 258(2) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 65(3); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

F606 Words in s. 258(2) inserted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 65(4)(a); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

F607 Words in s. 258(2) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 65(4)(b); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

F608 Words in s. 258(3) substituted (1.1.2003) by 2000 c. 39, s. 3, Sch. 3 para. 9; S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F609 Word in s. 258(4) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 65(3); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

F610 Word in s. 258(5) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 65(3); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

F611 Word in s. 258(5)(a) omitted (1.1.2015) by virtue of The Banks and Building Societies (Depositor Preference and Priorities) Order 2014 (S.I. 2014/3486), arts. 1(2), 6(2)(a) (with art. 3)

F612 S. 258(5)(aa) inserted (1.1.2015) by The Banks and Building Societies (Depositor Preference and Priorities) Order 2014 (S.I. 2014/3486), arts. 1(2), 6(2)(b) (with art. 3)

F613 Words in s. 258(5)(b) substituted (1.1.2015) by The Banks and Building Societies (Depositor Preference and Priorities) Order 2014 (S.I. 2014/3486), arts. 1(2), 6(2)(c)(i) (with art. 3)

F614 Words in s. 258(5)(b) substituted (1.1.2015) by The Banks and Building Societies (Depositor Preference and Priorities) Order 2014 (S.I. 2014/3486), arts. 1(2), 6(2)(c)(ii) (with art. 3)

F615 S. 258(5)(c) and word inserted (1.1.2015) by The Banks and Building Societies (Depositor Preference and Priorities) Order 2014 (S.I. 2014/3486), arts. 1(2), 6(2)(d) (with art. 3)

F616 Word in s. 258(5)(b) omitted (19.12.2018) by virtue of The Banks and Building Societies (Priorities on Insolvency) Order 2018 (S.I. 2018/1244), arts. 1(2), 7(a) (with art. 3)

F617 S. 258(5)(d) and word inserted (19.12.2018) by The Banks and Building Societies (Priorities on Insolvency) Order 2018 (S.I. 2018/1244), arts. 1(2), 7(b) (with art. 3)

F618 Word in s. 258(5) omitted (19.12.2018) by virtue of The Banks and Building Societies (Priorities on Insolvency) Order 2018 (S.I. 2018/1244), arts. 1(2), 7(c) (with art. 3)

F619 S. 258(6) omitted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 65(5); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

F620 Words in s. 258(7) substituted (1.1.2015) by The Banks and Building Societies (Depositor Preference and Priorities) Order 2014 (S.I. 2014/3486), arts. 1(2), 6(3) (with art. 3)

Modifications etc. (not altering text)

C919 Ss. 256-263 applied (with modifications) by S.I. 1986/1999, art. 3, Sch. I Pt. III

C920 S. 258 modified (10.8.2005) by The Insurers (Reorganisation and Winding Up) Regulations 2004 (S.I. 2004/353), reg. 33(5) (as modified (10.8.2005) by S.I. 2005/1998, regs. 2(3), {40(1)-(4)(11)})

C921 S. 258 excluded (16.6.2016) by The Education (Postgraduate Masters Degree Loans) Regulations 2016 (S.I. 2016/606), regs. 1(1), 97(1)(c)

259 Report of decisions to court. E+W

[F621 (1) When pursuant to section 257 the debtor's creditors have decided whether to approve the debtor's proposal (with or without modifications), the nominee (or the nominee's replacement under section 256(3) or 256A(4)) must—

(a) give notice of the creditors' decision to such persons as may be prescribed, and

(b) where the creditors considered the debtor's proposal pursuant to a report to the court under section 256(1)(aa), report the creditors' decision to the court.]

(2) If the report is that the [F622 creditors have] declined (with or without modifications) to approve the [F623 voluntary arrangement proposed under section 256], the court may discharge any interim order which is in force in relation to the debtor.

Textual Amendments

F621 S. 259(1) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 66(2); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

F622 Words in s. 259(2) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 66(3); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

F623 Words in s. 259(2) substituted (6.4.2010) by The Legislative Reform (Insolvency) (Miscellaneous Provisions) Order 2010 (S.I. 2010/18), art. 8(3)(b)

Modifications etc. (not altering text)

C922 Ss. 256–263 applied with modifications by S.I. 1986/1999, art. 3, Sch. I Pt. III

260 Effect of approval. E+W

(1) This section has effect where [F624 pursuant to section 257 the debtor's creditors decide to approve] the proposed voluntary arrangement (with or without modifications).

(2) The approved arrangement—

(a) takes effect as if made by the debtor [F625 at the time the creditors decided to approve the proposal], and

[F626 (b) binds every person who in accordance with the rules—

(i) was entitled to vote [F627 in the creditors' decision procedure by which the decision to approve the proposal was made], or

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

as if he were a party to the 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 debtor shall at that time become liable to pay to that person the amount payable under the arrangement.]

F628 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) Any interim order in force in relation to the debtor immediately before the end of the period of 28 days beginning with the day on which the report with respect to the creditors’ [F629 decision] was made to the court under section 259 ceases to have effect at the end of that period.

This subsection applies except to such extent as the court may direct for the purposes of any application under section 262 below.

(5) Where proceedings on a bankruptcy petition have been stayed by an interim order which ceases to have effect under subsection (4), that petition is deemed, unless the court otherwise orders, to have been dismissed.

Textual Amendments

F624 Words in s. 260(1) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 67(2); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

F625 Words in s. 260(2)(a) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 67(3)(a); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

F626 S. 260(2)(b)(2A) substituted for 260(2)(b) (1.1.2003) by 2000 c. 39, s. 3, Sch. 3 para. 10; S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F627 Words in s. 260(2)(b)(i) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 67(3)(b); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

F628 S. 260(3) omitted (1.10.2015) by virtue of Deregulation Act 2015 (c. 20), s. 115(7), Sch. 6 para. 2(11)(a) (with Sch. 6 para. 3); S.I. 2015/1732, art. 2(e)(i)

F629 Word in s. 260(4) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 67(4); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

Modifications etc. (not altering text)

C923 Ss. 256–263 applied with modifications by S.I. 1986/1999, art. 3, Sch. I Pt. III

[F630 261 Additional effect on undischarged bankrupt E+W

(1) This section applies where—

(a) [F631 pursuant to section 257 the debtor's creditors decide to approve] the proposed voluntary arrangement (with or without modifications), and

(b) the debtor is an undischarged bankrupt.

(2) Where this section applies the court shall annul the bankruptcy order on an application made—

(a) by the bankrupt, or

(b) where the bankrupt has not made an application within the prescribed period, by the official receiver.

(3) An application under subsection (2) may not be made—

(a) during the period specified in section 262(3)(a) during which the [F632 creditors' decision] can be challenged by application under section 262,

(b) while an application under that section is pending, or

(c) while an appeal in respect of an application under that section is pending or may be brought.

(4) Where this section applies the court may give such directions about the conduct of the bankruptcy and the administration of the bankrupt’s estate as it thinks appropriate for facilitating the implementation of the approved voluntary arrangement.]

Textual Amendments

F630 S. 261 substituted (1.4.2004) by 2002 c. 40, ss. 264(1), 279, Sch. 22 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))

F631 Words in s. 261(1)(a) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 68(2); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

F632 Words in s. 261(3)(a) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 68(3); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

262 Challenge of [F633 creditors'] decision. E+W

(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 approved by [F634 a decision of the debtor's creditors pursuant to] section 257 unfairly prejudices the interests of a creditor of the debtor;

(b) that there has been some material irregularity [F635 in relation to a creditors' decision procedure instigated under that section].

(2) The persons who may apply under this section are—

(a) the debtor;

[F636 (b) a person who—

(i) was entitled, in accordance with the rules, to vote [F637 in the creditors' decision procedure], or

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

(c) the nominee (or his replacement under section [F638 256(3), 256A(4)] or 258(3)); and

(d) if the debtor is an undischarged bankrupt, the trustee of his estate or the official receiver.

(3) An application under this section shall not be made

[F639 (a)] after the end of the period of 28 days beginning with the day on which [F640 the creditors decided whether to approve the proposed voluntary arrangement or, where a report was required to be made to the court under section 259(1)(b), the day on which the report was made] [F639 or

(b) in the case of a person who was not given notice of the [F641 creditors' decision procedure], after the end of the period of 28 days beginning with the day on which he became aware that [F642 a decision as to whether to approve the proposed voluntary arrangement had been made],

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

(4) Where on an application under this section the court is satisfied as to either of the grounds mentioned in subsection (1), it may do one or both of the following, namely—

(a) revoke or suspend any approval given by [F643 a decision of the debtor's creditors];

[F644 (b) direct any person to seek a decision from the debtor's creditors (using a creditors' decision procedure) as to whether they approve—

(i) any revised proposal the debtor may make, or

(ii) in a case falling within subsection (1)(b), the debtor's original proposal.]

(5) Where at any time after giving a direction under subsection (4)(b) [F645 in relation to] a revised proposal the court is satisfied that the debtor does not intend to submit such a proposal, the court shall revoke the direction and revoke or suspend any approval [F646 previously given by the debtor's creditors].

(6) Where the court gives a direction under subsection (4)(b), it may also give a direction continuing or, as the case may require, renewing, for such period as may be specified in the direction, the effect in relation to the debtor of any interim order.

(7) In any case where the court, on an application made under this section with respect to a creditors’ [F647 decision], gives a direction under subsection (4)(b) or 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—

(a) things done since the [F647 decision] under any voluntary arrangement approved by the meeting, and

(b) such things done since the [F647 decision] as could not have been done if any interim order had been in force in relation to the debtor when they were done.

(8) Except in pursuance of the preceding provisions of this section, [F648 the approval of a voluntary arrangement by a decision of the debtor's creditors pursuant to section 257 is not invalidated by any irregularity in relation to the creditors' decision procedure by which the decision was made.]

Textual Amendments

F633 Word in s. 262 heading substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 69(11); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

F634 Words in s. 262(1)(a) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 69(2); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

F635 Words in s. 262(1)(b) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 69(3); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

F636 S. 262(2)(b) substituted (1.1.2003) by 2000 c. 39, s. 3, Sch. 3 para. 11(1)(a); S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F637 Words in s. 262(2)(b)(i) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 69(4); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

F638 Words in s. 262(2)(c) substituted (1.1.2003) by 2000 c. 39, s. 3, Sch. 3 para. 11(1)(b); S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F639 Words in s. 262(3) inserted (1.1.2003) by 2000 c. 39, s. 3, Sch. 3 para. 11(2); S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F640 Words in s. 262(3)(a) substituted (26.5.2015) by Small Business, Enterprise and Employment Act 2015 (c. 26), ss. 134, 164(3)(i)(iv)

F641 Words in s. 262(3)(b) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 69(5)(a); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

F642 Words in s. 262(3)(b) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 69(5)(b); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

F643 Words in s. 262(4)(a) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 69(6); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

F644 S. 262(4)(b) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 69(7); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

F645 Words in s. 262(5) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 69(8)(a); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

F646 Words in s. 262(5) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 69(8)(b); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

F647 Word in s. 262(7) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 69(9); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

F648 Words in s. 262(8) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 69(10); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

Modifications etc. (not altering text)

C924 Ss. 256–263 applied with modifications by S.I. 1986/1999, art. 3, Sch. I Pt. III

C925 S. 262 amended (1.12.2001) by 2000 c. 8, s. 357(5)(a); S.I. 2001/3538, art. 2(1)

[F649 262A False representations etc. E+W

(1) If for the purpose of obtaining the approval of his creditors to a proposal for a voluntary arrangement, the debtor—

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

Textual Amendments

F649 S. 262A inserted (1.1.2003) by 2000 c. 39, s. 3, Sch. 3 para. 12; S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F650 262B Prosecution of delinquent debtors. E+W

(1) This section applies where a voluntary arrangement approved by a [F651 decision of the debtor's creditors pursuant to] section 257 has taken effect.

(2) If it appears to the nominee or supervisor that the debtor has been guilty of any offence in connection with the arrangement for which he is criminally liable, he shall forthwith—

(a) report the matter to the Secretary of State, and

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

(3) Where a prosecuting authority institutes criminal proceedings following any report under subsection (2), the nominee or, as the case may be, supervisor shall give the authority all assistance in connection with the prosecution which he is reasonably able to give.

• For this purpose, “prosecuting authority” means the Director of Public Prosecutions or the Secretary of State.

(4) The court may, on the application of the prosecuting authority, direct a nominee or supervisor to comply with subsection (3) if he has failed to do so.

Textual Amendments

F650 S. 262B inserted (1.1.2003) by 2000 c. 39, s. 3, Sch. 3 para. 12; S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F651 Words in s. 262B(1) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 70; S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

F652 262C Arrangements coming to an end prematurely. E+W

For the purposes of this Part, a voluntary arrangement approved by a [F653 decision of the debtor's creditors pursuant to] section 257 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 260(2)(b)(i).

Textual Amendments

F652 S. 262C inserted (1.1.2003) by 2000 c. 39, s. 3, Sch. 3 para. 12; S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F653 Words in s. 262C substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 71; S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

263 Implementation and supervision of approved voluntary arrangement. E+W

(1) This section applies where a voluntary arrangement approved by a [F654 decision of the debtor's creditors pursuant to] section 257 has taken effect.

(2) The person who is for the time being carrying out, in relation to the voluntary arrangement, the functions conferred by virtue of the approval on the nominee (or his replacement under section [F655 256(3), 256A(4)] or 258(3)) shall be known as the supervisor of the voluntary arrangement.

(3) If the debtor, any of his creditors or any other person is dissatisfied by any act, omission or decision of the supervisor, he may apply to the court; and on such an 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 may apply to the court for directions in relation to any particular matter arising under the voluntary arrangement.

(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 [F656 or authorised to act as supervisor, in relation to the voluntary arrangement], either in substitution for the existing supervisor or to fill a vacancy.

F657 ...

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

Textual Amendments

F654 Words in s. 263(1) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 72; S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

F655 Words in s. 263(2) substituted (1.1.2003) by 2000 c. 39, s. 3, Sch. 3 para. 13(a); S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F656 Words in s. 263(5) substituted (1.1.2003) by 2000 c. 39, s. 3, Sch. 3 para. 13(b); S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F657 Words in s. 263(5) omitted (1.10.2015) by virtue of Deregulation Act 2015 (c. 20), s. 115(7), Sch. 6 para. 2(11)(b) (with Sch. 6 para. 3); S.I. 2015/1732, art. 2(e)(i)

Modifications etc. (not altering text)

C926 Ss. 256–263 applied with modifications by S.I. 1986/1999, art. 3, Sch. I Pt. III

S. 263 amended (1.12.2001) by 2000 c. 8, s. 357(5)(b); S.I. 2001/3538, art. 2(1)

F658 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E+W

Textual Amendments

F658 S. 263A-263G and crossheading omitted (26.5.2015) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), ss. 135(1), 164(3)(i)(iv) (with s. 135(4))

F658 263A Availability E+W

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

F658 263B Decision E+W

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

F658 263C Result E+W

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

F658 263D Approval of voluntary arrangement E+W

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

F658 263E Implementation E+W

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

F658 263F Revocation E+W

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

F658 263G Offences E+W

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

Part IX E+W Bankruptcy

Modifications etc. (not altering text)

C927 Pt. IX (ss. 264-371) excluded by Drug Trafficking Offences Act 1986 (c. 32, SIF 39:1), s. 15(1)(7)

Pt. IX excluded by Criminal Justice Act 1988 (c. 33, SIF 39:1), ss. 84, 123, Sch. 8 para. 16

C928 Pt. IX (ss. 264-371) amended by Criminal Justice (Scotland) Act 1987 (c.41, SIF 39:1), ss. 30(6), 34(1), 47(4)(a)

C929 Pt. IX (except ss. 269, 270, 287, 297) applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 8(7)-(9), Sch. 4 Pt. II, Sch. 7 (as amended (1.7.2005) by S.I. 2005/1516, art. 10)

Pt. IX (except ss. 273, 274, 287, 297) applied (1.12.1994) by S.I. 1994/2421, art. 10(4)(5)(a)

C930 Pt. IX (except ss. 273, 274, 287) applied (1.12.1994) by S.I. 1994/2421, art. 11(1)(2)(a), Sch. 7 (as amended (1.7.2005) by S.I. 2005/1516, art. 10 and S.I. 1994/2421, Sch. 7 para. 21 (1.1.2015) by The Banks and Building Societies (Depositor Preference and Priorities) Order 2014 (S.I. 2014/3486), arts. 1(2), 15 (with art. 3))

C931 Pt. IX (ss. 264-371) modified (3.2.1995) by 1994 c. 37, ss. 32(1), 69(2), Sch. 2 para. 5 (with s. 66(2))

Pt. IX modified (31.3.1996) by 1995 c. 20, s. 110(1), Sch. 4 para. 2(1); S.I. 1996/517, art. 3(2) (subject to transitional provisions and savings in arts. 4-6, Sch. 2)

Pt. IX modified (1.4.1996) by 1995 c. 43, ss. 44, 50(2), Sch. 2 para. 2(1)

Pt. IX modified (1.9.2001 subject to art. 3 of the commencing S.I.) by 2001 c. 17, s. 1(3), Sch. 6 para. 9(1) (with s. 78); S.I. 2001/2161, arts. 2, 3 (as amended by S.I. 2001/2304, art. 2)

Pt. IX modified (24.3.2003) by 2002 c. 29, ss. 417, 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))

C932 Pt. IX (ss. 264-371) restricted (6.4.1996 for the purpose only of authorising the making of regulations) by 1995 c. 26, ss. 91(3), 180(1) (with s. 121(5)); S.I. 1996/778, art. 2(5)(a), Sch. Pt. V

C933 Second Group of Parts (Pts. 8-11) modified (31.12.1996) by 1991 c. 57, Sch. 10 (as substituted by 1995 c. 25, s. 120(1), Sch. 22 para. 183 (with ss. 7(6), 115, 117); S.I. 1996/2909, art. 3)

Second Group of Parts (Pts. 8-11) modified (11.11.1999 for specified purposes and 6.4.2002 otherwise) by 1999 c. 30, s. 12(1); S.I. 2002/153, art. 2(b)

[F659 CHAPTER A1 E+W Adjudicators: bankruptcy applications by debtors and bankruptcy orders

Textual Amendments

F659 Pt. 9 Ch. A1 inserted (25.4.2013 for specified purposes, 6.4.2016 in so far as not already in force) by Enterprise and Regulatory Reform Act 2013 (c. 24), s. 103(1)(i)(3), Sch. 18; S.I. 2016/191, art. 2

263H Bankruptcy applications to an adjudicator E+W

(1) An individual may make an application to an adjudicator in accordance with this Chapter for a bankruptcy order to be made against him or her.

(2) An individual may make a bankruptcy application only on the ground that the individual is unable to pay his or her debts.

263I Debtors against whom an adjudicator may make a bankruptcy order E+W

(1) An adjudicator has jurisdiction to determine a bankruptcy application only if—

(a) the centre of the debtor's main interests is in England and Wales, or

[F660 (ab) the centre of the debtor's main interests is in a member State (other than Denmark) and the debtor has an establishment in England and Wales, or]

(b) F661 ... the test in subsection (2) is met.

(2) The test is that—

(a) the debtor is domiciled in England and Wales, or

(b) at any time in the period of three years ending with the day on which the application is made to the adjudicator, the debtor—

(i) has been ordinarily resident, or has had a place of residence, in England and Wales, or

(ii) has carried on business in England and Wales.

(3) The reference in subsection (2) to the debtor carrying on business includes—

(a) the carrying on of business by a firm or partnership of which the debtor is a member, and

(b) the carrying on of business by an agent or manager for the debtor or for such a firm or partnership.

(4) In this section, references to the centre of the debtor's main interests have the same meaning as in Article 3 of the [F662 EU Regulation].

[F663 (5) In this section “establishment” has the same meaning as in Article 2(10) of the EU Regulation.]

Textual Amendments

F660 S. 263I(1)(ab) inserted (31.12.2020) by The Insolvency (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/146), reg. 1(3), Sch. para. 31(2)(a) (with regs. 4, 5); 2020 c. 1, Sch. 5 para. 1(1)

F661 Words in s. 263I(1)(b) omitted (31.12.2020) by virtue of The Insolvency (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/146), reg. 1(3), Sch. para. 31(2)(b) (with regs. 4, 5); 2020 c. 1, Sch. 5 para. 1(1)

F662 Words in s. 263I(4) substituted (26.6.2017) by The Insolvency Amendment (EU 2015/848) Regulations 2017 (S.I. 2017/702), reg. 1, Sch. para. 18 (with regs. 3, 4)

F663 S. 263I(5) inserted (31.12.2020) by The Insolvency (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/146), reg. 1(3), Sch. para. 31(3) (with regs. 4, 5); 2020 c. 1, Sch. 5 para. 1(1)

263J Conditions applying to bankruptcy application E+W

(1) A bankruptcy application must include—

(a) such particulars of the debtor's creditors, debts and other liabilities, and assets, as may be prescribed, and

(b) such other information as may be prescribed.

(2) A bankruptcy application is not to be regarded as having been made unless any fee or deposit required in connection with the application by an order under section 415 has been paid to such person, and within such period, as may be prescribed.

(3) A bankruptcy application may not be withdrawn.

(4) A debtor must notify the adjudicator if, at any time before a bankruptcy order is made against the debtor or the adjudicator refuses to make such an order—

(a) the debtor becomes able to pay his or her debts, or

(b) a bankruptcy petition has been presented to the court in relation to the debtor.

263K Determination of bankruptcy application E+W

(1) After receiving a bankruptcy application, an adjudicator must determine whether the following requirements are met—

(a) the adjudicator had jurisdiction under section 263I to determine the application on the date the application was made,

(b) the debtor is unable to pay his or her debts at the date of the determination,

(c) no bankruptcy petition is pending in relation to the debtor at the date of the determination, and

(d) no bankruptcy order has been made in respect of any of the debts which are the subject of the application at the date of the determination.

(2) If the adjudicator is satisfied that each of the requirements in subsection (1) are met, the adjudicator must make a bankruptcy order against the debtor.

(3) If the adjudicator is not so satisfied, the adjudicator must refuse to make a bankruptcy order against the debtor.

(4) The adjudicator must make a bankruptcy order against the debtor or refuse to make such an order before the end of the prescribed period (“the determination period”).

263L Adjudicator's requests for further information E+W

(1) An adjudicator may at any time during the determination period request from the debtor information that the adjudicator considers necessary for the purpose of determining whether a bankruptcy order must be made.

(2) The adjudicator may specify a date before which information requested under subsection (1) must be provided; but that date must not be after the end of the determination period.

(3) If the rules so prescribe, a request under subsection (1) may include a request for information to be given orally.

(4) The rules may make provision enabling or requiring an adjudicator to request information from persons of a prescribed description in prescribed circumstances.

263M Making of bankruptcy order E+W

(1) This section applies where an adjudicator makes a bankruptcy order as a result of a bankruptcy application.

(2) The order must be made in the prescribed form.

(3) The adjudicator must—

(a) give a copy of the order to the debtor, and

(b) give notice of the order to persons of such description as may be prescribed.

263N Refusal to make a bankruptcy order: review and appeal etc. E+W

(1) Where an adjudicator refuses to make a bankruptcy order on a bankruptcy application, the adjudicator must give notice to the debtor—

(a) giving the reasons for the refusal, and

(b) explaining the effect of subsections (2) to (5).

(2) If requested by the debtor before the end of the prescribed period, the adjudicator must review the information which was available to the adjudicator when the determination that resulted in the refusal was made.

(3) Following a review under subsection (2) the adjudicator must—

(a) confirm the refusal to make a bankruptcy order, or

(b) make a bankruptcy order against the debtor.

(4) Where the adjudicator confirms a refusal under subsection (3), the adjudicator must give notice to the debtor—

(a) giving the reasons for the confirmation, and

(b) explaining the effect of subsection (5).

(5) If the refusal is confirmed under subsection (3), the debtor may appeal against the refusal to the court before the end of the prescribed period.

263O False representations and omissions E+W

(1) It is an offence knowingly or recklessly to make any false representation or omission in—

(a) making a bankruptcy application to an adjudicator, or

(b) providing any information to an adjudicator in connection with a bankruptcy application.

(2) It is an offence knowingly or recklessly to fail to notify an adjudicator of a matter in accordance with a requirement imposed by or under this Part.

(3) It is immaterial for the purposes of an offence under this section whether or not a bankruptcy order is made as a result of the application.

(4) It is not a defence in proceedings for an offence under this section that anything relied on, in whole or in part, as constituting the offence was done outside England and Wales.

(5) Proceedings for an offence under this section may only be instituted—

(a) by the Secretary of State, or

(b) by or with the consent of the Director of Public Prosecutions.]

Chapter I E+W [F664 The court: bankruptcy petitions and bankruptcy orders]

Textual Amendments

F664 Pt. 9 Ch. 1 heading substituted (6.4.2016) by Enterprise and Regulatory Reform Act 2013 (c. 24), s. 103(3), Sch. 19 para. 5; S.I. 2016/191, art. 2 (with art. 3)

Preliminary E+W

264 Who may present a bankruptcy petition. E+W

(1) A petition for a bankruptcy order to be made against an individual may be presented to the court in accordance with the following provisions of this Part—

(a) by one of the individual’s creditors or jointly by more than one of them,

F665 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F666 (ba) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F666 (bb) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c) by the supervisor of, or any person (other than the individual) who is for the time being bound by, a voluntary arrangement proposed by the individual and approved under Part VIII, or

(d) where a criminal bankruptcy order has been made against the individual, by the Official Petitioner or by any person specified in the order in pursuance of section 39(3)(b) of the M17 Powers of Criminal Courts Act 1973.

(2) Subject to those provisions, the court may make a bankruptcy order on any such petition.

Textual Amendments

F665 S. 264(1)(b) omitted (6.4.2016) by virtue of Enterprise and Regulatory Reform Act 2013 (c. 24), s. 103(3), Sch. 19 para. 6; S.I. 2016/191, art. 2 (with art. 3)

F666 S. 264(1)(ba)(bb) omitted (31.12.2020) by virtue of The Insolvency (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/146), reg. 1(3), Sch. para. 32 (with regs. 4, 5); 2020 c. 1, Sch. 5 para. 1(1)

Modifications etc. (not altering text)

C934 S. 264 modified (1.12.1994) by S.I. 1994/2421, art. 11(2)(3), Sch. 7 para. 2 (as amended (1.12.2001) by S.I. 2001/3649, art. 469)

C935 S. 264 amended (20.7.2001 for certain purposes and otherwise 1.12.2001) by 2000 c. 8, s. 372(1); S.I. 2001/2632, art. 2, Sch. Pt. I; S.I. 2001/3538, art. 2(1)

C936 S. 264 applied (with modifications) by S.I. 1986/1999, art. 3, Sch. 1 Pt. II (as amended (31.5.2002) by S.I. 2002/1309, art. 3(1)(4); (6.4.2016) by The Enterprise and Regulatory Reform Act 2013 (Consequential Amendments) (Bankruptcy) and the Small Business, Enterprise and Employment Act 2015 (Consequential Amendments) Regulations 2016 (S.I. 2016/481), reg. 1, Sch. 2 para. 2(7)(a); and (8.12.2017) by The Insolvency (Miscellaneous Amendments) Regulations 2017 (S.I. 2017/1119), reg. 1(1), Sch. 3 para. 1(2))

C937 S. 264 applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 10(1)(a)(6), Sch. 4 Pts. I, II paras. 1, 8, Sch. 6 para. 2 (as amended (1.7.2005) by S.I. 2005/1516, art. 5(b); and (8.12.2017) by The Insolvency (Miscellaneous Amendments) Regulations 2017 (S.I. 2017/1119), reg. 1(1), Sch. 2 para. 6)

Marginal Citations

M17 1973 c. 62.

[F667 265 Creditor's petition: debtors against whom the court may make a bankruptcy order. E+W

(1) A bankruptcy petition may be presented to the court under section 264(1)(a) only if—

(a) the centre of the debtor's main interests is in England and Wales, or

[F668 (ab) the centre of the debtor's main interests is in a member State (other than Denmark) and the debtor has an establishment in England and Wales, or]

(b) F669 ... the test in subsection (2) is met.

(2) The test is that—

(a) the debtor is domiciled in England and Wales, or

(b) at any time in the period of three years ending with the day on which the petition is presented, the debtor—

(i) has been ordinarily resident, or has had a place of residence, in England and Wales, or

(ii) has carried on business in England and Wales.

(3) The reference in subsection (2) to the debtor carrying on business includes—

(a) the carrying on of business by a firm or partnership of which the debtor is a member, and

(b) the carrying on of business by an agent or manager for the debtor or for such a firm or partnership.

(4) In this section, references to the centre of the debtor's main interests have the same meaning as in Article 3 of the [F670 EU Regulation].

[F671 (5) In this section “establishment” has the same meaning as in Article 2(10) of the EU Regulation.]]

Textual Amendments

F667 S. 265 substituted (6.4.2016) by Enterprise and Regulatory Reform Act 2013 (c. 24), s. 103(3), Sch. 19 para. 7; S.I. 2016/191, art. 2 (with art. 3)

F668 S. 265(1)(ab) inserted (31.12.2020) by The Insolvency (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/146), reg. 1(3), Sch. para. 33(2)(a) (with regs. 4, 5); 2020 c. 1, Sch. 5 para. 1(1)

F669 Words in s. 265(1)(b) omitted (31.12.2020) by virtue of The Insolvency (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/146), reg. 1(3), Sch. para. 33(2)(b) (with regs. 4, 5); 2020 c. 1, Sch. 5 para. 1(1)

F670 Words in s. 265(4) substituted (26.6.2017) by The Insolvency Amendment (EU 2015/848) Regulations 2017 (S.I. 2017/702), reg. 1, Sch. para. 20 (with regs. 3, 4)

F671 S. 265(5) inserted (31.12.2020) by The Insolvency (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/146), reg. 1(3), Sch. para. 33(3) (with regs. 4, 5); 2020 c. 1, Sch. 5 para. 1(1)

Modifications etc. (not altering text)

C938 S. 265 modified (1.12.1994) by S.I. 1994/2421, art. 11(2)(3), Sch. 7 para. 3

C939 S. 265 applied (with modifications) (1.12.1994) by S.I. 1994/2421, arts. 8(3)(9), 10(1)(a), Sch. 4 Pt. II para. 5, Sch. 6 (as amended (8.12.2017) by The Insolvency (Miscellaneous Amendments) Regulations 2017 (S.I. 2017/1119), reg. 1(1), Sch. 2 para. 3)

C940 S. 265 applied (with modifications) by S.I. 1986/1999, art. 3, Sch. 1 Pt. 2 (as amended (8.12.2017) by The Insolvency (Miscellaneous Amendments) Regulations 2017 (S.I. 2017/1119), reg. 1(1), Sch. 3 para. 1(2) and as amended (31.12.2020) by The Insolvency (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/146), reg. 1(3), Sch. para. 108(2)(a)(b) (with regs. 4, 5); 2020 c. 1, Sch. 5 para. 1(1))

266 Other preliminary conditions. E+W

(1) Where a bankruptcy petition relating to an individual is presented by a person who is entitled to present a petition under two or more paragraphs of section 264(1), the petition is to be treated for the purposes of this Part as a petition under such one of those paragraphs as may be specified in the petition.

(2) A bankruptcy petition shall not be withdrawn without the leave of the court.

(3) The court has a general power, if it appears to it appropriate to do so on the grounds that there has been a contravention of the rules or for any other reason, to dismiss a bankruptcy petition or to stay proceedings on such a petition; and, where it stays proceedings on a petition, it may do so on such terms and conditions as it thinks fit.

(4) Without prejudice to subsection (3), where a petition under section 264(1)(a) F672 ... or (c) in respect of an individual is pending at a time when a criminal bankruptcy order is made against him, or is presented after such an order has been so made, the court may on the application of the Official Petitioner dismiss the petition if it appears to it appropriate to do so.

Textual Amendments

F672 Word in s. 266(4) omitted (6.4.2016) by virtue of Enterprise and Regulatory Reform Act 2013 (c. 24), s. 103(3), Sch. 19 para. 8; S.I. 2016/191, art. 2 (with art. 3)

Modifications etc. (not altering text)

C941 S. 266 modified (1.12.1994) by S.I. 1994/2421, art. 11(2)(3), Sch. 7 para. 4

C942 S. 266 applied with modifications by S.I. 1986/1999, art. 3, Sch. 1 Pt. 2 (as amended (31.5.2002) by S.I. 2002/1309, art. 3(2)(4) and as amended (31.12.2020) by The Insolvency (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/146), reg. 1(3), Sch. para. 108(2)(c) (with regs. 4, 5); 2020 c. 1, Sch. 5 para. 1(1))

Creditor’s petition E+W

267 Grounds of creditor’s petition. E+W

(1) A creditor’s petition must be in respect of one or more debts owed by the debtor, and the petitioning creditor or each of the petitioning creditors must be a person to whom the debt or (as the case may be) at least one of the debts is owed.

(2) Subject to the next three sections, a creditor’s petition may be presented to the court in respect of a debt or debts only if, at the time the petition is presented—

(a) the amount of the debt, or the aggregate amount of the debts, is equal to or exceeds the bankruptcy level,

(b) the debt, or each of the debts, is for a liquidated sum payable to the petitioning creditor, or one or more of the petitioning creditors, either immediately or at some certain, future time, and is unsecured,

(c) the debt, or each of the debts, is a debt which the debtor appears either to be unable to pay or to have no reasonable prospect of being able to pay, and

(d) there is no outstanding application to set aside a statutory demand served (under section 268 below) in respect of the debt or any of the debts.

[F673 (3) A debt is not to be regarded for the purposes of subsection (2) as a debt for a liquidated sum by reason only that the amount of the debt is specified in a criminal bankruptcy order.]

(4) “The bankruptcy level” is [F674 £5,000] but the Secretary of State may by order in a statutory instrument substitute any amount specified in the order for that amount or (as the case may be) for the amount which by virtue of such an order is for the time being the amount of the bankruptcy level.

(5) An order shall not be made under subsection (4) unless a draft of it has been laid before, and approved by a resolution of, each House of Parliament.

Textual Amendments

F673 S. 267(3) repealed (prosp.) by Criminal Justice Act 1988 (c. 33, SIF 39:1), ss. 123, 170, 171, Sch. 8 para. 16, Sch. 16

F674 Word in s. 267(4) substituted (1.10.2015) by The Insolvency Act 1986 (Amendment) Order 2015 (S.I. 2015/922), arts. 1, 2 (with art. 3)

Modifications etc. (not altering text)

C943 S. 267 applied with modifications by S.I. 1986/1999, art. 3, Sch. 1 Pt. II

S. 267 extended (1.4.1992) by S.I. 1992/613, reg. 49(1)

S. 267: power to modify conferred (6.3.1992) by Local Government Finance Act 1992 (c. 14), s. 14(3), Sch. 4 para. 9(1) (with s. 118(1)(2)(4))

C944 S. 267 modified by S.I. 1989/1058, reg. 18(1)

C945 S. 267 modified by S.I. 1989/438, reg. 43(1)

C946 S. 267 power to amend conferred by Local Government Finance Act 1988 (c. 41, SIF 81:1), s. 22, Sch. 4 para. 9(1)

C947 S. 267 modified (6.4.2010) by The Community Infrastructure Levy Regulations 2010 (S.I. 2010/948), reg. 105(1)

C948 S. 267 applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 8(3)(9), Sch. 4 Pt. II para. 6(b) (as amended) (8.12.2017) by The Insolvency (Miscellaneous Amendments) Regulations 2017 (S.I. 2017/1119), reg. 1(1), Sch. 2 para. 5)

268 Definition of “inability to pay”, etc.; the statutory demand. E+W

(1) For the purposes of section 267(2)(c), the debtor appears to be unable to pay a debt if, but only if, the debt is payable immediately and either—

(a) the petitioning creditor to whom the debt is owed has served on the debtor a demand (known as “the statutory demand”) in the prescribed form requiring him to pay the debt or to secure or compound for it to the satisfaction of the creditor, at least 3 weeks have elapsed since the demand was served and the demand has been neither complied with nor set aside in accordance with the rules, or

(b) execution or other process issued in respect of the debt on a judgment or order of any court in favour of the petitioning creditor, or one or more of the petitioning creditors to whom the debt is owed, has been returned unsatisfied in whole or in part.

(2) For the purposes of section 267(2)(c) the debtor appears to have no reasonable prospect of being able to pay a debt if, but only if, the debt is not immediately payable and—

(a) the petitioning creditor to whom it is owed has served on the debtor a demand (also known as “the statutory demand”) in the prescribed form requiring him to establish to the satisfaction of the creditor that there is a reasonable prospect that the debtor will be able to pay the debt when it falls due,

(b) at least 3 weeks have elapsed since the demand was served, and

(c) the demand has been neither complied with nor set aside in accordance with the rules.

Modifications etc. (not altering text)

C949 S. 268 applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 8(3)(9), Sch. 4 Pt. II para. 7(b)

C950 S. 268 excluded in part (24.3.2022 to be regarded as having come into force on 10.11.2021) by Commercial Rent (Coronavirus) Act 2022 (c. 12), s. 31(4), Sch. 3 para. 2 (with s. 30)

269 Creditor with security. E+W

(1) A debt which is the debt, or one of the debts, in respect of which a creditor’s petition is presented need not be unsecured if either—

(a) the petition contains a statement by the person having the right to enforce the security that he is willing, in the event of a bankruptcy order being made, to give up his security for the benefit of all the bankrupt’s creditors, or

(b) the petition is expressed not to be made in respect of the secured part of the debt and contains a statement by that person of the estimated value at the date of the petition of the security for the secured part of the debt.

(2) In a case falling within subsection (1)(b) the secured and unsecured parts of the debt are to be treated for the purposes of sections 267 to 270 as separate debts.

Modifications etc. (not altering text)

C951 S. 269 applied with modifications by S.I. 1986/1999, art. 3, Sch. 1 Pt. II

270 Expedited petition. E+W

In the case of a creditor’s petition presented wholly or partly in respect of a debt which is the subject of a statutory demand under section 268, the petition may be presented before the end of the 3-week period there mentioned if there is a serious possibility that the debtor’s property or the value of any of his property will be significantly diminished during that period and the petition contains a statement to that effect.

271 Proceedings on creditor’s petition. E+W

(1) The court shall not make a bankruptcy order on a creditor’s petition unless it is satisfied that the debt, or one of the debts, in respect of which the petition was presented is either—

(a) a debt which, having been payable at the date of the petition or having since become payable, has been neither paid nor secured or compounded for, or

(b) a debt which the debtor has no reasonable prospect of being able to pay when it falls due.

(2) In a case in which the petition contains such a statement as is required by section 270, the court shall not make a bankruptcy order until at least 3 weeks have elapsed since the service of any statutory demand under section 268.

(3) The court may dismiss the petition if it is satisfied that the debtor is able to pay all his debts or is satisfied—

(a) that the debtor has made an offer to secure or compound for a debt in respect of which the petition is presented,

(b) that the acceptance of that offer would have required the dismissal of the petition, and

(c) that the offer has been unreasonably refused;

and, in determining for the purposes of this subsection whether the debtor is able to pay all his debts, the court shall take into account his contingent and prospective liabilities.

(4) In determining for the purposes of this section what constitutes a reasonable prospect that a debtor will be able to pay a debt when it falls due, it is to be assumed that the prospect given by the facts and other matters known to the creditor at the time he entered into the transaction resulting in the debt was a reasonable prospect.

(5) Nothing in sections 267 to 271 prejudices the power of the court, in accordance with the rules, to authorise a creditor’s petition to be amended by the omission of any creditor or debt and to be proceeded with as if things done for the purposes of those sections had been done only by or in relation to the remaining creditors or debts.

Modifications etc. (not altering text)

C952 S. 271 applied (with modifications) (1.12.1994) by S.I. 1994/2421, arts. 8(3)(9), 10(1)(a), Sch. 4 Pt. II para. 9, Sch. 6 para. 3 (as amended (8.12.2017) by The Insolvency (Miscellaneous Amendments) Regulations 2017 (S.I. 2017/1119), reg. 1(1), Sch. 2 para. 3)

C953 S. 271 applied with modifications by S.I. 1986/1999, art. 3, Sch. 1 Pt. II (as amended (8.12.2017) by The Insolvency (Miscellaneous Amendments) Regulations 2017 (S.I. 2017/1119), reg. 1(1), Sch. 3 para. 1(2)(3)(d))

F675 ... E+W

Textual Amendments

F675 Ss. 272-274A and crossheading repealed (6.4.2016) by Enterprise and Regulatory Reform Act 2013 (c. 24), s. 103(3), Sch. 19 para. 9(1); S.I. 2016/191, art. 2 (with arts. 3, 4)

F675 272 Grounds of debtor’s petition. E+W

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

F675 273 Appointment of insolvency practitioner by the court. E+W

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

F675 274 Action on report of insolvency practitioner. E+W

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

F675 274A Debtor who meets conditions for a debt relief order E+W

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

275 Summary administration. E+W

F676 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F676 S. 275 repealed (1.4.2004) by 2002 c. 40, ss. 269, 278, 279, Sch. 23 para. 2, Sch. 26 (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))

Other cases for special consideration E+W

276 Default in connection with voluntary arrangement. E+W

(1) The court shall not make a bankruptcy order on a petition under section 264(1)(c) (supervisor of, or person bound by, voluntary arrangement proposed and approved) unless it is satisfied—

(a) that the debtor has failed to comply with his obligations under the voluntary arrangement, or

(b) that information which was false or misleading in any material particular or which contained material omissions—

(i) was contained in any statement of affairs or other document supplied by the debtor under Part VIII to any person, or

(ii) was otherwise made available by the debtor to his creditors [F677 in connection with a creditors' decision procedure instigated] under that Part, or

(c) that the debtor has failed to do all such things as may for the purposes of the voluntary arrangement have been reasonably required of him by the supervisor of the arrangement.

(2) Where a bankruptcy order is made on a petition under section 264(1)(c), any expenses properly incurred as expenses of the administration of the voluntary arrangement in question shall be a first charge on the bankrupt’s estate.

Textual Amendments

F677 Words in s. 276(1)(b)(ii) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 73; S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

Modifications etc. (not altering text)

C954 S.276(2) applied with modifications by S.I. 1986/1999, art. 3, Sch. 1 Pt. II

[F678 277 Petition based on criminal bankruptcy order. E+W

(1) Subject to section 266(3), the court shall make a bankruptcy order on a petition under section 264(1)(d) on production of a copy of the criminal bankruptcy order on which the petition is based.

This does not apply if it appears to the court that the criminal bankruptcy order has been rescinded on appeal.

(2) Subject to the provisions of this Part, the fact that an appeal is pending against any conviction by virtue of which a criminal bankruptcy order was made does not affect any proceedings on a petition under section 264(1)(d) based on that order.

(3) For the purposes of this section, an appeal against a conviction is pending—

(a) in any case, until the expiration of the period of 28 days beginning with the date of conviction;

(b) if notice of appeal to the Court of Appeal is given during that period and during that period the appellant notifies the official receiver of it, until the determination of the appeal and thereafter for so long as an appeal to the [F679 Supreme Court] is pending within the meaning of [F680 subsection (4).

(4) For the purposes of subsection (3)(b) an appeal to the Supreme Court shall be treated as pending until any application for leave to appeal is disposed of and, if leave to appeal is granted, until the appeal is disposed of; and for the purposes of this subsection an application for leave to appeal shall be treated as disposed of at the expiration of the time within which it may be made, if it is not made within that time.]]

Textual Amendments

F678 S. 277 repealed (prosp.) by Criminal Justice Act 1988 (c. 33, SIF 39:1), ss. 123, 170, 171, Sch. 8 para. 16, Sch. 16

F679 Words in s. 277(3)(b) substituted (1.10.2009) by Constitutional Reform Act 2005 (c. 4), ss. 40(4), 148, Sch. 9 para. 44(a); S.I. 2009/1604, art. 2(d)

F680 S. 277(4) and words substituted (1.10.2009) for words in s. 277(3)(b) by Constitutional Reform Act 2005 (c. 4), ss. 40(4), 148, Sch. 9 para. 44(b); S.I. 2009/1604, art. 2(d)

Modifications etc. (not altering text)

C955 S. 277 applied (with modifications) by S.I. 1986/1999, art. 3, Sch. 1 Pt. II

[F681 Chapter IA E+W Commencement and duration of bankruptcy]

Textual Amendments

F681 Pt. 9 Ch. 1A heading substituted for s. 278 cross-heading (6.4.2016) by Enterprise and Regulatory Reform Act 2013 (c. 24), s. 103(3), Sch. 19 para. 10; S.I. 2016/191, art. 2 (with art. 3)

278 Commencement and continuance. E+W

The bankruptcy of an individual against whom a bankruptcy order has been made—

(a) commences with the day on which the order is made, and

(b) continues until the individual is discharged under F682 ... this Chapter.

Textual Amendments

F682 Words in s. 278(b) omitted (6.4.2016) by virtue of Enterprise and Regulatory Reform Act 2013 (c. 24), s. 103(3), Sch. 19 para. 11; S.I. 2016/191, art. 2 (with art. 3)

Modifications etc. (not altering text)

C956 S. 278 applied with modifications by S.I. 1986/1999, art. 3, Sch. 1 Pt. II

S. 278 applied (7.2.1994) by 1993 c. 48, s. 144(4)(a)(ii) (with s. 6(8)); S.I. 1994/86, art. 2

[F683 279 Duration E+W

(1) A bankrupt is discharged from bankruptcy at the end of the period of one year beginning with the date on which the bankruptcy commences.

F684 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) On the application of the official receiver or the trustee of a bankrupt’s estate, the court may order that the period specified in subsection (1) shall cease to run until—

(a) the end of a specified period, or

(b) the fulfilment of a specified condition.

(4) The court may make an order under subsection (3) only if satisfied that the bankrupt has failed or is failing to comply with an obligation under this Part.

(5) In subsection (3)(b) “condition” includes a condition requiring that the court be satisfied of something.

(6) In the case of an individual who is [F685 made] bankrupt on a petition under section 264(1)(d)—

(a) subsections (1) to (5) shall not apply, and

(b) the bankrupt is discharged from bankruptcy by an order of the court under section 280.

(7) This section is without prejudice to any power of the court to annul a bankruptcy order.]

Textual Amendments

F683 S. 279 substituted (1.4.2004) by 2002 c. 40, ss. 256, 279 (with s. 249(6), Sch. 19); S.I. 2003/2093, art. 2(2), Sch. 2 (subject to arts. 3-8 (as amended by S.I. 2003/2332, art. 2))

F684 S. 279(2) omitted (1.10.2013) by virtue of Enterprise and Regulatory Reform Act 2013 (c. 24), s. 103(3), Sch. 21 para. 5; S.I. 2013/2227, art. 2(n) (with art. 6)

F685 Word in 279(6) substituted (6.4.2016) by Enterprise and Regulatory Reform Act 2013 (c. 24), s. 103(3), Sch. 19 para. 12; S.I. 2016/191, art. 2 (with art. 3)

Modifications etc. (not altering text)

C957 S. 279 excluded (1.4.2004) by 2002 c. 40, ss. 256(2), 279, Sch. 19 para. 3 (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))

C958 S. 279(3)-(5) applied (1.4.2004) by 2002 c. 40, ss. 256(2), 279, Sch. 19 paras. 4(3), 5(5) (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))

280 Discharge by order of the court. E+W

(1) An application for an order of the court discharging an individual from bankruptcy in a case falling within [F686 section 279(6)] may be made by the bankrupt at any time after the end of the period of 5 years beginning with the [F687 date on which the bankruptcy commences].

(2) On an application under this section the court may—

(a) refuse to discharge the bankrupt from bankruptcy,

(b) make an order discharging him absolutely, or

(c) make an order discharging him subject to such conditions with respect to any income which may subsequently become due to him, or with respect to property devolving upon him, or acquired by him, after his discharge, as may be specified in the order.

(3) The court may provide for an order falling within subsection (2)(b) or (c) to have immediate effect or to have its effect suspended for such period, or until the fulfilment of such conditions (including a condition requiring the court to be satisfied as to any matter), as may be specified in the order.

Textual Amendments

F686 Words in s. 280(1) substituted (1.4.2004) by 2002 c. 40, ss. 269, 279, Sch. 23 para. 3(a) (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))

F687 Words in s. 280(1) substituted (1.4.2004) by 2002 c. 40, ss. 269, 279, Sch. 23 para. 3(b) (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))

Modifications etc. (not altering text)

C959 S. 280 applied (1.4.2004) by 2002 c. 40, ss. 256(2), 279, Sch. 19 para. 6 (with s. 249(6), Sch. 19 para. 8); S.I. 2003/2093, art. 2(2), Sch. 2 (subject to arts. 3-8 (as amended by S.I. 2003/2332, art. 2))

281 Effect of discharge. E+W

(1) Subject as follows, where a bankrupt is discharged, the discharge releases him from all the bankruptcy debts, but has no effect—

(a) on the functions (so far as they remain to be carried out) of the trustee of his estate, or

(b) on the operation, for the purposes of the carrying out of those functions, of the provisions of this Part;

and, in particular, discharge does not affect the right of any creditor of the bankrupt to prove in the bankruptcy for any debt from which the bankrupt is released.

(2) Discharge does not affect the right of any secured creditor of the bankrupt to enforce his security for the payment of a debt from which the bankrupt is released.

(3) Discharge does not release the bankrupt from any bankruptcy debt which he incurred in respect of, or forbearance in respect of which was secured by means of, any fraud or fraudulent breach of trust to which he was a party.

(4) Discharge does not release the bankrupt from any liability in respect of a fine imposed for an offence or from any liability under a recognisance except, in the case of a penalty imposed for an offence under an enactment relating to the public revenue or of a recognisance, with the consent of the Treasury.

[F688 (4A) In subsection (4) the reference to a fine [F689 imposed for an offence] includes a reference to [F690 —

(a) a charge ordered to be paid under [F691 section 46 of the Sentencing Code] (criminal courts charge), whether on conviction or otherwise;

(b)] a confiscation order under Part 2, 3 or 4 of the Proceeds of Crime Act 2002.]

(5) Discharge does not, except to such extent and on such conditions as the court may direct, release the bankrupt from any bankruptcy debt which—

(a) consists in a liability to pay damages for negligence, nuisance or breach of a statutory, contractual or other duty, [F692 or to pay damages by virtue of Part I of the Consumer Protection Act 1987, being in either case] damages in respect of personal injuries to any person, or

(b) arises under any order made in family proceedings [F693 or under a [F694 maintenance calculation] made under the Child Support Act 1991]. . ..

(6) Discharge does not release the bankrupt from such other bankruptcy debts, not being debts provable in his bankruptcy, as are prescribed.

(7) Discharge does not release any person other than the bankrupt from any liability (whether as partner or co-trustee of the bankrupt or otherwise) from which the bankrupt is released by the discharge, or from any liability as surety for the bankrupt or as a person in the nature of such a surety.

(8) In this section—

• [F695 “family proceedings” means—

(a) [F696 proceedings in the family court;] and

(b) family proceedings within the meaning of Part V of the M18 Matrimonial and Family Proceedings Act 1984.]

• “fine” means the same as in the Magistrates’ Courts Act 1980; and

• “personal injuries” includes death and any disease or other impairment of a person’s physical or mental condition.

Textual Amendments

F688 S. 281(4A) inserted (24.3.2003) by 2002 c. 29, ss. 456, 458(1)(3), Sch. 11 para. 16(2); S.I. 2003/333, art. 2, Sch. (subject to arts. 3-13 (as amended by S.I. 2003/531, arts. 3, 4)); S.S.I. 2003/210, art. 2, Sch. (subject to arts. 3-7)

F689 Words in s. 281(4A) inserted (13.4.2015) by Criminal Justice and Courts Act 2015 (c. 2), s. 95(1), Sch. 12 para. 6(a); S.I. 2015/778, art. 3, Sch. 1 para. 78

F690 Words in s. 281(4A) inserted (13.4.2015) by Criminal Justice and Courts Act 2015 (c. 2), s. 95(1), Sch. 12 para. 6(b); S.I. 2015/778, art. 3, Sch. 1 para. 78

F691 Words in s. 281(4A) substituted (1.12.2020) by Sentencing Act 2020 (c. 17), s. 416(1), Sch. 24 para. 88 (with Sch. 27); S.I. 2020/1236, reg. 2

F692 Words substituted by Consumer Protection Act 1987 (c. 43, SIF 109:1), ss. 41(2), 47(1)(2), 48, Sch. 4 para. 12

F693 Words in s. 281(5)(b) inserted (5.4.1993) by Child Support Act 1991 (c. 48), s. 58(13), Sch. 5 para. 7; S.I. 1992/2644, art. 2

F694 Words in s. 281(5)(b) substituted (3.3.2003 for specified purposes, otherwise prosp.) by 2000 c. 19, ss. 26, 86(1)(2), Sch. 3 para. 6 (with s. 83(6)); S.I. 2003/192, art. 3, Sch.

F695 Definition of "family proceedings" substituted (14.10.1991) for the definitions of "domestic proceedings" and "family proceedings" by Children Act 1989 (c. 41, SIF 20), ss. 92, 108(6), Sch. 11 Pt. II para. 11(2), Sch. 14 para. 1(1); S.I. 1991/828, art. 3(2)

F696 Words in s. 281(8) substituted (22.4.2014) by Crime and Courts Act 2013 (c. 22), s. 61(3), Sch. 10 para. 74; S.I. 2014/954, art. 2(d) (with art. 3) (with transitional provisions and savings in S.I. 2014/956, arts. 3-11)

Modifications etc. (not altering text)

C960 S. 281(4) extended by Drug Trafficking Offences Act 1986 (c. 32, SIF 39:1), s. 39(5)

S. 281(4) extended (3.2.1995) by 1994 c. 37, ss. 65(3), 69(2) (with s. 66(2))

S. 281(4) extended (31.3.1996) by 1995 c. 20, s. 113(6); S.I. 1996/517, art. 3(2) (subject to transitional provisions and savings in arts. 4-6, Sch. 2)

S. 281(4) extended (S.) (1.4.1996) by 1995 c. 43, ss. 47(4), 50(2)

C961 S. 281(4) amended by Criminal Justice (Scotland) Act 1987 (c. 41, SIF 39:1), SS. 123, 170, Sch. 8 para. 6, Sch. 15 para. 110

C962 S. 281(4) amended by Criminal Justice (Scotland) Act 1987 (c. 41, SIF 39:1), SS. 45(4), 47(4)(a).

Marginal Citations

M18 1984 c.42(49:3).

[F697 281A Post-discharge restrictions E+W

Schedule 4A to this Act (bankruptcy restrictions order and bankruptcy restrictions undertaking) shall have effect.]

Textual Amendments

F697 S. 281A inserted (1.4.2004) by 2002 c. 40, ss. 257(1), 279 (with s. 249(6)); S.I. 2003/2093, art. 2(2), Sch. 2 (with arts. 3-8 (as amended by S.I. 2003/2332, art. 2))

282 Court’s power to annul bankruptcy order. E+W

(1) The court may annul a bankruptcy order if it at any time appears to the court—

(a) that, on any grounds existing at the time the order was made, the order ought not to have been made, or

(b) that, to the extent required by the rules, the bankruptcy debts and the expenses of the bankruptcy have all, since the making of the order, been either paid or secured for to the satisfaction of the court.

(2) The court may annul a bankruptcy order made against an individual on a petition under paragraph (a)F698 ... or (c) of section 264(1) [F699 or on a bankruptcy application] if it at any time appears to the court, on an application by the Official Petitioner—

(a) that the petition was pending [F700 or the application was ongoing] at a time when a criminal bankruptcy order was made against the individual or was presented after such an order was so made, and

(b) no appeal is pending (within the meaning of section 277) against the individual’s conviction of any offence by virtue of which the criminal bankruptcy order was made;

and the court shall annul a bankruptcy order made on a petition under section 264(1)(d) if it at any time appears to the court that the criminal bankruptcy order on which the petition was based has been rescinded in consequence of an appeal.

(3) The court may annul a bankruptcy order whether or not the bankrupt has been discharged from the bankruptcy.

(4) Where the court annuls a bankruptcy order (whether under this section or under section 261 F701 ... in Part VIII)—

(a) any sale or other disposition of property, payment made or other thing duly done, under any provision in this Group of Parts, by or under the authority of the official receiver or a trustee of the bankrupt’s estate or by the court is valid, but

(b) if any of the bankrupt’s estate is then vested, under any such provision, in such a trustee, it shall vest in such person as the court may appoint or, in default of any such appointment, revert to the bankrupt on such terms (if any) as the court may direct;

and the court may include in its order such supplemental provisions as may be authorised by the rules.

(5) F702 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F698 Word in s. 282(2) omitted (6.4.2016) by virtue of Enterprise and Regulatory Reform Act 2013 (c. 24), s. 103(3), Sch. 19 para. 13(a); S.I. 2016/191, art. 2 (with art. 3)

F699 Words in s. 282(2) inserted (6.4.2016) by Enterprise and Regulatory Reform Act 2013 (c. 24), s. 103(3), Sch. 19 para. 13(b); S.I. 2016/191, art. 2 (with art. 3)

F700 Words in s. 282(2)(a) inserted (6.4.2016) by Enterprise and Regulatory Reform Act 2013 (c. 24), s. 103(3), Sch. 19 para. 13(c); S.I. 2016/191, art. 2 (with art. 3)

F701 Words in s. 282(4) omitted (26.5.2015) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), ss. 135(2)(a), 164(3)(i)(iv) (with s. 135(4))

F702 S. 282(5) repealed (1.4.2004) by 2002 c. 40, ss. 269, 278, 279, Sch. 23 para. 4(b), Sch. 26 (with s. 249(6)); S.I. 2003/2093, art. 2(2), Sch. 2 (with arts. 3-8 (as amended by S.I. 2003/2332, art. 2))

Modifications etc. (not altering text)

C963 S. 282(1) applied with modifications by S.I. 1986/1999, art. 3, Sch. 1 Pt. II

C964 S. 282(4) applied with modifications by S.I. 1986/1999, art. 3, Sch. 1 Pt. II

Chapter II E+W Protection of Bankrupt’s Estate and Investigation of His Affairs

283 Definition of bankrupt’s estate. E+W

(1) Subject as follows, a bankrupt’s estate for the purposes of any of this Group of Parts comprises—

(a) all property belonging to or vested in the bankrupt at the commencement of the bankruptcy, and

(b) any property which by virtue of any of the following provisions of this Part is comprised in that estate or is treated as falling with the preceding paragraph.

(2) Subsection (1) does not apply to—

(a) such tools, books, vehicles and other items of equipment as are necessary to the bankrupt for use personally by him in his employment, business or vocation;

(b) such clothing, bedding, furniture, household equipment and provisions as are necessary for satisfying the basic domestic needs of the bankrupt and his family.

This subsection is subject to section 308 in Chapter IV (certain excluded property reclaimable by trustee).

(3) Subsection (1) does not apply to—

(a) property held by the bankrupt on trust for any other person, or

(b) the right of nomination to a vacant ecclesiastical benefice.

[F703 (3A) Subject to section 308A in Chapter IV, subsection (1) does not apply to—

(a) a tenancy which is an assured tenancy or an assured agricultural occupancy, within the meaning of Part I of the Housing Act 1988, and the terms of which inhibit an assignment as mentioned in section 127(5) of the M19 Rent Act 1977, or

[F704 (aa) a standard contract within the meaning of section 8 of the Renting Homes (Wales) Act 2016 (anaw 1) and the terms of which inhibit an assignment as mentioned in section 127(5) of the Rent Act 1977 (c. 42), or]

(b) a protected tenancy, within the meaning of the Rent Act 1977, in respect of which, by virtue of any provision of Part IX of that Act, no premium can lawfully be required as a condition of assignment, or

(c) a tenancy of a dwelling-house by virtue of which the bankrupt is, within the meaning of the M20 Rent (Agriculture) Act 1976, a protected occupier of the dwelling-house, and the terms of which inhibit an assignment as mentioned in section 127(5) of the Rent Act 1977, or

(d) a secure tenancy, within the meaning of Part IV of the M21 Housing Act 1985, which is not capable of being assigned, except in the cases mentioned in section 91(3) of that Act [F705 , or]]

[F706 (e) a secure contract within the meaning of section 8 of the Renting Homes (Wales) Act 2016 (anaw 1) which is not capable of being assigned, except—

(i) in the cases mentioned in section 251 (family property order) of that Act,

(ii) in accordance with section 92 (assignment by way of exchange) of the Housing Act 1985 (c. 68), or

(iii) to a person who would be qualified to succeed the contract-holder if the contract-holder died immediately before the assignment.]

(4) References in any of this Group of Parts to property, in relation to a bankrupt, include references to any power exercisable by him over or in respect of property except in so far as the power is exercisable over or in respect of property not for the time being comprised in the bankrupt’s estate and—

(a) is so exercisable at a time after either the official receiver has had his release in respect of that estate under section 299(2) in chapter III or [F707 the trustee of that estate has vacated office under section 298(8)], or

(b) cannot be so exercised for the benefit of the bankrupt;

and a power exercisable over or in respect of property is deemed for the purposes of any of this Group of Parts to vest in the person entitled to exercise it at the time of the transaction or event by virtue of which it is exercisable by that person (whether or not it becomes so exercisable at that time).

(5) For the purposes of any such provision in this Group of Parts, property comprised in a bankrupt’s estate is so comprised subject to the rights of any person other than the bankrupt (whether as a secured creditor of the bankrupt or otherwise) in relation thereto, but disregarding—

(a) any rights in relation to which a statement such as is required by section 269(1)(a) was made in the petition on which the bankrupt was [F708 made] bankrupt, and

(b) any rights which have been otherwise given up in accordance with the rules.

(6) This section has effect subject to the provisions of any enactment not contained in this Act under which any property is to be excluded from a bankrupt’s estate.

Textual Amendments

F703 S. 283(3A) inserted (E.W.) by Housing Act 1988 (c. 50, SIF 75:1), s. 117(1)

F704 S. 283(3A)(aa) inserted (1.12.2022) by The Renting Homes (Wales) Act 2016 (Consequential Amendments) Regulations 2022 (S.I. 2022/1166), regs. 1(1), 14(2)(a) (with savings and transitional provisions in S.I. 2022/1172, regs. 15, 19)

F705 Word in s. 283(3A)(d) substituted for full stop (1.12.2022) by The Renting Homes (Wales) Act 2016 (Consequential Amendments) Regulations 2022 (S.I. 2022/1166), regs. 1(1), 14(2)(b) (with savings and transitional provisions in S.I. 2022/1172, regs. 15, 19)

F706 S. 283(3A)(e) inserted (1.12.2022) by The Renting Homes (Wales) Act 2016 (Consequential Amendments) Regulations 2022 (S.I. 2022/1166), regs. 1(1), 14(2)(c) (with savings and transitional provisions in S.I. 2022/1172, regs. 15, 19)

F707 Words in s. 283(4)(a) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 74; S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

F708 Word in s. 283(5)(a) substituted (6.4.2016) by Enterprise and Regulatory Reform Act 2013 (c. 24), s. 103(3), Sch. 19 para. 14; S.I. 2016/191, art. 2 (with art. 3)

Modifications etc. (not altering text)

C965 S. 283 applied with modifications by S.I. 1986/1999, art. 3, Sch. 1 Pt. II

C966 S. 283 applied (with modifications) (1.12.1994) by S.I. 1994/2421, arts. 8(3)(9), 10(6), Sch. 4 Pt. II para. 28

C967 S. 283 modified (1.12.1994) by S.I. 1994/2421, art. 11(2)(3), Sch. 7 para. 7

Marginal Citations

M19 1977 c.42(75:3).

M20 1976 c.80(75:3)

M21 1985 c.68(61).

[F709 283A Bankrupt’s home ceasing to form part of estate E+W

(1) This section applies where property comprised in the bankrupt’s estate consists of an interest in a dwelling-house which at the date of the bankruptcy was the sole or principal residence of—

(a) the bankrupt,

(b) the bankrupt’s spouse [F710 or civil partner], or

(c) a former spouse [F711 or former civil partner] of the bankrupt.

(2) At the end of the period of three years beginning with the date of the bankruptcy the interest mentioned in subsection (1) shall—

(a) cease to be comprised in the bankrupt’s estate, and

(b) vest in the bankrupt (without conveyance, assignment or transfer).

(3) Subsection (2) shall not apply if during the period mentioned in that subsection—

(a) the trustee realises the interest mentioned in subsection (1),

(b) the trustee applies for an order for sale in respect of the dwelling-house,

(c) the trustee applies for an order for possession of the dwelling-house,

(d) the trustee applies for an order under section 313 in Chapter IV in respect of that interest, or

(e) the trustee and the bankrupt agree that the bankrupt shall incur a specified liability to his estate (with or without the addition of interest from the date of the agreement) in consideration of which the interest mentioned in subsection (1) shall cease to form part of the estate.

(4) Where an application of a kind described in subsection (3)(b) to (d) is made during the period mentioned in subsection (2) and is dismissed, unless the court orders otherwise the interest to which the application relates shall on the dismissal of the application—

(a) cease to be comprised in the bankrupt’s estate, and

(b) vest in the bankrupt (without conveyance, assignment or transfer).

(5) If the bankrupt does not inform the trustee or the official receiver of his interest in a property before the end of the period of three months beginning with the date of the bankruptcy, the period of three years mentioned in subsection (2)—

(a) shall not begin with the date of the bankruptcy, but

(b) shall begin with the date on which the trustee or official receiver becomes aware of the bankrupt’s interest.

(6) The court may substitute for the period of three years mentioned in subsection (2) a longer period—

(a) in prescribed circumstances, and

(b) in such other circumstances as the court thinks appropriate.

(7) The rules may make provision for this section to have effect with the substitution of a shorter period for the period of three years mentioned in subsection (2) in specified circumstances (which may be described by reference to action to be taken by a trustee in bankruptcy).

(8) The rules may also, in particular, make provision—

(a) requiring or enabling the trustee of a bankrupt’s estate to give notice that this section applies or does not apply;

(b) about the effect of a notice under paragraph (a);

(c) requiring the trustee of a bankrupt’s estate to make an application to the Chief Land Registrar.

(9) Rules under subsection (8)(b) may, in particular—

(a) disapply this section;

(b) enable a court to disapply this section;

(c) make provision in consequence of a disapplication of this section;

(d) enable a court to make provision in consequence of a disapplication of this section;

(e) make provision (which may include provision conferring jurisdiction on a court or tribunal) about compensation.]

Textual Amendments

F709 S. 283A inserted (1.4.2004) by 2002 c. 40, ss. 261(1), 279 (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))

F710 Words in s. 283A(1)(b) inserted (5.12.2005) by Civil Partnership Act 2004 (c. 33), ss. 261(1), 263, Sch. 27 para. 113(a); S.I. 2005/3175, art. 2(2) (subject to art. 2(3)-(5))

F711 Words in s. 283A(1)(c) inserted (5.12.2005) by Civil Partnership Act 2004 (c. 33), ss. 261(1), 263, Sch. 27 para. 113(b); S.I. 2005/3175, art. 2(2) (subject to art. 2(3)-(5))

Modifications etc. (not altering text)

C968 S. 283A modified (1.7.2005) by S.I. 1994/2421, Sch. 4 Pt. II para. 28A (as inserted (1.7.2005) by S.I. 2005/1516, art. 9(4))

S. 283A modified (1.7.2005) by S.I. 1994/2421, Sch. 7 para. 7A (as inserted (1.7.2005) by S.I. 2005/1516, art. 10(4))

C969 S. 283A(4)-(9) applied (with modifications) by 2002 c. 40, ss. 261(10), 279 (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))

284 Restrictions on dispositions of property. E+W

(1) Where a person is [F712 made] bankrupt, any disposition of property made by that person in the period to which this section applies is void except to the extent that it is or was made with the consent of the court, or is or was subsequently ratified by the court.

(2) Subsection (1) applies to a payment (whether in cash or otherwise) as it applies to a disposition of property and, accordingly, where any payment is void by virtue of that subsection, the person paid shall hold the sum paid for the bankrupt as part of his estate.

(3) This section applies to the period beginning with the day of the [F713 making of the bankruptcy application or (as the case may be) the presentation of the bankruptcy petition] and ending with the vesting, under Chapter IV of this Part, of the bankrupt’s estate in a trustee.

(4) The preceding provisions of this section do not give a remedy against any person—

(a) in respect of any property or payment which he received before the commencement of the bankruptcy in good faith, for value and without notice that the [F714 bankruptcy application had been made or (as the case may be) that the bankruptcy] petition had been presented, or

(b) in respect of any interest in property which derives from an interest in respect of which there is, by virtue of this subsection, no remedy.

(5) Where after the commencement of his bankruptcy the bankrupt has incurred a debt to a banker or other person by reason of the making of a payment which is void under this section, that debt is deemed for the purposes of any of this Group of Parts to have been incurred before the commencement of the bankruptcy unless—

(a) that banker or person had notice of the bankruptcy before the debt was incurred, or

(b) it is not reasonably practicable for the amount of the payment to be recovered from the person to whom it was made.

(6) A disposition of property is void under this section notwithstanding that the property is not or, as the case may be, would not be comprised in the bankrupt’s estate; but nothing in this section affects any disposition made by a person of property held by him on trust for any other person.

Textual Amendments

F712 Word in s. 284(1) substituted (6.4.2016) by Enterprise and Regulatory Reform Act 2013 (c. 24), s. 103(3), Sch. 19 para. 15(2); S.I. 2016/191, art. 2 (with art. 3)

F713 Words in s. 284(3) substituted (6.4.2016) by Enterprise and Regulatory Reform Act 2013 (c. 24), s. 103(3), Sch. 19 para. 15(3); S.I. 2016/191, art. 2 (with art. 3)

F714 Words in s. 284(4)(a) inserted (6.4.2016) by Enterprise and Regulatory Reform Act 2013 (c. 24), s. 103(3), Sch. 19 para. 15(4); S.I. 2016/191, art. 2 (with art. 3)

Modifications etc. (not altering text)

C970 S. 284 applied with modifications by S.I. 1986/1999, art. 3, Sch. 1 Pt. II

C971 S. 284 excluded (25.4.1991) by Companies Act 1989 (c. 40), ss. 154, 155, 164(3), 175(4), 182(4), Sch. 22 para. 11(4); S.I. 1991/878, art. 2, Sch. ( with art. 3(4)).

S. 284 excluded (15.8.1995) by S.I. 1995/2049, reg. 21(5)-(8)

C972 S. 284 restricted (25.4.1991) by Companies Act 1989 (c. 40), s. 182(4), Sch. 22 para. 7(2); S.I. 1991/878, art. 2, Sch. .

C973 S. 284 applied (with modifications) (1.12.1994) by S.I. 1994/2421, arts. 8(3)(9), 10(6), Sch. 4 Pt. II para. 29

C974 S. 284 modified (1.12.1994) by S.I. 1994/2421, art. 11(2)(3), Sch. 7 para. 8

C975 S. 284 excluded (11.12.1999) by S.I. 1999/2979, regs. 16(3), 19(3) (as amended (2.2.2006) by The Financial Markets and Insolvency (Settlement Finality) (Amendment) Regulations 2006 (S.I. 2006/50), reg. 2(8)(10) and as amended (1.10.2009) by The Financial Markets and Insolvency (Settlement Finality) (Amendment) Regulations 2009 (S.I. 2009/1972), reg. 6(a))

285 Restriction on proceedings and remedies. E+W

(1) At any time when [F715 proceedings on a bankruptcy application are ongoing or] proceedings on a bankruptcy petition are pending or an individual has been [F716 made] bankrupt the court may stay any action, execution or other legal process against the property or person of the debtor or, as the case may be, of the bankrupt.

(2) Any court in which proceedings are pending against any individual may, on proof that [F717 a bankruptcy application has been made or] a bankruptcy petition has been presented in respect of that individual or that he is an undischarged bankrupt, either stay the proceedings or allow them to continue on such terms as it thinks fit.

(3) After the making of a bankruptcy order no person who is a creditor of the bankrupt in respect of a debt provable in the bankruptcy shall—

(a) have any remedy against the property or person of the bankrupt in respect of that debt, or

(b) before the discharge of the bankrupt, commence any action or other legal proceedings against the bankrupt except with the leave of the court and on such terms as the court may impose.

This is subject to sections 346 (enforcement procedures) and 347 (limited right to distress).

(4) Subject as follows, subsection (3) does not affect the right of a secured creditor of the bankrupt to enforce his security.

(5) Where any goods of an undischarged bankrupt are held by any person by way of pledge, pawn or other security, the official receiver may, after giving notice in writing of his intention to do so, inspect the goods.

Where such a notice has been given to any person, that person is not entitled, without leave of the court, to realise his security unless he has given the trustee of the bankrupt’s estate a reasonable opportunity of inspecting the goods and of exercising the bankrupt’s right of redemption.

(6) References in this section to the property or goods of the bankrupt are to any of his property or goods, whether or not comprised in his estate.

Textual Amendments

F715 Words in s. 285(1) inserted (6.4.2016) by Enterprise and Regulatory Reform Act 2013 (c. 24), s. 103(3), Sch. 19 para. 16(2)(a); S.I. 2016/191, art. 2 (with art. 3)

F716 Word in s. 285(1) substituted (6.4.2016) by Enterprise and Regulatory Reform Act 2013 (c. 24), s. 103(3), Sch. 19 para. 16(2)(b); S.I. 2016/191, art. 2 (with art. 3)

F717 Words in s. 285(2) inserted (6.4.2016) by Enterprise and Regulatory Reform Act 2013 (c. 24), s. 103(3), Sch. 19 para. 16(3); S.I. 2016/191, art. 2 (with art. 3)

Modifications etc. (not altering text)

C976 S. 285 applied with modifications by S.I. 1986/1999, art. 3, Sch. 1 Pt. II

C977 S. 285 excluded (25.4.1991) by Companies Act 1989 (c. 40), ss. 154, 155, 161(4), 182(4), Sch. 22 para. 5(2); S.I. 1991/878, art. 2, Sch. .

C978 S. 285(3) modified (25.4.1991) by Companies Act 1989 (c. 40), s. 182(4), Sch. 22 para. 12(4); S.I. 1991/878, art. 2, Sch. .

286 Power to appoint interim receiver. E+W

(1) The court may, if it is shown to be necessary for the protection of the debtor’s property, at any time after the presentation of a bankruptcy petition and before making a bankruptcy order, appoint the official receiver [F718 or an insolvency practitioner] to be interim receiver of the debtor’s property.

F719 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) The court may by an order appointing any person to be an interim receiver direct that his powers shall be limited or restricted in any respect; but, save as so directed, an interim receiver has, in relation to the debtor’s property, all the rights, powers, duties and immunities [F720 given by] the next section.

(4) An order of the court appointing any person to be an interim receiver shall require that person to take immediate possession of the debtor’s property or, as the case may be, the part of it to which his powers as interim receiver are limited.

(5) Where an interim receiver has been appointed, the debtor shall give him such inventory of his property and such other information, and shall attend on the interim receiver at such times, as the latter may for the purpose of carrying out his functions under this section reasonably require.

(6) Where an interim receiver is appointed, section 285(3) applies for the period between the appointment and the making of a bankruptcy order on the petition, or the dismissal of the petition, as if the appointment were the making of such an order.

(7) A person ceases to be interim receiver of a debtor’s property if the bankruptcy petition relating to the debtor is dismissed, if a bankruptcy order is made on the petition or if the court by order otherwise terminates the appointment.

(8) References in this section to the debtor’s property are to all his property, whether or not it would be comprised in his estate if he were [F721 made] bankrupt.

Textual Amendments

F718 Words in s. 286(1) inserted (6.4.2017) by Deregulation Act 2015 (c. 20), s. 115(7), Sch. 6 para. 13(1) (with Sch. 6 para. 13(2)); S.I. 2016/1016, art. 2(b)

F719 S. 286(2) omitted (6.4.2016) by virtue of Enterprise and Regulatory Reform Act 2013 (c. 24), s. 103(3), Sch. 19 para. 17(2); S.I. 2016/191, art. 2 (with art. 3)

F720 Words in s. 286(3) substituted (6.4.2017) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 10 para. 2; S.I. 2016/1020, reg. 4(f)

F721 Word in s. 286(8) substituted (6.4.2016) by Enterprise and Regulatory Reform Act 2013 (c. 24), s. 103(3), Sch. 19 para. 17(3); S.I. 2016/191, art. 2 (with art. 3)

Modifications etc. (not altering text)

C979 S. 286(1)(3)-(8) applied with modifications by S.I. 1986/1999, art. 3, Sch. 1 Pt. II

287 [F722 Powers of interim receiver]. E+W

(1) [F723 An interim receiver appointed under section 286] is the receiver and (subject to section 370 (special manager)) the manager of the [F724 debtor's property] and is under a duty to act as such.

(2) The function of [F725 an interim] receiver while acting as receiver or manager of the [F726 debtor's property] under this section is to protect [F727 the property]; and for this purpose—

(a) he has the same powers as if he were a receiver or manager appointed by the High Court, and

(b) he is entitled to sell or otherwise dispose of any perishable goods comprised in [F727 the property] and any other goods so comprised the value of which is likely to diminish if they are not disposed of.

(3) [F728 An interim] receiver while acting as receiver or manager [F729 of the debtor's property] under this section—

(a) shall take all such steps as he thinks fit for protecting [F730 the debtor's property,]

[F731 (b) is not required to do anything that involves his incurring expenditure, except in pursuance of directions given by—

(i) the Secretary of State, where the official receiver is the interim receiver, or

(ii) the court, in any other case,]

(c) may, if he thinks fit (and shall, if so directed by the court) at any time [F732 seek a decision on a matter from] the [F733 debtor's] creditors.

(4) Where—

[F734 (a) an interim receiver acting as receiver or manager of the debtor's property under this section seizes or disposes of any property which is not the debtor's property, and]

(b) at the time of the seizure or disposal the [F735 interim receiver] believes, and has reasonable grounds for believing, that he is entitled (whether in pursuance of an order of the court or otherwise) to seize or dispose of that property,

the [F736 interim receiver is] not to be liable to any person in respect of any loss or damage resulting from the seizure or disposal except in so far as that loss or damage is caused by his negligence; and he has a lien on the property, or the proceeds of its sale, for such of the expenses of the [F737 interim receivership] as were incurred in connection with the seizure or disposal.

F738 (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F722 S. 287 heading substituted (6.4.2017 for E.W.) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 10 para. 3(2); S.I. 2016/1020, reg. 4(f)

F723 Words in s. 287(1) substituted (6.4.2017 for E.W.) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 10 para. 3(3)(a); S.I. 2016/1020, reg. 4(f)

F724 Words in s. 287(1) substituted (6.4.2017 for E.W.) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 10 para. 3(3)(b); S.I. 2016/1020, reg. 4(f)

F725 Words in s. 287(2) substituted (6.4.2017 for E.W.) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 10 para. 3(4)(a); S.I. 2016/1020, reg. 4(f)

F726 Words in s. 287(2) substituted (6.4.2017 for E.W.) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 10 para. 3(4)(b); S.I. 2016/1020, reg. 4(f)

F727 Words in s. 287(2) substituted (6.4.2017 for E.W.) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 10 para. 3(4)(c); S.I. 2016/1020, reg. 4(f)

F728 Words in s. 287(3) substituted (6.4.2017 for E.W.) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 10 para. 3(5)(a); S.I. 2016/1020, reg. 4(f)

F729 Words in s. 287(3) substituted (6.4.2017 for E.W.) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 10 para. 3(5)(b); S.I. 2016/1020, reg. 4(f)

F730 Words in s. 287(3)(a) substituted (6.4.2017 for E.W.) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 10 para. 3(5)(c); S.I. 2016/1020, reg. 4(f)

F731 S. 287(3)(b) substituted (6.4.2017 for E.W.) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 10 para. 3(5)(d); S.I. 2016/1020, reg. 4(f)

F732 Words in s. 287(3)(c) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 75; S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

F733 Word in s. 287(3)(c) substituted (6.4.2017 for E.W.) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 10 para. 3(5)(e); S.I. 2016/1020, reg. 4(f)

F734 S. 287(4)(a) substituted (6.4.2017 for E.W.) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 10 para. 3(6)(a); S.I. 2016/1020, reg. 4(f)

F735 Words in s. 287(4)(b) substituted (6.4.2017 for E.W.) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 10 para. 3(6)(b); S.I. 2016/1020, reg. 4(f)

F736 Words in s. 287(4) substituted (6.4.2017 for E.W.) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 10 para. 3(6)(c); S.I. 2016/1020, reg. 4(f)

F737 Words in s. 287(4) substituted (6.4.2017 for E.W.) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 10 para. 3(6)(d); S.I. 2016/1020, reg. 4(f)

F738 S. 287(5) omitted (6.4.2017 for E.W.) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 10 para. 3(7); S.I. 2016/1020, reg. 4(f)

Modifications etc. (not altering text)

C980 S.287 applied with modifications by S.I. 1986/1999, art. 3, Sch. 1 Pt. II

288 Statement of affairs. E+W

(1) Where a bankruptcy order has been made otherwise than on a [F739 bankruptcy application], [F740 the official receiver may at any time before the discharge of the bankrupt require the bankrupt to submit to the official receiver a statement of affairs.]

(2) The statement of affairs shall contain—

(a) such particulars of the bankrupt’s creditors and of his debts and other liabilities and of his assets as may be prescribed, and

(b) such other information as may be prescribed.

[F741 (2A) Where a bankrupt is required under subsection (1) to submit a statement of affairs to the official receiver, the bankrupt shall do so (subject to subsection (3)) 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 the bankrupt by the official receiver.]

(3) The official receiver may, if he thinks fit—

(a) release [F742 a bankrupt from an obligation imposed on the bankrupt] under subsection (1), or

[F743 (b) either when giving the notice mentioned in subsection (2A) or subsequently, extend the period mentioned in that subsection,]

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

(4) A bankrupt who—

(a) without reasonable excuse fails to comply with [F744 an obligation imposed under] his section, or

(b) without reasonable excuse submits a statement of affairs that does not comply with the prescribed requirements,

is guilty of a contempt of court and liable to be punished accordingly (in addition to any other punishment to which he may be subject).

Textual Amendments

F739 Words in s. 288(1) substituted (6.4.2016) by Enterprise and Regulatory Reform Act 2013 (c. 24), s. 103(3), Sch. 19 para. 18; S.I. 2016/191, art. 2 (with art. 3)

F740 Words in s. 288(1) substituted (6.4.2017) by Deregulation Act 2015 (c. 20), s. 115(7), Sch. 6 para. 15(2); S.I. 2016/1016, art. 2(b) (with art. 3)

F741 S. 288(2A) inserted (6.4.2017) by Deregulation Act 2015 (c. 20), s. 115(7), Sch. 6 para. 15(3); S.I. 2016/1016, art. 2(b) (with art. 3)

F742 Words in s. 288(3)(a) substituted (6.4.2017) by Deregulation Act 2015 (c. 20), s. 115(7), Sch. 6 para. 15(4); S.I. 2016/1016, art. 2(b) (with art. 3)

F743 S. 288(3)(b) substituted (6.4.2017) by Deregulation Act 2015 (c. 20), s. 115(7), Sch. 6 para. 15(5); S.I. 2016/1016, art. 2(b) (with art. 3)

F744 Words in s. 288(4)(a) substituted (6.4.2017) by Deregulation Act 2015 (c. 20), s. 115(7), Sch. 6 para. 15(6); S.I. 2016/1016, art. 2(b) (with art. 3)

Modifications etc. (not altering text)

C981 S. 288 modified (29.9.2008 at 8.00 a.m.) by The Bradford & Bingley plc Transfer of Securities and Property etc. Order 2008 (S.I. 2008/2546), art. 13, Sch. 1 para. 1(a)

C982 S. 288 applied with modifications by S.I. 1986/1999, art. 3, Sch. 1 Pt. II (as amended (6.4.2016) by The Enterprise and Regulatory Reform Act 2013 (Consequential Amendments) (Bankruptcy) and the Small Business, Enterprise and Employment Act 2015 (Consequential Amendments) Regulations 2016 (S.I. 2016/481), reg. 1, Sch. 2 para. 2(8)(b))

C983 S. 288 applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 8(3)(9), Sch. 4 Pt. II para. 10

C984 S. 288(1)(2) modified by S.I. 1986/1999, art. 5, Sch. 2

[F745 289 Investigatory duties of official receiver E+W

(1) The official receiver shall—

(a) investigate the conduct and affairs of each bankrupt (including his conduct and affairs before the making of the bankruptcy order), and

(b) make such report (if any) to the court as the official receiver thinks fit.

(2) Subsection (1) shall not apply to a case in which the official receiver thinks an investigation under that subsection unnecessary.

(3) Where a bankrupt makes an application for discharge under section 280—

(a) the official receiver shall make a report to the court about such matters as may be prescribed, and

(b) the court shall consider the report before determining the application.

(4) A report by the official receiver under this section shall in any proceedings be prima facie evidence of the facts stated in it.]

Textual Amendments

F745 S. 289 substituted (1.4.2004) by 2002 c. 40, ss. 258, 279 (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))

Modifications etc. (not altering text)

C985 S.289 applied (with modifications) by S.I. 1986/1999, art. 3, Sch. 1 Pt. II

290 Public examination of bankrupt. E+W

(1) Where a bankruptcy order has been made, the official receiver may at any time before the discharge of the bankrupt apply to the court for the public examination of the bankrupt.

(2) Unless the court otherwise orders, the official receiver shall make an application under subsection (1) if notice requiring him to do so is given to him, in accordance with the rules, by one of the bankrupt’s creditors with the concurrence of not less than one-half, in value, of those creditors (including the creditor giving notice).

(3) On an application under subsection (1), the court shall direct that a public examination of the bankrupt shall be held on a day appointed by the court; and the bankrupt shall attend on that day and be publicly examined as to his affairs, dealings and property.

(4) The following may take part in the public examination of the bankrupt and may question him concerning his affairs, dealings and property and the causes of his failure, namely—

(a) the official receiver and, in the case of an individual [F746 made] bankrupt on a petition under section 264(1)(d), the Official Petitioner,

(b) the trustee of the bankrupt’s estate, if his appointment has taken effect,

(c) any person who has been appointed as special manager of the bankrupt’s estate or business,

(d) any creditor of the bankrupt who has tendered a proof in the bankruptcy.

(5) If a bankrupt without reasonable excuse fails at any time to attend his public examination under this section he is guilty of a contempt of court and liable to be punished accordingly (in addition to any other punishment to which he may be subject).

Textual Amendments

F746 Word in s. 290(4)(a) substituted (6.4.2016) by Enterprise and Regulatory Reform Act 2013 (c. 24), s. 103(3), Sch. 19 para. 19; S.I. 2016/191, art. 2 (with art. 3)

Modifications etc. (not altering text)

C986 S. 290 modified (1.12.1994) by S.I. 1994/2421, art. 11(2)(3), Sch. 7 para. 9

291 Duties of bankrupt in relation to official receiver. E+W

F747 (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F747 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F747 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F748 (4) The bankrupt shall give the official receiver such inventory of his estate and such other information, and shall attend on the official receiver at such times, as the official receiver may reasonably require—

(a) for a purpose of this Chapter, or

(b) in connection with the making of a bankruptcy restrictions order.]

(5) Subsection (4) applies to a bankrupt after his discharge.

(6) If the bankrupt without reasonable excuse fails to comply with any obligation imposed by this section, he is guilty of a contempt of court and liable to be punished accordingly (in addition to any other punishment to which he may be subject).

Textual Amendments

F747 S. 291(1)-(3) omitted (6.4.2017 for E.W.) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 10 para. 4; S.I. 2016/1020, reg. 4(f)

F748 S. 291(4) substituted (1.4.2004) by 2002 c. 40, ss. 269, 279, Sch. 23 para. 5 (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))

Modifications etc. (not altering text)

C987 S. 291 applied (with modifications) by S.I. 1986/1999, art. 3, Sch. 1 Pt. II

Chapter III E+W Trustees in Bankruptcy

Tenure of office as trustee E+W

[F749 291A First trustee in bankruptcy E+W

(1) On the making of a bankruptcy order the official receiver becomes trustee of the bankrupt's estate, unless the court appoints another person under subsection (2).

(2) If when the order is made there is a supervisor of a voluntary arrangement approved in relation to the bankrupt under Part 8, the court may on making the order appoint the supervisor of the arrangement as the trustee.

(3) Where a person becomes trustee of a bankrupt's estate under this section, the person must give notice of that fact to the bankrupt's creditors (or, if the court so allows, advertise it in accordance with the court's directions).

(4) A notice or advertisement given by a trustee appointed under subsection (2) must explain the procedure for establishing a creditors' committee under section 301.]

Textual Amendments

F749 S. 291A inserted (6.4.2017 for E.W.) by Small Business, Enterprise and Employment Act 2015 (c. 26), ss. 133(1), 164(1); S.I. 2016/1020, reg. 4(f)

292 [F750 Appointment of trustees: general provision] E+W

[F751 (1) This section applies to any appointment of a person (other than the official receiver) as trustee of a bankrupt's estate.]

(2) No person may be appointed as trustee of a bankrupt’s estate unless he is, at the time of the appointment, qualified to act as an insolvency practitioner in relation to the bankrupt.

(3) Any power to appoint a person as trustee of a bankrupt’s estate includes power to appoint two or more persons as joint trustees; but such an appointment must make provision as to the circumstances in which the trustees must act together and the circumstances in which one or more of them may act for the others.

(4) The appointment of any person as trustee takes effect only if that person accepts the appointment in accordance with the rules. Subject to this, the appointment of any person as trustee takes effect at the time specified in his certificate of appointment.

F752 (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F750 S. 292 heading substituted (6.4.2017 for E.W.) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 10 para. 5(2); S.I. 2016/1020, reg. 4(f)

F751 S. 292(1) substituted (6.4.2017 for E.W.) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 10 para. 5(3); S.I. 2016/1020, reg. 4(f)

F752 S. 292(5) omitted (6.4.2017 for E.W.) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 10 para. 5(4); S.I. 2016/1020, reg. 4(f)

Modifications etc. (not altering text)

C988 S. 292 applied (with modifications) by S.I. 1986/1999, art. 3, Sch. 1 Pt. II (as amended (6.4.2016) by The Enterprise and Regulatory Reform Act 2013 (Consequential Amendments) (Bankruptcy) and the Small Business, Enterprise and Employment Act 2015 (Consequential Amendments) Regulations 2016 (S.I. 2016/481), reg. 1, Sch. 2 para. 2(7)(c))

C989 S. 292 applied (with modifications) (1.12.1994) by S.I. 1994/2421, arts. 8(3)(9), 10(6), Sch. 4 Pt. II para. 26

C990 S. 292 modified (1.12.1994) by S.I. 1994/2421, art. 11(2)(3), Sch. 7 para. 10

F753 293 Summoning of meeting to appoint first trustee. E+W

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

Textual Amendments

F753 Ss. 293-295 omitted (6.4.2017 for E.W.) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 10 para. 6; S.I. 2016/1020, reg. 4(f)

F753 294 Power of creditors to requisition meeting. E+W

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

Textual Amendments

F753 Ss. 293-295 omitted (6.4.2017 for E.W.) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 10 para. 6; S.I. 2016/1020, reg. 4(f)

F753 295 Failure of meeting to appoint trustee. E+W

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

Textual Amendments

F753 Ss. 293-295 omitted (6.4.2017 for E.W.) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 10 para. 6; S.I. 2016/1020, reg. 4(f)

296 Appointment of trustee by Secretary of State. E+W

(1) At any time when the official receiver is the trustee of a bankrupt’s estate by virtue of any provision of this Chapter F754 ... he may apply to the Secretary of State for the appointment of a person as trustee instead of the official receiver.

(2) On an application under subsection (1) the Secretary of State shall either make an appointment or decline to make one.

(3) Such an application may be made notwithstanding that the Secretary of State has declined to make an appointment either on a previous application under subsection (1) F755 ... or under section 300(4) below.

(4) Where the trustee of a bankrupt’s estate has been appointed by the Secretary of State (whether under this section or otherwise), the trustee shall give notice to the bankrupt’s creditors of his appointment or, if the court so allows, shall advertise his appointment in accordance with the court’s directions.

(5) In that notice or advertisement the trustee shall [F756 explain the procedure for establishing a creditors' committee under section 301.]

Textual Amendments

F754 Words in s. 296(1) omitted (6.4.2017 for E.W.) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 10 para. 7(a); S.I. 2016/1020, reg. 4(f)

F755 Words in s. 296(3) omitted (6.4.2017 for E.W.) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 10 para. 7(b); S.I. 2016/1020, reg. 4(f)

F756 Words in s. 296(5) substituted for s. 296(5)(a)(b) (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 76; S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e)

Modifications etc. (not altering text)

C991 S. 296 applied (with modifications) by S.I. 1986/1999, art. 3, Sch. 1 Pt. II (as amended (6.4.2016) by The Enterprise and Regulatory Reform Act 2013 (Consequential Amendments) (Bankruptcy) and the Small Business, Enterprise and Employment Act 2015 (Consequential Amendments) Regulations 2016 (S.I. 2016/481), reg. 1, Sch. 2 para. 2(7)(c))

C992 S. 296 applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 8(3)(9), Sch. 4 Pt. II para. 12

C993 S. 296 modified (1.12.1994) by S.I. 1994/2421, art. 11(2)(3), Sch. 7 para. 13

F757 297 Special cases. E+W

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

Textual Amendments

F757 S. 297 omitted (6.4.2017 for E.W.) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 10 para. 8; S.I. 2016/1020, reg. 4(f)

298 Removal of trustee; vacation of office. E+W

(1) Subject as follows, the trustee of a bankrupt’s estate may be removed from office only by an order of the court or by a [F758 decision of the bankrupt's creditors made by a creditors' decision procedure instigated] specially for that purpose in accordance with the rules.

F759 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) F760 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) Where the official receiver is trustee by virtue of [F761 section 291A(1)] or a trustee is appointed by the Secretary of State or (otherwise than under [F762 section 291A(2)]) by the court, a [F763 creditors' decision procedure may be instigated] for the purpose of [F764 removing] the trustee only if—

(a) the trustee thinks fit, or

(b) the court so directs, or

(c) F765 ... one of the bankrupt’s creditors [F766 so requests,] with the concurrence of not less than one-quarter, in value, of the creditors (including the creditor making the request).

[F767 (4A) Where the bankrupt's creditors decide to remove a trustee, they may in accordance with the rules appoint another person as trustee in his place.

(4B) Where the decision to remove a trustee is made under subsection (4), the decision does not take effect until the bankrupt's creditors appoint another person as trustee in his place.]

(5) If the trustee was appointed by the Secretary of State, he may be removed by a direction of the Secretary of State.

(6) The trustee (not being the official receiver) shall vacate office if he ceases to be a person who is for the time being qualified to act as an insolvency practitioner in relation to the bankrupt.

(7) The trustee may, in the prescribed circumstances, resign his office by giving notice of his resignation to the [F768 prescribed person].

(8) The trustee shall vacate office on giving notice to the [F768 prescribed person] that [F769 the trustee has given notice under section 331(2).]

[F770 (8A) A notice under subsection (8)—

(a) must not be given before the end of the period prescribed by the rules as the period within which the bankrupt's creditors may object to the trustee's release, and

(b) must state whether any of the bankrupt's creditors objected to the trustee's release.]

(9) The trustee shall vacate office if the bankruptcy order is annulled.

Textual Amendments

F758 Words in s. 298(1) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 77(2); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e)

F759 S. 298(2) omitted (6.4.2017 for E.W.) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 10 para. 9(2); S.I. 2016/1020, reg. 4(f)

F760 S. 298(3) repealed (1.4.2004) by 2002 c. 40, ss. 269, 278, 279, Sch. 23 para. 10, Sch. 26 (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))

F761 Words in s. 298(4) substituted (6.4.2017 for E.W.) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 10 para. 9(3)(a); S.I. 2016/1020, reg. 4(f)

F762 Words in s. 298(4) substituted (6.4.2017 for E.W.) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 10 para. 9(3)(b); S.I. 2016/1020, reg. 4(f)

F763 Words in s. 298(4) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 77(3)(a); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e)

F764 Word in s. 298(4) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 77(3)(b); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e)

F765 Words in s. 298(4)(c) omitted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 77(3)(c)(i); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e)

F766 Words in s. 298(4)(c) inserted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 77(3)(c)(ii); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e)

F767 S. 298(4A)(4B) inserted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 77(4); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e)

F768 Words in s. 298(7)(8) substituted (6.4.2016) by Enterprise and Regulatory Reform Act 2013 (c. 24), s. 103(3), Sch. 19 para. 23; S.I. 2016/191, art. 2 (with art. 3)

F769 Words in s. 298(8) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 77(5); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e)

F770 S. 298(8A) inserted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 77(6); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e)

Modifications etc. (not altering text)

C994 Ss. 298–307 applied (with modifications) by S.I. 1986/1999, art. 3, Sch. 1 Pt. II (as amended (6.4.2016) by The Enterprise and Regulatory Reform Act 2013 (Consequential Amendments) (Bankruptcy) and the Small Business, Enterprise and Employment Act 2015 (Consequential Amendments) Regulations 2016 (S.I. 2016/481), reg. 1, Sch. 2 para. 2(7)(c))

C995 S. 298 modified (1.12.1994) by S.I. 1994/2421, art. 11(2)(3), Sch. 7 para. 15 (as amended (8.12.2017) by The Insolvency (Miscellaneous Amendments) Regulations 2017 (S.I. 2017/1119), reg. 1(1), Sch. 2 para. 7(3); and (23.7.2019) by The Small Business, Enterprise and Employment Act 2015 (Consequential Amendments, Savings and Transitional Provisions) Regulations 2019 (S.I. 2019/1058), regs. 1, 3(2))

299 Release of trustee. E+W

(1) Where the official receiver has ceased to be the trustee of a bankrupt’s estate and a person is appointed in his stead, the official receiver shall have his release with effect from the following time, that is to say—

(a) where that person is appointed by F771 ... the bankrupt’s creditors or by the Secretary of State, the time at which the official receiver gives notice [F772 under this paragraph to the prescribed person] that he has been replaced, and

(b) where that person is appointed by the court, such time as the court may determine.

(2) If the official receiver while he is the trustee gives notice to the Secretary of State that the administration of the bankrupt’s estate in accordance with Chapter IV of this Part is for practical purposes complete, he shall have his release with effect from such time as the Secretary of State may determine.

(3) A person other than the official receiver who has ceased to be the trustee shall have his release with effect from the following time, that is to say—

(a) in the [F773 following cases], the time at which notice is given to the [F774 prescribed person] in accordance with the rules that that person has ceased to hold office [F775 —

(i) the person has been removed from office by a decision of the bankrupt's creditors and the creditors have not decided against his release,

(ii) the person has died;]

[F776 (b) in the following cases, such time as the Secretary of State may, on an application by the person, determine—

(i) the person has been removed from office by a decision of the bankrupt's creditors and the creditors have decided against his release,

(ii) the person has been removed from office by the court or by the Secretary of State,

(iii) the person has vacated office under section 298(6);]

(c) in the case of a person who has resigned, such time as may be prescribed;

(d) in the case of a person who has vacated office under section 298(8)—

[F777 (i) if any of the bankrupt's creditors objected to the person's release before the end of the period for so objecting prescribed by the rules, such time as the Secretary of State may, on an application by that person, determine, and

(ii) otherwise, the time at which the person vacated office.]

[F778 (3A) Where the person is removed from office by a decision of the bankrupt's creditors, any decision of the bankrupt's creditors as to whether the person should have his release must be made by a creditors' decision procedure.]

(4) Where a bankruptcy order is annulled, the trustee at the time of the annulment has his release with effect from such time as the court may determine.

(5) Where the offical receiver or the trustee has his release under this section, he shall, with effect from the time specified in the preceeding provisions of this section, be discharged from all liability both in respect of acts or omissions of his in the administration of the estate and otherwise in relation to his conduct as trustee.

But nothing in this section prevents the exercise, in relation to a person who has had his release under this section, of the court’s powers under section 304.

Textual Amendments

F771 Words in s. 299(1)(a) omitted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 78(2); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e)

F772 Words in s. 299(1)(a) substituted (6.4.2016) by Enterprise and Regulatory Reform Act 2013 (c. 24), s. 103(3), Sch. 19 para. 24(2); S.I. 2016/191, art. 2 (with art. 3)

F773 Words in s. 299(3)(a) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 78(3)(a); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e)

F774 Words in s. 299(3)(a) substituted (6.4.2016) by Enterprise and Regulatory Reform Act 2013 (c. 24), s. 103(3), Sch. 19 para. 24(3); S.I. 2016/191, art. 2 (with art. 3)

F775 Words in s. 299(3)(a) inserted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 78(3)(b); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e)

F776 S. 299(3)(b) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 78(4); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e)

F777 S. 299(3)(d)(i)(ii) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 78(5); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e)

F778 S. 299(3A) inserted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 78(6); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e)

Modifications etc. (not altering text)

C996 Ss. 298–307 applied (with modifications) by S.I. 1986/1999, art. 3, Sch. 1 Pt. II (as amended (6.4.2016) by The Enterprise and Regulatory Reform Act 2013 (Consequential Amendments) (Bankruptcy) and the Small Business, Enterprise and Employment Act 2015 (Consequential Amendments) Regulations 2016 (S.I. 2016/481), reg. 1, Sch. 2 para. 2(7)(c))

C997 S. 299 applied (with modifications) (1.12.1994) by S.I. 1994/2421, arts. 8(3)(9), 10(6), Sch. 4 Pt. II para. 22

C998 S. 299 modified (1.12.1994) by S.I. 1994/2421, art. 11(2)(3), Sch. 7 para. 16

300 Vacancy in office as trustee. E+W

(1) This section applies where the appointment of any person as trustee of a bankrupt’s estate fails to take effect or, such an appointment having taken effect, there is otherwise a vacancy in the office of trustee.

(2) The official receiver shall be trustee until the vacancy is filled.

[F779 (3) The official receiver may ask the bankrupt's creditors to appoint a person as trustee, and must do so if so requested by not less than one tenth in value of the bankrupt's creditors.

(3A) If the official receiver makes such a request the bankrupt's creditors may in accordance with the rules appoint a person as trustee.]

(4) If at the end of the period of 28 days beginning with the day on which the vacancy first came to the offical receiver’s attention he has not [F780 asked, and is not proposing to ask, the bankrupt's creditors to appoint a person as trustee], he shall refer the need for an appointment to the Secretary of State.

F781 (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) On a reference to the Secretary of State under subsection (4) F782 . . . the Secretary of State shall either make an appointment or decline to make one.

(7) If on a reference under subsection (4) F782 . . . no appointment is made, the official receiver shall continue to be trustee of the bankrupt’s estate, but without prejudice to his power to make a further reference.

(8) References in this section to a vacancy include a case where it is necessary, in relation to any property which is or may be comprised in a bankrupt’s estate, to revive the trusteeship of that estate after the [F783 vacation of office by the trustee under section 298(8)] or the giving by the official receiver of notice under section 299(2).

Textual Amendments

F779 S. 300(3)(3A) substituted for s. 300(3) (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 79(2); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e)

F780 Words in s. 300(4) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 79(3); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e)

F781 S. 300(5) repealed (1.4.2004) by 2002 c. 40, ss. 269, 278, 279, Sch. 23 para. 11(a), Sch. 26 (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))

F782 Words in s. 300(6)(7) repealed (1.4.2004) by 2002 c. 40, ss. 269, 278, 279, Sch. 23 para. 11(b), Sch. 26 (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))

F783 Words in s. 300(8) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 79(4); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e)

Modifications etc. (not altering text)

C999 Ss. 298-307 applied (with modifications) by S.I. 1986/1999, art. 3, Sch. 1 Pt. II (as amended (6.4.2016) by The Enterprise and Regulatory Reform Act 2013 (Consequential Amendments) (Bankruptcy) and the Small Business, Enterprise and Employment Act 2015 (Consequential Amendments) Regulations 2016 (S.I. 2016/481), reg. 1, Sch. 2 para. 2(7)(c))

C1000 S. 300 applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 8(3)(9), Sch. 4 Pt. II para. 12

C1001 S. 300 modified (1.12.1994) by S.I. 1994/2421, art. 11(2)(3), Sch. 7 para. 17

Control of trustee E+W

301 Creditors’ committee. E+W

(1) Subject as follows, a [F784 bankrupt's creditors] may, in accordance with the rules, establish a committee (known as “the creditors’ committee”) to exercise the functions conferred on it by or under this Act.

(2) [F785 The] bankrupt’s creditors shall not establish such a committee, or confer any functions on such a committee, at any time when the official receiver is the trustee of the bankrupt’s estate, except in connection with [F786 the appointment] of a person to be trustee instead of the official receiver.

Textual Amendments

F784 Words in s. 301(1) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 80(2); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e)

F785 Word in s. 301(2) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 80(3)(a); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e)

F786 Words in s. 301(2) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 80(3)(b); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e)

Modifications etc. (not altering text)

C1002 Ss. 298–307 applied (with modifications) by S.I. 1986/1999, art. 3, Sch. 1 Pt. II (as amended (6.4.2016) by The Enterprise and Regulatory Reform Act 2013 (Consequential Amendments) (Bankruptcy) and the Small Business, Enterprise and Employment Act 2015 (Consequential Amendments) Regulations 2016 (S.I. 2016/481), reg. 1, Sch. 2 para. 2(7)(c))

C1003 S. 301 applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 8(3)(9), Sch. 4 Pt. II para. 16

C1004 S. 301 modified (1.12.1994) by S.I. 1994/2421, art. 11(2)(3), Sch. 7 para. 18

S. 301 amended (1.12.2001) by 2000 c. 8, s. 374(4)(b); S.I. 2001/3538, art. 2(1)

302 Exercise by Secretary of State of functions of creditors’ committee. E+W

(1) The creditors’ committee is not to be able or required to carry out its functions at any time when the official receiver is trustee of the bankrupt’s estate; but at any such time the functions of the committee under this Act shall be vested in the Secretary of State, except to the extent that the rules otherwise provide.

(2) Where in the case of any bankruptcy there is for the time being no creditors’ committee and the trustee of the bankrupt’s estate is a person other than the official receiver, the functions of such a committee shall be vested in the Secretary of State, except to the extent that the rules otherwise provide.

Modifications etc. (not altering text)

C1005 Ss. 298–307 applied (with modifications) by S.I. 1986/1999, art. 3, Sch. 1 Pt. II (as amended (6.4.2016) by The Enterprise and Regulatory Reform Act 2013 (Consequential Amendments) (Bankruptcy) and the Small Business, Enterprise and Employment Act 2015 (Consequential Amendments) Regulations 2016 (S.I. 2016/481), reg. 1, Sch. 2 para. 2(7)(c))

C1006 S. 302 applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 8(3)(9), Sch. 4 Pt. II para. 16

303 General control of trustee by the court. E+W

(1) If a bankrupt or any of his creditors or any other person is dissatisfied by any act, omission or decision of a trustee of the bankrupt’s estate, he may apply to the court; and on such an application the court may confirm, reverse or modify any act or decision of the trustee, may give him directions or may make such other order as it thinks fit.

(2) The trustee of a bankrupt’s estate may apply to the court for directions in relation to any particular matter arising under the bankruptcy.

[F787 (2A) Where at any time after a bankruptcy petition has been presented to the court against any person, whether under the provisions of the Insolvent Partnerships Order 1994 or not, the attention of the court is drawn to the fact that the person in question is a member of an insolvent partnership, the court may make an order as to the future conduct of the insolvency proceedings and any such order may apply any provisions of that Order with any necessary modifications.

(2B) Where a bankruptcy petition has been presented against more than one individual in the circumstances mentioned in subsection (2A) above, the court may give such directions for consolidating the proceedings, or any of them, as it thinks just.

(2C) Any order or directions under subsection (2A) or (2B) may be made or given on the application of the official receiver, any responsible insolvency practitioner, the trustee of the partnership or any other interested person and may include provisions as to the administration of the joint estate of the partnership, and in particular how it and the separate estate of any member are to be administered.]

Textual Amendments

F787 S. 303(2A)-(2C) inserted (1.12.1994) by S.I. 1994/2421, art. 14(2)

Modifications etc. (not altering text)

C1007 Ss. 298–307 applied with modifications by S.I. 1986/1999, art. 3, Sch. 1 Pt. II

C1008 S. 303 applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 8(3)(9), Sch. 4 Pt. II para. 20

304 Liability of trustee. E+W

(1) Where on an application under this section the court is satisfied—

(a) that the trustee of a bankrupt’s estate has misapplied or retained, or become accountable for, any money or other property comprised in the bankrupt’s estate, or

(b) that a bankrupt’s estate has suffered any loss in consequence of any misfeasance or breach of fiduciary or other duty by a trustee of the estate in the carrying out of his functions,

the court may order the trustee, for the benefit of the estate, to repay, restore or account for money or other property (together with interest at such rate as the court thinks just) or, as the case may require, to pay such sum by way of compensation in respect of the misfeasance or breach of fiduciary or other duty as the court thinks just.

This is without prejudice to any liability arising apart from this section.

(2) An application under this section may be made by the official receiver, the Secretary of State, a creditor of the bankrupt or (whether or not there is, or is likely to be, a surplus for the purposes of section 330(5) (final distribution)) the bankrupt himself.

But the leave of the court is required for the making of an application if it is to be made by the bankrupt or if it is to be made after the trustee has had his release under section 299.

(3) Where—

(a) the trustee seizes or disposes of any property which is not comprised in the bankrupts estate, and

(b) at the time of the seizure or disposal the trustee believes, and has reasonable grounds for believing, that he is entitled (whether in pursuance of an order of the court or otherwise) to seize or dispose of that property,

the trustee is not liable to any person (whether under this section or otherwise) in respect of any loss or damage resulting from the seizure or disposal except in so far as that loss or damage is caused by the negligence of the trustee; and he has a lien on the property, or the proceeds of its sale, for such of the expenses of the bankruptcy as were incurred in connection with the seizure or disposal.

Modifications etc. (not altering text)

C1009 Ss. 298-307 applied (with modifications) by S.I. 1986/1999, art. 3, Sch. 1 Pt. II

S. 304 applied (10.8.2005) by The Insurers (Reorganisation and Winding Up) Regulations 2004 (S.I. 2004/353), reg. 31 (as amended (10.8.2005) by S.I. 2005/1998, regs. 2(3), {40(1)-(4)(10)(a)})

Chapter IV E+W Administration by Trustee

Preliminary E+W

305 General functions of trustee. E+W

(1) This Chapter applies in relation to any bankruptcy where either—

(a) the appointment of a person as trustee of a bankrupt’s estate takes effect, or

(b) the official receiver becomes trustee of a bankrupt’s estate.

(2) The function of the trustee is to get in, realise and distribute the bankrupt’s estate in accordance with the following provisions of this Chapter; and in the carrying out of that function and in the management of the bankrupt’s estate the trustee is entitled, subject to those provisions, to use his own discretion.

(3) It is the duty of the trustee, if he is not the official receiver—

(a) to furnish the official receiver with such information,

(b) to produce to the offical receiver, and permit inspection by the official receiver of, such books, papers and other records, and

(c) to give the official receiver such other assistance,

as the official receiver may reasonably require for the purpose of enabling him to carry out his functions in relation to the bankruptcy.

(4) The official name of the trustee shall be “the trustee of the estate of ............, a bankrupt” (inserting the name of the bankrupt); but he may be referred to as “the trustee in bankruptcy” of the particular bankrupt.

Modifications etc. (not altering text)

C1010 S. 305 modified (29.9.2008 at 8.00 a.m.) by The Bradford & Bingley plc Transfer of Securities and Property etc. Order 2008 (S.I. 2008/2546), art. 13, Sch. 1 para. 1(b)

C1011 Ss. 298–307 applied with modifications by S.I. 1986/1999, art. 3, Sch. 1 Pt. II

C1012 S. 305 applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 8(3)(9), Sch. 4 Pt. II para. 17

C1013 S. 305 modified (1.12.1994) by S.I. 1994/2421, art. 11(2)(3), Sch. 7 para. 19

Acquisition, control and realisation of bankrupt’s estate E+W

306 Vesting of bankrupt’s estate in trustee. E+W

(1) The bankrupt’s estate shall vest in the trustee immediately on his appointment taking effect or, in the case of the official receiver, on his becoming trustee.

(2) Where any property which is, or is to be, comprised in the bankrupt’s estate vests in the trustee (whether under this section or under any other provision of this Part), it shall so vest without any conveyance, assignment or transfer.

Modifications etc. (not altering text)

C1014 Ss. 298–307 applied with modifications by S.I. 1986/1999, art. 3, Sch. 1 Pt. II

[F788 306A Property subject to restraint order E+W

(1) This section applies where—

(a) property is excluded from the bankrupt’s estate by virtue of section 417(2)(a) of the Proceeds of Crime Act 2002 (property subject to a restraint order),

(b) an order under [F789 section 50, 67A, 128, 131A, 198 or 215A] of that Act has not been made in respect of the property, F790 ...

(c) the restraint order is discharged [F791 , and

(d) immediately after the discharge of the restraint order the property is not detained under or by virtue of section 44A, 47J, 122A, 127J, 193A or 195J of that Act.]

[F792 (2) The property vests in the trustee as part of the bankrupt's estate.]

(3) But subsection (2) does not apply to the proceeds of property realised by a management receiver under section 49(2)(d) or 197(2)(d) of that Act (realisation of property to meet receiver’s remuneration and expenses).]

Textual Amendments

F788 Ss. 306A-306C inserted (24.3.2003) by 2002 c. 29, ss. 456, 458(1)(3), Sch. 11 para. 16(3); S.I. 2003/333, art. 2, Sch. (subject to arts. 3-13 (as amended by S.I. 2003/531, arts. 3, 4)); S.S.I. 2003/210, art. 2, Sch. (subject to arts. 3-7)

F789 Words in s. 306A(1)(b) substituted (1.6.2015 for specified purposes, 1.3.2016 in so far as not already in force) by Policing and Crime Act 2009 (c. 26), s. 116(1), Sch. 7 para. 54(2)(a); S.I. 2015/983, arts. 2(2)(e), 3(g); S.I. 2016/147, art. 3(i)

F790 Word in s. 306A(1)(b) repealed (1.6.2015) by Policing and Crime Act 2009 (c. 26), s. 116(1), Sch. 8 Pt. 4; S.I. 2015/983, art. 2(2)(f)

F791 S. 306A(1)(d) and word inserted (1.6.2015 for specified purposes, 1.3.2016 in so far as not already in force) by Policing and Crime Act 2009 (c. 26), s. 116(1), Sch. 7 para. 54(2)(b); S.I. 2015/983, arts. 2(2)(e), 3(g); S.I. 2016/147, art. 3(i)

F792 S. 306A(2) substituted (1.6.2015) by Policing and Crime Act 2009 (c. 26), s. 116(1), Sch. 7 para. 54(3); S.I. 2015/983, arts. 2(2)(e), 3(g)

[F793 306AA Property released from detention E+W

(1) This section applies where—

(a) property is excluded from the bankrupt's estate by virtue of section 417(2)(b) of the Proceeds of Crime Act 2002 (property detained under certain provisions),

(b) no order is in force in respect of the property under section 41, 50, 120, 128, 190 or 198 of that Act, and

(c) the property is released.

(2) The property vests in the trustee as part of the bankrupt's estate.]

Textual Amendments

F793 S. 306AA inserted (1.6.2015) by Policing and Crime Act 2009 (c. 26), s. 116(1), Sch. 7 para. 55; S.I. 2015/983, arts. 2(2)(e), 3(h)

F794 306B Property in respect of which receivership or administration order made E+W

(1) This section applies where—

(a) property is excluded from the bankrupt’s estate by virtue of [F795 section 417(2)(c)] of the Proceeds of Crime Act 2002 (property in respect of which an order for the appointment of a receiver or administrator under certain provisions of that Act is in force),

(b) a confiscation order is made under section 6, 92 or 156 of that Act,

(c) the amount payable under the confiscation order is fully paid, and

(d) any of the property remains in the hands of the receiver or administrator (as the case may be).

(2) The property vests in the trustee as part of the bankrupt’s estate.

Textual Amendments

F794 Ss. 306A-306C inserted (24.3.2003) by 2002 c. 29, ss. 456, 458(1)(3), Sch. 11 para. 16(3); S.I. 2003/333, art. 2, Sch. (subject to arts. 3-13 (as amended by S.I. 2003/531, arts. 3, 4)); S.S.I. 2003/210, art. 2, Sch. (subject to arts. 3-7)

F795 Words in s. 306B(1)(a) substituted (1.6.2015) by Policing and Crime Act 2009 (c. 26), s. 116(1), Sch. 7 para. 56; S.I. 2015/983, arts. 2(2)(e), 3(h)

[F796 306BA Property in respect of which realisation order made E+W

(1) This section applies where—

(a) property is excluded from the bankrupt's estate by virtue of section 417(2)(d) of the Proceeds of Crime Act 2002 (property in respect of which an order has been made authorising realisation of the property by an appropriate officer),

(b) a confiscation order is made under section 6, 92 or 156 of that Act,

(c) the amount payable under the confiscation order is fully paid, and

(d) any of the property remains in the hands of the appropriate officer.

(2) The property vests in the trustee as part of the bankrupt's estate.]

Textual Amendments

F796 S. 306BA inserted (1.6.2015) by Policing and Crime Act 2009 (c. 26), s. 116(1), Sch. 7 para. 57; S.I. 2015/983, arts. 2(2)(e), 3(h)

F797 306C Property subject to certain orders where confiscation order discharged or quashed E+W

(1) This section applies where—

(a) property is excluded from the bankrupt’s estate by virtue of section 417(2)(a), (b), (c) or (d) of the Proceeds of Crime Act 2002 (property [F798 excluded from bankrupt's estate] ),

(b) a confiscation order is made under section 6, 92 or 156 of that Act, and

(c) the confiscation order is discharged under section 30, 114 or 180 of that Act (as the case may be) or quashed under that Act or in pursuance of any enactment relating to appeals against conviction or sentence.

[F799 (2) Any such property vests in the trustee as part of the bankrupt's estate if it is in the hands of—

(a) a receiver appointed under Part 2 or 4 of that Act,

(b) an administrator appointed under Part 3 of that Act,

(c) an appropriate officer (within the meaning of section 41A, 120A or 190A of that Act).]

(3) But subsection (2) does not apply to the proceeds of property realised by a management receiver under section 49(2)(d) or 197(2)(d) of that Act (realisation of property to meet receiver’s remuneration and expenses).

Textual Amendments

F797 Ss. 306A-306C inserted (24.3.2003) by 2002 c. 29, ss. 456, 458(1)(3), Sch. 11 para. 16(3); S.I. 2003/333, art. 2, Sch. (subject to arts. 3-13 (as amended by S.I. 2003/531, arts. 3, 4)); S.S.I. 2003/210, art. 2, Sch. (subject to arts. 3-7)

F798 Words in s. 306C(1)(a) substituted (1.6.2015) by Policing and Crime Act 2009 (c. 26), s. 116(1), Sch. 7 para. 58(2); S.I. 2015/983, arts. 2(2)(e), 3(i)

F799 S. 306C(2) substituted (1.6.2015 for specified purposes, 1.3.2016 in so far as not already in force) by Policing and Crime Act 2009 (c. 26), s. 116(1), Sch. 7 para. 58(3); S.I. 2015/983, arts. 2(2)(e), 3(i); S.I. 2016/147, art. 3(i)

307 After-acquired property. E+W

(1) Subject to this section and section 309, the trustee may by notice in writing claim for the bankrupt’s estate any property which has been acquired by, or has devolved upon, the bankrupt since the commencement of the bankruptcy.

(2) A notice under this section shall not be served in respect of—

(a) any property falling within subsection (2) or (3) of section 283 in Chapter II,

[F800 (aa) any property vesting in the bankrupt by virtue of section 283A in Chapter II,]

(b) any property which by virtue of any other enactment is excluded from the bankrupt’s estate, or

(c) without prejudice to section 280(2)(c) (order of court on application for discharge), any property which is acquired by, or devolves upon, the bankrupt after his discharge.

(3) [F801 Subject to subsections (4) and (4A)] , upon the service on the bankrupt of a notice under this section the property to which the notice relates shall vest in the trustee as part of the bankrupt’s estate; and the trustee’s title to that property has relation back to the time at which the property was acquired by, or devolved upon, the bankrupt.

(4) Where, whether before or after service [F802 on the bankrupt] of a notice under this section—

(a) a person acquires property in good faith, for value and without notice of the bankruptcy, F803 ...

F803 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

the trustee is not in respect of that property F804 ... entitled by virtue of this section to any remedy against that person F805 ..., or any person whose title to any property derives from that person F805 ....

[F806 (4A) Where a banker enters into a transaction before service on the banker of a notice under this section (and whether before or after service on the bankrupt of a notice under this section) the trustee is not in respect of that transaction entitled by virtue of this section to any remedy against the banker.

This subsection applies whether or not the banker has notice of the bankruptcy.]

(5) References in this section to property do not include any property which, as part of the bankrupt’s income, may be the subject of an income payments order under section 310.

Textual Amendments

F800 S. 307(2)(aa) inserted (1.4.2004) by 2002 c. 40, ss. 261(4), 279 (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))

F801 Words in s. 307(3) substituted (1.10.2015) by Deregulation Act 2015 (c. 20), s. 115(7), Sch. 6 para. 16(2); S.I. 2015/1732, art. 2(e)(v)

F802 Words in s. 307(4) inserted (1.10.2015) by Deregulation Act 2015 (c. 20), s. 115(7), Sch. 6 para. 16(3)(a); S.I. 2015/1732, art. 2(e)(v)

F803 S. 307(4)(b) and word omitted (1.10.2015) by virtue of Deregulation Act 2015 (c. 20), s. 115(7), Sch. 6 para. 16(3)(b); S.I. 2015/1732, art. 2(e)(v)

F804 Words in s. 307(4) omitted (1.10.2015) by virtue of Deregulation Act 2015 (c. 20), s. 115(7), Sch. 6 para. 16(3)(c)(i); S.I. 2015/1732, art. 2(e)(v)

F805 Words in s. 307(4) omitted (1.10.2015) by virtue of Deregulation Act 2015 (c. 20), s. 115(7), Sch. 6 para. 16(3)(c)(ii); S.I. 2015/1732, art. 2(e)(v)

F806 S. 307(4A) inserted (1.10.2015) by Deregulation Act 2015 (c. 20), s. 115(7), Sch. 6 para. 16(4); S.I. 2015/1732, art. 2(e)(v)

Modifications etc. (not altering text)

C1015 Ss. 298-307 applied (with modifications) by S.I. 1986/1999, art. 3, Sch. 1 Pt. II

C1016 S. 307 amended by Education (Student Loans) Act 1990 (c. 6, SIF 41:1, 2), s. 1(5), Sch. 2 para. 5(1)

C1017 S. 307 restricted (12.8.1998) by S.I. 1998/2003, reg. 13(1)

S. 307 restricted (25.2.2002) by S.I. 2002/195, reg. 40(1)

S. 307 restricted (1.3.2005) by The Education (Student Support) Regulations 2005 (S.I. 2005/52), reg. 28(1) (with reg. 3(6)-(9))

C1018 S. 307 excluded (16.6.2016) by The Education (Postgraduate Masters Degree Loans) Regulations 2016 (S.I. 2016/606), regs. 1(1), 97(1)(a)

308 Vesting in trustee of certain items of excess value. E+W

(1) Subject to [F807 section 309], where—

(a) property is excluded by virtue of section 283(2) (tools of trade, household effects, etc.) from the bankrupt’s estate, and

(b) it appears to the trustee that the realisable value of the whole or any part of that property exceeds the cost of a reasonable replacement for that property or that part of it,

the trustee may by notice in writing claim that property or, as the case may be, that part of it, for the bankrupt’s estate.

(2) Upon the service on the bankrupt of a notice under this section, the property to which the notice relates vests in the trustee as part of the bankrupt’s estate; and, except against a purchaser in good faith, for value and without notice of the bankruptcy, the trustee’s title to that property has relation back to the commencement of the bankruptcy.

(3) The trustee shall apply funds comprised in the estate to the purchase by or on behalf of the bankrupt of a reasonable replacement for any property vested in the trustee under this section; and the duty imposed by this subsection has priority over the obligation of the trustee to distribute the estate.

(4) For the purposes of this section property is a reasonable replacement for other property if it is reasonably adequate for meeting the needs met by the other property.

Textual Amendments

F807 Words substituted by Housing Act 1988 (c. 50, SIF 61, 75:1), s. 140, Sch. 17 Pt. I para. 73

Modifications etc. (not altering text)

C1019 S. 308 applied with modifications by S.I. 1986/1999, art. 3, Sch. 1 Pt. II

[F808 308A Vesting in trustee of certain tenancies. E+W

Upon the service on the bankrupt by the trustee of a notice in writing under this section, any tenancy—

(a) which is excluded by virtue of section 283(3A) from the bankrupt’s estate, and

(b) to which the notice relates,

vests in the trustee as part of the bankrupt’s estate; and, except against a purchaser in good faith, for value and without notice of the bankruptcy, the trustee’s title to that tenancy has relation back to the commencement of the bankruptcy.]

Textual Amendments

F808 S. 308A inserted by Housing Act 1988 (c. 50, SIF 75:1), s. 117(2)

309 Time-limit for notice under s. 307 or 308. E+W

(1) Except with the leave of the court, a notice shall not be served—

(a) under section 307, after the end of the period of 42 days beginning with the day on which it first came to the knowledge of the trustee that property in question had been acquired by, or had devolved upon, the bankrupt;

(b) under section 308 [F809 or section 308A], after the end of the period of 42 days beginning with the day on which the property [F810 or tenancy] in question first came to the knowledge of the trustee.

(2) For the purposes of this section—

(a) any thing which comes to the knowledge of the trustee is deemed in relation to any successor of his as trustee to have come to the knowledge of the sucessor at the same time; and

(b) any thing which comes (otherwise than under paragraph (a)) to the knowledge of a person before he is the trustee is deemed to come to his knowledge on his appointment taking effect or, in the case of the official receiver, on his becoming trustee.

Textual Amendments

F809 Words inserted by Housing Act 1988 (c. 50, SIF 75:1), s. 117(3)(a)

F810 Words inserted by Housing Act 1988 (c. 50, SIF 75:1), s. 117(3)(b)

Modifications etc. (not altering text)

C1020 S. 309 applied with modifications by S.I. 1986/1999, art. 3, Sch. 1 Pt. II

310 Income payments orders. E+W

(1) The court may F811 . . . make an order (“an income payments order”) claiming for the bankrupt’s estate so much of the income of the bankrupt during the period for which the order is in force as may be specified in the order.

[F812 (1A) An income payments order may be made only on an application instituted—

(a) by the trustee, and

(b) before the discharge of the bankrupt.]

(2) The court shall not make an income payments order the effect of which would be to reduce the income of the bankrupt [F813 when taken together with any payments to which subsection (8) applies] below what appears to the court to be necessary for meeting the reasonable domestic needs of the bankrupt and his family.

(3) An income payments order shall, in respect of any payment of income to which it is to apply, either—

(a) require the bankrupt to pay the trustee an amount equal to so much of that payment as is claimed by the order, or

(b) require the person making the payment to pay so much of it as is so claimed to the trustee, instead of to the bankrupt.

(4) Where the court makes an income payments order it may, if it thinks fit, discharge or vary any attachment of earnings order that is for the time being in force to secure payments by the bankrupt.

(5) Sums received by the trustee under an income payments order form part of the bankrupt’s estate.

[F814 (6) An income payments order must specify the period during which it is to have effect; and that period—

(a) may end after the discharge of the bankrupt, but

(b) may not end after the period of three years beginning with the date on which the order is made.

(6A) An income payments order may (subject to subsection (6)(b)) be varied on the application of the trustee or the bankrupt (whether before or after discharge).]

(7) For the purposes of this section the income of the bankrupt comprises every payment in the nature of income which is from time to time made to him or to which he from time to time becomes entitled, including any payment in respect of the carrying on of any business or in respect of any office or employment [F815 and [F816 (despite anything in section 11 or 12 of the Welfare Reform and Pensions Act 1999)] any payment under a pension scheme but excluding any payment to which subsection (8) applies..

(8) This subsection applies to—

(a) payments by way of guaranteed minimum pension; F817 ...

F817 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(9) In this section, “guaranteed minimum pension” [F818 has] the same meaning as in the Pension Schemes Act 1993.]

Textual Amendments

F811 Words in s. 310(1) repealed (1.4.2004) by 2002 c. 40, ss. 259(2), 278, 279, Sch. 26 (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))

F812 S. 310(1A) inserted (1.4.2004) by 2002 c. 40, ss. 259(3), 279 (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))

F813 Words in s. 310(2) inserted (6.4.1997) by 1995 c. 26, s. 122, Sch. 3 para. 15(a) (with s. 121(5)); S.I. 1997/664, art. 2(3), Sch. Pt. II (with transitional adaptations, modifications and savings in arts. 3-14)

F814 S. 310(6)(6A) substituted (1.4.2004) for s. 310(6) by 2002 c. 40, ss. 259(4), 279, (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))

F815 S. 310(8)(9) and words preceding them added (6.4.1997) by 1995 c. 26, s. 122, Sch. 3 para. 15(b) (with s. 121(5)); S.I. 1997/664, art. 2(3), Sch. Pt. II (with transitional adaptations, modifications and savings in arts. 3-14)

F816 Words in s. 310(7) inserted (11.11.1999 for the purpose only of any exercise of power to make regulations, otherwise 29.5.2000) by 1999 c. 30, ss. 18, 89(5), Sch. 2 para. 2; S.I. 2000/1382, art. 2(e)

F817 S. 310(8)(b) and word omitted (6.4.2012) by S.I. 2011/1730, art. 3(2) (as substituted) by virtue of The Pensions Act 2008 (Abolition of Protected Rights) (Consequential Amendments) (No.2) (Amendment) Order 2012 (S.I. 2012/709), arts. 1(2), 2(2)

F818 Word in s. 310(9) substituted (6.4.2012) by S.I. 2011/1730, art. 3(3) (as substituted) by The Pensions Act 2008 (Abolition of Protected Rights) (Consequential Amendments) (No.2) (Amendment) Order 2012 (S.I. 2012/709), arts. 1(2), 2(2)

Modifications etc. (not altering text)

C1021 S. 310 applied (with modifications) by S.I. 1986/1999, art. 3, Sch. 1 Pt. II

C1022 S. 310 amended by Education (Student Loans) Act 1990 (c. 6, SIF 41:1, 2), s. 1(5), Sch. 2 para. 5(1)

C1023 S. 310 restricted (12.8.1998) by S.I. 1998/2003, reg. 13(1)

S. 310 restricted (25.2.2002) by S.I. 2002/195, reg. 40(1)

S. 310 restricted (1.3.2005) by The Education (Student Support) Regulations 2005 (S.I. 2005/52), reg. 28(1) (with reg. 3(6)-(9))

C1024 S. 310 excluded (16.6.2016) by The Education (Postgraduate Masters Degree Loans) Regulations 2016 (S.I. 2016/606), regs. 1(1), 97(1)(a)

[F819 310A Income payments agreement E+W

(1) In this section “income payments agreement” means a written agreement between a bankrupt and his trustee or between a bankrupt and the official receiver which provides—

(a) that the bankrupt is to pay to the trustee or the official receiver an amount equal to a specified part or proportion of the bankrupt’s income for a specified period, or

(b) that a third person is to pay to the trustee or the official receiver a specified proportion of money due to the bankrupt by way of income for a specified period.

(2) A provision of an income payments agreement of a kind specified in subsection (1)(a) or (b) may be enforced as if it were a provision of an income payments order.

(3) While an income payments agreement is in force the court may, on the application of the bankrupt, his trustee or the official receiver, discharge or vary an attachment of earnings order that is for the time being in force to secure payments by the bankrupt.

(4) The following provisions of section 310 shall apply to an income payments agreement as they apply to an income payments order—

(a) subsection (5) (receipts to form part of estate), and

(b) subsections (7) to (9) (meaning of income).

(5) An income payments agreement must specify the period during which it is to have effect; and that period—

(a) may end after the discharge of the bankrupt, but

(b) may not end after the period of three years beginning with the date on which the agreement is made.

(6) An income payments agreement may (subject to subsection (5)(b)) be varied—

(a) by written agreement between the parties, or

(b) by the court on an application made by the bankrupt, the trustee or the official receiver.

(7) The court—

(a) may not vary an income payments agreement so as to include provision of a kind which could not be included in an income payments order, and

(b) shall grant an application to vary an income payments agreement if and to the extent that the court thinks variation necessary to avoid the effect mentioned in section 310(2).]

Textual Amendments

F819 S. 310A inserted (1.4.2004) by 2002 c. 40, ss. 260, 279 (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))

Modifications etc. (not altering text)

C1025 S. 310A excluded (16.6.2016) by The Education (Postgraduate Masters Degree Loans) Regulations 2016 (S.I. 2016/606), regs. 1(1), 97(1)(a)

311 Acquisition by trustee of control. E+W

(1) The trustee shall take possession of all books, papers and other records which relate to the bankrupt’s estate or affairs and which belong to him or are in his possession or under his control (including any which would be privileged from disclosure in any proceedings).

(2) In relation to, and for the purpose of acquiring or retaining possession of, the bankrupt’s estate, the trustee is in the same position as if her were a receiver of property appointed by the High Court; and the court may, on his application, enforce such acquisition or retention accordingly.

(3) Where any part of the bankrupt’s estate consists of stock or shares in a company, shares in a ship or any other property transferable in the books of a company, office or person, the trustee may exercise the right to transfer the property to the same extent as the bankrupt might have exercised it if he had not become bankrupt.

(4) Where any part of the estate consists of things in action, they are deemed to have been assigned to the trustee; but notice of the deemed assignment need not be given except in so far as it is necessary, in a case where the deemed assignment is from the bankrupt himself for protecting the priority of the trustee.

(5) Where any goods comprised in the estate are held by any person by way of pledge, pawn or other security and no notice has been served in respect of those goods by the official receiver under subsection (5) of section 285 (restriction on realising security), the trustee may serve such a notice in respect of the goods; and whether or not a notice has been served under this subsection or that subsection, the trustee may, if he thinks fit, exercise the bankrupt’s right of redemption in respect of any such goods.

(6) A notice served by the trustee under subsection (5) has the same effect as a notice served by the official receiver under section 285(5).

Modifications etc. (not altering text)

C1026 S. 311 applied with modifications by S.I. 1986/1999, art. 3, Sch. 1 Pt. II

312 Obligation to surrender control to trustee. E+W

(1) The bankrupt shall deliver up to the trustee possession of any property, books, papers or other records of which he has possession or control and of which the trustee is required to take possession.

This is without prejudice to the general duties of the bankrupt under section 333 in this Chapter.

(2) If any of the following is in possession of any property, books, papers or other records of which the trustee is required to take possession, namely—

(a) the official receiver,

(b) a person who has ceased to be trustee of the bankrupt’s estate, or

(c) a person who has been the supervisor of a voluntary arrangement approved in relation to the bankrupt under Part VIII,

the official receiver or, as the case may be, that person shall deliver up possession of the property, books, papers or records to the trustee.

(3) Any banker or agent of the bankrupt or any other person who holds any property to the account of, or for, the bankrupt shall pay or deliver to the trustee all property in his possession or under his control which forms part of the bankrupt’s estate and which he is not by law entitled to retain as against the bankrupt or trustee.

(4) If any person without reasonable excuse fails to comply with any obligation imposed by this section, he is guilty of a contempt of court and liable to be punished accordingly (in addition to any other punishment to which he may be subject).

Modifications etc. (not altering text)

C1027 S. 312 applied with modifications by S.I. 1986/1999, art. 3, Sch. 1 Pt. II

C1028 S. 312 modified (1.12.1994) by S.I. 1994/2421, art. 11(2)(3), Sch. 7 para. 20

313 Charge on bankrupt’s home. E+W

(1) Where any property consisting of an interest in a dwelling house which is occupied by the bankrupt or by his spouse or former spouse [F820 or by his civil partner or former civil partner] is comprised in the bankrupt’s estate and the trustee is, for any reason, unable for the time being to realise that property, the trustee may apply to the court for an order imposing a charge on the property for the benefit of the bankrupt’s estate.

(2) If on an application under this section the court imposes a charge on any property, the benefit of that charge shall be comprised in the bankrupt’s estate and is enforceable [F821 , up to the charged value from time to time,] for the payment of any amount which is payable otherwise than to the bankrupt out of the estate and of interest on that amount at the prescribed rate.

[F822 (2A) In subsection (2) the charged value means—

(a) the amount specified in the charging order as the value of the bankrupt’s interest in the property at the date of the order, plus

(b) interest on that amount from the date of the charging order at the prescribed rate.

(2B) In determining the value of an interest for the purposes of this section the court shall disregard any matter which it is required to disregard by the rules.]

(3) An order under this section made in respect of property vested in the trustee shall provide, in accordance with the rules, for the property to cease to be comprised in the bankrupt’s estate and, subject to the charge (and any prior charge), to vest in the bankrupt.

(4) [F823 Subsection (1), (2), (4), (5) and (6) of] section 3 of the Charging Orders Act 1979 (supplemental provisions with respect to charging orders) have effect in relation to orders under this section as in relation to charging orders under that Act.

[F824 (5) But an order under section 3(5) of that Act may not vary a charged value.]

Textual Amendments

F820 Words in s. 313(1) inserted (5.12.2005) by Civil Partnership Act 2004 (c. 33), ss. 261(1), 263, Sch. 27 para. 114; S.I. 2005/3175, art. 2(2) (subject to art. 2(3)-(5))

F821 Words in s. 313(2) substituted (1.4.2004) by 2002 c. 40, ss. 261(2)(a), 279 (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))

F822 S. 313(2A)(2B) inserted (1.4.2004) by 2002 c. 40, ss. 261(2)(b), 279 (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))

F823 Words in s. 313(4) substituted (1.10.2012) by Tribunals, Courts and Enforcement Act 2007 (c. 15), s. 93(5)(6)148; S.I. 2012/1312, art. 3

F824 S. 313(5) inserted (1.4.2004) by 2002 c. 40, ss. 261(2)(c), 279 (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))

Modifications etc. (not altering text)

C1029 S. 313 applied (with modifications) by S.I. 1986/1999, art. 3, Sch. 1 Pt. II

[F825 313A Low value home: application for sale, possession or charge E+W

(1) This section applies where—

(a) property comprised in the bankrupt’s estate consists of an interest in a dwelling-house which at the date of the bankruptcy was the sole or principal residence of—

(i) the bankrupt,

(ii) the bankrupt’s spouse [F826 or civil partner], or

(iii) a former spouse [F827 or former civil partner] of the bankrupt, and

(b) the trustee applies for an order for the sale of the property, for an order for possession of the property or for an order under section 313 in respect of the property.

(2) The court shall dismiss the application if the value of the interest is below the amount prescribed for the purposes of this subsection.

(3) In determining the value of an interest for the purposes of this section the court shall disregard any matter which it is required to disregard by the order which prescribes the amount for the purposes of subsection (2).]

Textual Amendments

F825 S. 313A inserted (1.4.2004) by 2002 c. 40, ss. 261(3), 279 (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))

F826 Words in s. 313A(1)(a)(ii) inserted (5.12.2005) by Civil Partnership Act 2004 (c. 33), ss. 261(1), 263, Sch. 27 para. 115(a); S.I. 2005/3175, art. 2(2) (subject to art. 2(3)-(5))

F827 Words in s. 313A(1)(a)(iii) inserted (5.12.2005) by Civil Partnership Act 2004 (c. 33), ss. 261(1), 263, Sch. 27 para. 115(b); S.I. 2005/3175, art. 2(2) (subject to art. 2(3)-(5))

Modifications etc. (not altering text)

C1030 S. 313A modified (1.7.2005) by S.I. 1994/2421, Sch. 4 Pt. II para. 29A (as inserted (1.7.2005) by S.I. 2005/1516, art. 9(5))

S. 313A modified (1.7.2005) by S.I. 1994/2421, Sch. 7 para. 20A (as inserted (1.7.2005) by S.I. 2005/1516, art. 10(5))

314 Powers of trustee. E+W

[F828 (1) The trustee may exercise any of the powers specified in Parts 1 and 2 of Schedule 5.]

(2) F829 ... the trustee may appoint the bankrupt—

(a) to superintend the management of his estate or any part of it,

(b) to carry on his business (if any) for the benefit of his creditors, or

(c) in any other respect to assist in administering the estate in such manner and on such terms as the trustee may direct.

F830 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F830 (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) Part III of Schedule 5 to this Act has effect with respect to the things which the trustee is able to do for the purposes of, or in connection with, the exercise of any of his powers under any of his Group of Parts.

(6) Where the trustee (not being the official receiver) in exercise of the powers conferred on him by any provision in this Group of Parts—

(a) disposes of any property comprised in the bankrupt’s estate to an associate of the bankrupt, or

(b) employs a solicitor,

he shall, if there is for the time being a creditor’s committee, give notice to the committee of that exercise of his powers.

(7) Without prejudice to the generality of subsection (5) and Part III of Schedule 5, the trustee may, if he thinks fit, at any time [F831 seek a decision on a matter from] the bankrupt’s creditors.

Subject to the preceding provisions in this Group of Parts, he shall [F832 seek a decision on a matter] if he is requested to do so by a creditor of the bankrupt and the request is made with the concurrence of not less than one-tenth, in value, of the bankrupt’s creditors (including the creditor making the request).

(8) Nothing in this Act is to be construed as restricting the capacity of the trustee to exercise any of his powers outside England and Wales.

Textual Amendments

F828 S. 314(1) substituted (26.5.2015) by Small Business, Enterprise and Employment Act 2015 (c. 26), ss. 121(2)(a), 164(3)(i)(i)

F829 Words in s. 314(2) omitted (26.5.2015) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), ss. 121(2)(b), 164(3)(i)(i)

F830 S. 314(3)(4) omitted (26.5.2015) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), ss. 121(2)(c), 164(3)(i)(i)

F831 Words in s. 314(7) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 81(a); S.I. 2015/1329, reg. 3(d)

F832 Words in s. 314(7) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 81(b); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

Modifications etc. (not altering text)

C1031 S. 314 applied with modifications by S.I. 1986/1999, art. 3, Sch. 1 Pt. II

C1032 S. 314(7) applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 8(3)(9), Sch. 4 Pt. II para. 20

Disclaimer of onerous property E+W

315 Disclaimer (general power). E+W

(1) Subject as follows, the trustee may, by the giving of the prescribed notice, disclaim any onerous property and may do so notwithstanding that he has taken possession of it, endeavoured to sell it or otherwise exercised rights of ownership in relation to it.

(2) The following is onerous property for the purposes of this section, that is to say—

(a) any unprofitable contract, and

(b) any other property comprised in the bankrupt’s estate which is unsaleable or not readily saleable, or is such that it may give rise to a liability to pay money or perform any other onerous act.

(3) A disclaimer under this section—

(a) operates so as to determine, as from the date of the disclaimer, the rights, interests and liabilities of the bankrupt and his estate in or in respect of the property disclaimed, and

(b) discharges the trustee from all personal liability in respect of that property as from the commencement of his trusteeship,

but does not, except so far as is necessary for the purpose of releasing the bankrupt, the bankrupt’s estate and the trustee from any liability, affect the rights or liabilities of any other person.

(4) A notice of disclaimer shall not be given under this section in respect of any property that has been claimed for the estate under section 307 (after-acquired property) or 308 (personal property of bankrupt exceeding reasonable replacement value) [F833 or 308A], except with the leave of the court.

(5) Any person sustaining loss or damage in consequence of the operation of a disclaimer under this section is deemed to be a creditor of the bankrupt to the extent of the loss or damage and accordingly may prove for the loss or damage as a bankruptcy debt.

Textual Amendments

F833 Words inserted by Housing Act 1988 (c. 50, SIF 75:1), s. 117(4)

Modifications etc. (not altering text)

C1033 S.315, applied with modifications by S.I. 1986/1999, art. 3, Sch. 1 Pt. II

C1034 S. 315 excluded (25.4.1991) by Companies Act 1989 (c. 40), ss. 154, 155, 164(1), 182(4), Sch. 22 para. 7(1); S.I. 1991/878, art. 2, Sch. .

C1035 S. 315 restricted (1.1.1996) by 1995 c. 30, s. 21(2)(b) (with ss. 1(1), 2(2), 26(1)); S.I. 1995/2963, art. 2

S. 315 excluded (11.12.1999) by S.I. 1999/2979, reg. 16(1)

316 Notice requiring trustee’s decision. E+W

(1) Notice of disclaimer shall not be given under section 315 in respect of any property if—

(a) a person interested in the property has applied in writing to the trustee or one of his predecessors as trustee requiring the trustee or that predecessor to decide whether he will disclaim or not, and

(b) the period of 28 days beginning with the day on which that application was made has expired without a notice of disclaimer having been given under section 315 in respect of that property.

(2) The trustee is deemed to have adopted any contract which by virtue of this section he is not entitled to disclaim.

Modifications etc. (not altering text)

C1036 S. 316 applied with modifications by S.I. 1986/1999, art. 3, Sch. 1 Pt. II

317 Disclaimer of leaseholds. E+W

(1) The disclaimer of any property of a leasehold nature does not take effect unless a copy of the disclaimer has been served (so far as the trustee is aware of their addresses) on every person claiming under the bankrupt as underlessee or mortgagee and either—

(a) no application under section 320 below is made with respect to the property before the end of the period of 14 days beginning with the day on which the last notice served under this subsection was served, or

(b) where such an application has been made, the court directs that the disclaimer is to take effect.

(2) Where the court gives a direction under subsection (1)(b) it may also, instead of or in addition to any order it makes under section 320, make such orders with respect to fixtures, tenant’s improvements and other matters arising out of the lease as it thinks fit.

Modifications etc. (not altering text)

C1037 S.317 applied with modifications by S.I. 1986/1999, art. 3, Sch. 1 Pt. II

C1038 S. 317 modified (29.9.2008 at 8.00 a.m.) by The Bradford & Bingley plc Transfer of Securities and Property etc. Order 2008 (S.I. 2008/2546), art. 13, Sch. 1 para. 1(c)

318 Disclaimer of dwelling house. E+W

Without prejudice to section 317, the disclaimer of any property in a dwelling house does not take effect unless a copy of the disclaimer has been served (so far as the trustee is aware of their addresses) on every person in occupation of or claiming a right to occupy the dwelling house and either—

(a) no application under section 320 is made with respect to the property before the end of the period of 14 days beginning with the day on which the last notice served under this section was served, or

(b) where such an application has been made, the court directs that the disclaimer is to take effect.

Modifications etc. (not altering text)

C1039 S.318 applied with modifications by S.I. 1986/1999, art. 3, Sch. 1 Pt. II

319 Disclaimer of land subject to rentcharge. E+W

(1) The following applies where, in consequence of the disclaimer under section 315 of any land subject to a rentcharge, that land vests by operation of law in the Crown or any other person (referred to in the next subsection as “the proprietor”).

(2) The proprietor, and the successors in title of the proprietor, are not subject to any personal liability in respect of any sums becoming due under the rentcharge, except sums becoming due after the proprietor, or some person claiming under or through the proprietor, has taken possession or control of the land or has entered into occupation of it.

Modifications etc. (not altering text)

C1040 s. 319 applied with modifications by S.I. 1986/1999, art. 3, Sch. 1 Pt. II

320 Court order vesting disclaimed property. E+W

(1) This section and the next apply where the trustee has disclaimed property under section 315.

(2) An application may be made to the court under this section by—

(a) any person who claims an interest in the disclaimed property,

(b) any person who is under any liability in respect of the disclaimed property, not being a liability discharged by the disclaimer, or

(c) where the disclaimed property is property in a dwelling house, any person who at the time when the [F834 bankruptcy application was made or (as the case may be) the] bankruptcy petition was presented was in occupation of or entitled to occupy the dwelling house.

(3) Subject as follows in this section and the next, the court may, on an application under this section, make an order on such terms as it thinks fit for the vesting of the disclaimed property in, or for its delivery to—

(a) a person entitled to it or a trustee for such a person,

(b) a person subject to such a liability as is mentioned in subsection (2)(b) or a trustee for such a person, or

(c) where the disclaimed property is property in a dwelling house, any person who at the time when the [F835 bankruptcy application was made or (as the case may be) the] bankruptcy petition was presented was in occupation of or entitled to occupy the dwelling house.

(4) The court shall not make an order by virtue of subsection (3)(b) except where it appears to the court that it would be just to do so for the purpose of compensating the person subject to the liability in respect of the disclaimer.

(5) The effect of any order under this section shall be taken into account in assessing for the purposes of section 315(5) the extent of any loss or damage sustained by any person in consequence of the disclaimer.

(6) An order under this section vesting property in any person need not be completed by any conveyance, assignment or transfer.

Textual Amendments

F834 Words in s. 320(2)(c) inserted (6.4.2016) by Enterprise and Regulatory Reform Act 2013 (c. 24), s. 103(3), Sch. 19 para. 25(2); S.I. 2016/191, art. 2 (with art. 3)

F835 Words in s. 320(3)(c) inserted (6.4.2016) by Enterprise and Regulatory Reform Act 2013 (c. 24), s. 103(3), Sch. 19 para. 25(3); S.I. 2016/191, art. 2 (with art. 3)

Modifications etc. (not altering text)

C1041 S. 320 applied with modifications by S.I. 1986/1999, art. 3, Sch. 1 Pt. II

321 Order under s. 320 in respect of leaseholds. E+W

(1) The court shall not make an order under section 320 vesting property of a leasehold nature in any person, except on terms making that person—

(a) subject to the same liabilities and obligations as the bankrupt was subject to under the lease on the day the [F836 bankruptcy application was made or (as the case may be) the] bankruptcy petition was presented, or

(b) if the court thinks fit, subject to the same liabilities and obligations as that person would be subject to if the lease had been assigned to him on that day.

(2) For the purposes of an order under section 320 relating to only part of any property comprised in a lease, the requirements of subsection (1) apply as if the lease comprised only the property to which the order relates.

(3) Where subsection (1) applies and no person is willing to accept an order under section 320 on the terms required by that subsection, the court may (by order under section 320) vest the estate or interest in the bankrupt in the property in any person who is liable (whether personally or in a representative capacity and whether alone or jointly with the bankrupt) to perform the lessee’s covenants in the lease.

The court may by virtue of this subsection vest that estate and interest in such a person freed and discharged from all estates, incumbrances and interests created by the bankrupt.

(4) Where subsection (1) applies and a person declines to accept any order under section 320, that person shall be excluded from all interest in the property.

Textual Amendments

F836 Words in s. 321(1)(a) inserted (6.4.2016) by Enterprise and Regulatory Reform Act 2013 (c. 24), s. 103(3), Sch. 19 para. 26; S.I. 2016/191, art. 2 (with art. 3)

Modifications etc. (not altering text)

C1042 S. 321 applied with modifications by S.I. 1986/1999, art. 3, Sch. 1 Pt. II

Distribution of bankrupt’s estate E+W

322 Proof of debts. E+W

(1) Subject to this section and the next, the proof of any bankruptcy debt by a secured or unsecured creditor of the bankrupt and the admission or rejection of any proof shall take place in accordance with the rules.

(2) Where a bankruptcy debt bears interest, that interest is provable as part of the debt except in so far as it is payable in respect of any period after the commencement of the bankruptcy.

(3) The trustee shall estimate the value of any bankruptcy debt which, by reason of its being subject to any contingency or contingencies or for any other reason, does not bear a certain value.

(4) Where the value of a bankruptcy debt is estimated by the trustee under subsection (3) or, by virtue of section 303 in Chapter III, by the court, the amount provable in the bankruptcy in respect of the debt is the amount of the estimate.

Modifications etc. (not altering text)

C1043 S.322 applied with modifications by S.I. 1986/1999, art. 3, Sch. 1 Pt. II

323 Mutual credit and set-off. E+W

(1) This section applies where before the commencement of the bankruptcy there have been mutual credits, mutual debts or other mutual dealings between the bankruptcy and any creditor of the bankrupt proving or claiming to prove for a bankruptcy debt.

(2) An account shall be taken of what is due from each party to the other in respect of the mutual dealings and the sums due from one party shall be set off against the sums due from the other.

(3) Sums due from the bankrupt to another party shall not be included in the account taken under subsection (2) if that other party had notice at the time they became due that [F837 proceedings on a bankruptcy application relating to the bankrupt were ongoing or that ] a bankruptcy petition relating to the bankrupt was pending.

(4) Only the balance (if any) of the account taken under subsection (2) is provable as a bankruptcy debt or, as the case may be, to be paid to the trustee as part of the bankrupt’s estate.

Textual Amendments

F837 Words in s. 323(3) inserted (6.4.2016) by Enterprise and Regulatory Reform Act 2013 (c. 24), s. 103(3), Sch. 19 para. 27; S.I. 2016/191, art. 2 (with art. 3)

Modifications etc. (not altering text)

C1044 S.323 applied with modifications by S.I. 1986/1999, art. 3, Sch. 1 Pt. II

C1045 S. 323 modified (25.4.1991) by Companies Act 1989 (c. 40), ss. 154, 155, 163(2)(b), 182(4),Sch. 22 para. 6(2)(b); S.I. 1991/878, art. 2, Sch..

324 Distribution by means of dividend. E+W

(1) Whenever the trustee has sufficient funds in hand for the purpose he shall, subject to the retention of such sums as may be necessary for the expenses of the bankruptcy, declare and distribute dividends among the creditors in respect of the bankruptcy debts which they have respectively proved.

(2) The trustee shall give notice of his intention to declare and distribute a dividend.

(3) Where the trustee has declared a dividend, he shall give notice of the dividend and of how it is proposed to distribute it; and a notice given under this subsection shall contain the prescribed particulars of the bankrupt’s estate.

(4) In the calculation and distribution of a dividend the trustee shall make provision—

(a) for any bankruptcy debts which appear to him to be due to persons who, by reason of the distance of their place of residence, may not have had sufficient time to tender and establish their proofs,

(b) for any bankruptcy debts which are the subject of claims which have not yet been determined, and

(c) for disputed proofs and claims.

Modifications etc. (not altering text)

C1046 S. 324 applied with modifications by S.I. 1986/1999, art. 3, Sch. 1 Pt. II

325 Claims by unsatisfied creditors. E+W

(1) A creditor who has not proved his debt before the declaration of any dividend is not entitled to disturb, by reason that he has not participated in it, the distribution of that dividend or any other dividend declared before his debt was proved, but—

(a) when he has proved that debt he is entitled to be paid, out of any money for the time being available for the payment of any further dividend, any dividend or dividends which he has failed to receive; and

(b) any dividend or dividends payable under paragraph (a) shall be paid before that money is applied to the payment of any such further dividend.

(2) No action lies against the trustee for a dividend,but if the trustee refuses to pay a dividend the court may, if it thinks fit, order him to pay it and also to pay, out of his own money—

(a) interest on the dividend, at the rate for the time being specified in section 17 of the M22 JudgmentsAct 1838, from the time it was withheld, and

(b) the costs of the proceedings in which the order to pay is made.

Modifications etc. (not altering text)

C1047 s. 325 applied with modifications by S.I. 1986/1999, art. 3, Sch. 1 Pt. II

Marginal Citations

M22 1838 c. 110.

326 Distribution of property in specie. E+W

(1) Without prejudice to sections 315 to 319 (disclaimer), the trustee may, with the permission of the creditors’ committee, divide in its existing form amongst the bankrupt’s creditors, according to its estimated value, any property which from its peculiar nature or other special circumstances cannot be readily or advantageously sold.

(2) A permission given for the purposes of subsection (1) shall not be a general permission but shall relate to a particular proposed exercise of the power in question; and a person dealing with the trustee in good faith and for value is not to be concerned to enquire whether any permission required by subsection (1) has been given.

(3) Where the trustee has done anything without the permission required by subsection (1), the court or the creditors’ committee may, for the purpose of enabling him to meet his expenses out of the bankrupt’s estate, ratify what the trustee has done.

But the committee shall not do so unless it is satisfied that the trustee acted in a case of urgency and has sought its ratification without undue delay.

Modifications etc. (not altering text)

C1048 S. 326 applied with modifications by S.I. 1986/1999, art. 3, Sch. 1 Pt. II

[F838 327 Distribution in criminal bankruptcy. E+W

Where the bankruptcy order was made on a petition under section 264(1)(d) (criminal bankruptcy), no distribution shall be made under sections 324 to 326 so long as an appeal is pending (within the meaning of section 277) against the bankrupt’s conviction of any offence by virtue of which the criminal bankruptcy order on which the petition was based was made.]

Textual Amendments

F838 S. 327 repealed (prosp.) by Criminal Justice Act 1988 (c. 33, SIF 39:1), ss. 123, 170, 171, Sch. 8 para. 16, Sch. 16

Modifications etc. (not altering text)

C1049 S.327 applied with modifications by S.I. 1986/1999, art. 3, Sch. 1 Pt. II

328 Priority of debts. E+W

(1) In the distribution of the bankrupt’s estate, his preferential debts F839 ... shall be paid in priority to other debts.

[F840 (1A) Ordinary preferential debts rank equally among themselves after the expenses of the bankruptcy and shall be paid in full, unless the bankrupt’s estate is insufficient to meet them, in which case they abate in equal proportions between themselves.

(1B) Secondary preferential debts rank equally among themselves after the ordinary preferential debts and shall be paid in full, unless the bankrupt’s estate is insufficient to meet them, in which case they abate in equal proportions between themselves.]

F841 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) Debts which are neither preferential debts nor debts to which the next section applies also rank equally between themselves and, after the preferential debts, shall be paid in full unless the bankrupt’s estate is insufficient for meeting them, in which case they abate in equal proportions between themselves.

[F842 (3A) If the bankrupt is a relevant financial institution, subsection (3) does not apply but—

(a) the bankrupt’s ordinary non-preferential debts shall be paid in priority to the bankrupt’s secondary non-preferential debts,

(b) the bankrupt’s ordinary non-preferential debts rank equally among themselves after the secondary preferential debts and shall be paid in full, unless the bankrupt’s estate is insufficient to meet them, in which case they abate in equal proportions,

(c) the bankrupt’s secondary non-preferential debts shall be paid in priority to the bankrupt’s tertiary non-preferential debts, and

(d) the bankrupt’s secondary non-preferential debts rank equally among themselves after the ordinary non-preferential debts and shall be paid in full, unless the bankrupt’s estate is insufficient to meet them, in which case they abate in equal proportions.

See section 387A for definitions relevant to this subsection.]

(4) Any surplus remaining after the payment of the debts [F843 —

(a) where subsection (3) applies, that are preferential or rank equally under that subsection, or

(b) where subsection (3A) applies, that are preferential or are referred to in that subsection,]

shall be applied in paying interest on those debts in respect of the periods during which they have been outstanding since the commencement of the bankruptcy; and interest on preferential debts ranks equally with interest on debts other than preferential debts.

(5) The rate of interest payable under subsection (4) in respect of any debt is whichever is the greater of the following—

(a) the rate specified in section 17 of the M23 Judgments Act 1838 at the commencement of the bankruptcy, and

(b) the rate applicable to that debt apart from the bankruptcy.

(6) This section and the next are without prejudice to any provision of this Act or any other Act under which the payment of any debt or the making of any other payment is, in the event of bankruptcy, to have a particular priority or to be postponed.

[F844 (7) In this section “preferential debts”, “ordinary preferential debts” and “secondary preferential debts” each has the meaning given in section 386 in Part 12.]

Textual Amendments

F839 Words in s. 328(1) omitted (1.1.2015) by virtue of The Banks and Building Societies (Depositor Preference and Priorities) Order 2014 (S.I. 2014/3486), arts. 1(2), 7(2) (with art. 3)

F840 S. 328(1A)(1B) inserted (1.1.2015) by The Banks and Building Societies (Depositor Preference and Priorities) Order 2014 (S.I. 2014/3486), arts. 1(2), 7(3) (with art. 3)

F841 S. 328(2) omitted (1.1.2015) by virtue of The Banks and Building Societies (Depositor Preference and Priorities) Order 2014 (S.I. 2014/3486), arts. 1(2), 7(4) (with art. 3)

F842 S. 328(3A) inserted (19.12.2018) by The Banks and Building Societies (Priorities on Insolvency) Order 2018 (S.I. 2018/1244), arts. 1(2), 8(2) (with art. 3)

F843 S. 328(4)(a)(b) substituted for words (19.12.2018) by The Banks and Building Societies (Priorities on Insolvency) Order 2018 (S.I. 2018/1244), arts. 1(2), 8(3) (with art. 3)

F844 S. 328(7) inserted (1.1.2015) by The Banks and Building Societies (Depositor Preference and Priorities) Order 2014 (S.I. 2014/3486), arts. 1(2), 7(5) (with art. 3)

Modifications etc. (not altering text)

C1050 S. 328 applied (with modifications) by S.I. 1986/1999, art. 3, Sch. 1 Pt. II

C1051 S. 328 excluded (10.8.2005) by The Insurers (Reorganisation and Winding Up) Regulations 2004 (S.I. 2004/353), reg. 20 (as amended (10.8.2005) by S.I. 2005/1998, regs. 2(3), 40(1)-(5))

C1052 S. 328 modified (1.12.1994) by S.I. 1994/2421, art. 11(2)(3), Sch. 7 para. 21 (as amended (8.12.2017) by The Insolvency (Miscellaneous Amendments) Regulations 2017 (S.I. 2017/1119), reg. 1(1), Sch. 2 para. 7(4); and (19.12.2018) by The Banks and Building Societies (Priorities on Insolvency) Order 2018 (S.I. 2018/1244), arts. 1(2), 21 (with art. 3); and (28.12.2020) (temp.) by The Bank Recovery and Resolution (Amendment) (EU Exit) Regulations 2020 (S.I. 2020/1350), regs. 1(4), 121(5))

C1053 S. 328 modified (28.12.2020 until IP completion day when the amending provision ceases to have effect in accordance with reg. 1(4) of the amending S.I.) by The Bank Recovery and Resolution (Amendment) (EU Exit) Regulations 2020 (S.I. 2020/1350), regs. 1(4), 112 (with reg. 108)

C1054 S. 328(1)-(3)(6) modified (1.12.1994) by S.I. 1994/2421, art. 8, Sch. 4 Pt. II para. 23

C1055 S. 328(1)(2) applied (11.12.1999) by S.I. 1999/2979, reg. 14(5)

C1056 S. 328(4)(5) applied (with modifications) (1.12.1994) by S.I. 1994/2421, arts. 8(3)(9), 10(6), Sch. 4 Pt. II para. 24

Marginal Citations

M23 1838 c. 110.

329 Debts to spouse. E+W

(1) This section applies to bankruptcy debts owed in respect of credit provided by a person who (whether or not the bankrupt’s spouse [F845 or civil partner] at the time the credit was provided) was the bankrupt’s spouse [F845 or civil partner] at the commencement of the bankruptcy.

(2) Such debts—

(a) rank in priority after the F846 ... interest required to be paid in pursuance of section [F847 328(4)], and

(b) are payable with interest at the rate specified in section 328(5) in respect of the period during which they have been outstanding since the commencement of the bankruptcy;

and the interest payable under paragraph (b) has the same priority as the debts on which it is payable.

Textual Amendments

F845 Words in s. 329(1) inserted (5.12.2005) by Civil Partnership Act 2004 (c. 33), ss. 261(1), 263, Sch. 27 para. 116; S.I. 2005/3175, art. 2(2) (subject to art. 2(3)-(5))

F846 Words in s. 329(2)(a) omitted (19.12.2018) by virtue of The Banks and Building Societies (Priorities on Insolvency) Order 2018 (S.I. 2018/1244), arts. 1(2), 9(a) (with art. 3)

F847 Word in s. 329(2)(a) substituted (19.12.2018) by The Banks and Building Societies (Priorities on Insolvency) Order 2018 (S.I. 2018/1244), arts. 1(2), 9(b) (with art. 3)

Modifications etc. (not altering text)

C1057 S. 329 applied (with modifications) by S.I. 1986/1999, art. 3, Sch. 1 Pt. II

330 Final distribution. E+W

(1) When the trustee has realised all the bankrupt’s estate or so much of it as can, in the trustee’s opinion, be realised without needlessly protracting the trusteeship, he shall give notice in the prescribed manner either—

(a) of his intention to declare a final dividend, or

(b) that no dividend, or further dividend, will be declared.

[F848 (1A) A notice under subsection (1)(b) need not be given to opted-out creditors.]

(2) The notice under subsection (1) shall contain the prescribed particulars and shall require claims against the bankrupt’s estate to be established by a date (“the final date”) specified in the notice.

(3) The court may, on the application of any person, postpone the final date.

(4) After the final date, the trustee shall—

(a) defray any outstanding expenses of the bankruptcy out of the bankrupt’s estate, and

(b) if he intends to declare a final dividend, declare and distribute that dividend without regard to the claim of any person in respect of a debt not already proved in the bankruptcy.

(5) If a surplus remains after payment in full and with interest of all the bankrupt’s creditors and the payment of the expenses of the bankruptcy, the bankrupt is entitled to the surplus.

F849 (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F848 S. 330(1A) inserted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 82; S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

F849 S. 330(6) omitted (31.12.2020) by virtue of The Insolvency (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/146), reg. 1(3), Sch. para. 34 (with regs. 4, 5); 2020 c. 1, Sch. 5 para. 1(1)

Modifications etc. (not altering text)

C1058 S. 330 applied with modifications by S.I. 1986/1999, art. 3, Sch. 1 Pt. II (as amended (31.5.2002) by S.I. 2002/1309, art. 3(3)(4))

C1059 S. 330(4)(b) modified by S.I. 1986/1999 art. 5, Sch. 2 (as amended (6.4.2016) by The Enterprise and Regulatory Reform Act 2013 (Consequential Amendments) (Bankruptcy) and the Small Business, Enterprise and Employment Act 2015 (Consequential Amendments) Regulations 2016 (S.I. 2016/481), reg. 1, Sch. 2 para. 2(8)(c))

331 Final [F850 report]. E+W

(1) Subject as follows in this section and the next, this section applies where—

(a) it appears to the trustee that the administration of the bankrupt’s estate in accordance with this Chapter is for practical purposes complete, and

(b) the trustee is not the official receiver.

[F851 (2) The trustee must give the bankrupt's creditors (other than opted-out creditors) notice that it appears to the trustee that the administration of the bankrupt's estate is for practical purposes complete.

(2A) The notice must—

(a) be accompanied by a report of the trustee's administration of the bankrupt's estate;

(b) explain the effect of section 299(3)(d) and how the creditors may object to the trustee's release.]

F852 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F852 (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F850 Word in s. 331 heading substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 83(4); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

F851 S. 331(2)(2A) substituted for s. 331(2) (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 83(2); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

F852 S. 331(3)(4) omitted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 83(3); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

Modifications etc. (not altering text)

C1060 S. 331 applied with modifications by S.I. 1986/1999, art. 3, Sch. 1 Pt. II

S. 331 applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 10(6), Sch. 4 Pt. II para. 18

C1061 S. 331 modified (1.12.1994) by S.I. 1994/2421, art. 11(2)(3), Sch. 7 para. 22

332 Saving for bankrupt’s home. E+W

(1) This section applies where—

(a) there is comprised in the bankrupt’s estate property consisting of an interest in a dwelling house which is occupied by the bankrupt or by his spouse or former spouse [F853 or by his civil partner or former civil partner], and

(b) the trustee has been unable for any reason to realise that property.

(2) The trustee shall not [F854 give notice under section 331(2)] unless either—

(a) the court has made an order under section 313 imposing a charge on that property for the benefit of the bankrupt’s estate, or

(b) the court has declined, on an application under that section, to make such an order, or

(c) the Secretary of State has issued a certificate to the trustee stating that it would be inappropriate or inexpedient for such an application to be made in the case in question.

Textual Amendments

F853 Words in s. 332(1) inserted (5.12.2005) by Civil Partnership Act 2004 (c. 33), ss. 261(1), 263, Sch. 27 para. 117; S.I. 2005/3175, art. 2(2) (subject to art. 2(3)-(5))

F854 Word in s. 332(2) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 84; S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

Modifications etc. (not altering text)

C1062 S. 332 applied (with modifications) by S.I. 1986/1999, art. 3, Sch. 1 Pt. II

Supplemental E+W

333 Duties of bankrupt in relation to trustee. E+W

(1) The bankrupt shall—

(a) give to the trustee such information as to his affairs,

(b) attend on the trustee at such times, and

(c) do all such other things,

as the trustee may for the purposes of carrying out his functions under any of this Group of Parts reasonably require.

(2) Where at any time after the commencement of the bankruptcy any property is acquired by, or devolves upon, the bankrupt or there is an increase of the bankrupt’s income, the bankrupt shall, within the prescribed period, give the trustee notice of the property or, as the case may be, of the increase.

(3) Subsection (1) applies to a bankrupt after his discharge.

(4) If the bankrupt without reasonable excuse fails to comply with any obligation imposed by this section, he is guilty of a contempt of court and liable to be punished accordingly (in addition to any other punishment to which he may be subject).

Modifications etc. (not altering text)

C1063 S. 333 applied with modifications by S.I. 1986/1999, art. 3, Sch. 1 Pt. II

334 Stay of distribution in case of second bankruptcy. E+W

(1) This section and the next apply where a bankruptcy order is made against an undischarged bankrupt; and in both sections—

(a) “the later bankruptcy” means the bankruptcy arising from that order,

(b) “the earlier bankruptcy” means the bankruptcy (or, as the case may be, most recent bankruptcy) from which the bankrupt has not been discharged at the commencement of the later bankruptcy, and

(c) “the existing trustee” means the trustee (if any) of the bankrupt’s estate for the purposes of the earlier bankruptcy.

(2) Where the existing trustee has been given the prescribed notice of the [F855 making of the application or (as the case may be) the] presentation of the petition of the later bankruptcy, any distribution or other disposition by him of anything to which the next subsection applies, if made after the giving of the notice, is void except to the extent that it was made with the consent of the court or is or was subsequently ratified by the court.

This is without prejudice to section 284 (restrictions on dispositions of property following bankruptcy order).

(3) This subsection applies to—

(a) any property which is vested in the existing trustee under section 307(3) (after-acquired property);

(b) any money paid to the existing trustee in pursuance of an income payments order under section 310; and

(c) any property or money, which is, or in the hands of the existing trustee represents, the proceeds of sale or application of property or money falling within paragraph (a) or (b) of this subsection.

Textual Amendments

F855 Words in s. 334(2) inserted (6.4.2016) by Enterprise and Regulatory Reform Act 2013 (c. 24), s. 103(3), Sch. 19 para. 28; S.I. 2016/191, art. 2 (with art. 3)

Modifications etc. (not altering text)

C1064 S. 334 applied with modifications by S.I. 1986/1999, art. 3, Sch. 1 Pt. II

335 Adjustment between earlier and later bankruptcy estates. E+W

(1) With effect from the commencement of the later bankruptcy anthing to which section 334(3) applies which, immediately before the commencement of that bankruptcy, is comprised in the bankrupt’s estate for the purposes of the earlier bankruptcy is to be treated as comprised in the bankrupt’s estate for the purposes of the later bankruptcy and, until there is a trustee of that estate, is to be dealt with by the existing trustee in accordance with the rules.

(2) Any sums which in pursuance of an income payments order under section 310 are payable after the commencement of the later bankruptcy to the existing trustee shall form part of the bankrupt’s estate for the purposes of the later bankruptcy; and the court may give such consequential directions for the modification of the order as it thinks fit.

(3) Anything comprised in a bankrupt’s estate by virtue of subsection (1) or (2) is so comprised subject to a first charge in favour of the existing trustee for any bankruptcy expenses incurred by him in relation thereto.

(4) Except as provided above and in section 334, property which is, or by virtue of section 308 (personal property of bankrupt exceeding reasonable replacement value) [F856 or section 308A (vesting in trustee of certain tenancies)] is capable of being, comprised in the bankrupt’s estate for the purposes of the earlier bankruptcy, or of any bankruptcy prior to it, shall not be comprised in his estate for the purposes of the later bankruptcy.

(5) The creditors of the bankrupt in the earlier bankruptcy and the creditors of the bankrupt in any bankruptcy prior to the earlier one, are not to be creditors of his in the later bankruptcy in respect of the same debts; but the existing trustee may prove in the later bankruptcy for—

(a) the unsatisfied balance of the debts (including any debt under this subsection) provable against the bankrupt’s estate in the earlier bankruptcy;

(b) any interest payable on that balance; and

(c) any unpaid expenses of the earlier bankruptcy.

(6) Any amount provable under subsection (5) ranks in priority after all the other debts provable in the later bankruptcy and after interest on those debts and, accordingly, shall not be paid unless those debts and that interest have first been paid in full.

Textual Amendments

F856 Words inserted by Housing Act 1988 (c. 50, SIF 61, 75:1), s. 140(1), Sch. 17 Pt. I para. 74

Modifications etc. (not altering text)

C1065 S. 335 applied with modifications by S.I. 1986/1999, art. 3, Sch. 1 Pt. II

Chapter V E+W Effect of Bankruptcy on Certain Rights Transacttions, Etc.

[F857 Rights under trusts of land E+W

Textual Amendments

F857 S. 335A and preceding cross-heading inserted (1.1.1997) by 1996 c. 47, s. 25(1), Sch. 3 para. 23 (with ss. 24(2), 25(4)); S.I. 1996/2974, art. 2

F858 335A Rights under trusts of land. E+W

(1) Any application by a trustee of a bankrupt’s estate under section 14 of the Trusts of Land and Appointment of Trustees Act 1996 (powers of court in relation to trusts of land) for an order under that section for the sale of land shall be made to the court having jurisdiction in relation to the bankruptcy.

(2) On such an application the court shall make such order as it thinks just and reasonable having regard to—

(a) the interests of the bankrupt’s creditors;

(b) where the application is made in respect of land which includes a dwelling house which is or has been the home of the bankrupt or the [F859 bankrupt’s spouse or civil partner or former spouse or former civil partner]—

(i) the conduct of the [F860 spouse, civil partner, former spouse or former civil partner], so far as contributing to the bankruptcy,

(ii) the needs and financial resources of the [F860 spouse, civil partner, former spouse or former civil partner], and

(iii) the needs of any children; and

(c) all the circumstances of the case other than the needs of the bankrupt.

(3) Where such an application is made after the end of the period of one year beginning with the first vesting under Chapter IV of this Part of the bankrupt’s estate in a trustee, the court shall assume, unless the circumstances of the case are exceptional, that the interests of the bankrupt’s creditors outweigh all other considerations.

(4) The powers conferred on the court by this section are exercisable on an application whether it is made before or after the commencement of this section.]

Textual Amendments

F858 S. 335A and preceding cross-heading inserted (1.1.1997) by 1996 c. 47, s. 25(1), Sch. 3 para. 23 (with ss. 24(2), 25(4)); S.I. 1996/2974, art. 2

F859 Words in s. 335A(2)(b) substituted (5.12.2005) by Civil Partnership Act 2004 (c. 33), ss. 261(1), 263, Sch. 27 para. 118(a); S.I. 2005/3175, art. 2(2) (subject to art. 2(3)-(5))

F860 Words in s. 335A(2)(b)(i)(ii) substituted (5.12.2005) by Civil Partnership Act 2004 (c. 33), ss. 261(1), 263, Sch. 27 para. 118(b); S.I. 2005/3175, art. 2(2) (subject to art. 2(3)-(5))

Rights of occupation E+W

336 Rights of occupation etc. of bankrupt’s spouse [F861 or civil partner]. E+W

(1) Nothing occurring in the initial period of the bankruptcy (that is to say, the period beginning with the day of the [F862 making of the bankruptcy application or (as the case may be) the presentation of the bankruptcy petition] and ending with the vesting of the bankrupt’s estate in a trustee) is to be taken as having given rise to any [F863 [F864 home rights] under Part IV of the Family Law Act 1996] in relation to a dwelling house comprised in the bankrupt’s estate.

(2) Where [F865 a spouse’s or civil partner’s home rights][F866 under the Act of 1996] are a charge on the estate or interest of the other spouse [F867 or civil partner], or of trustees for the other spouse [F867 or civil partner], and the other spouse [F867 or civil partner] is [F868 made] bankrupt—

(a) the charge continues to subsist notwithstanding the bankruptcy and, subject to the provisions of that Act, binds the trustee of the bankrupts’s estate and persons deriving title under the trustee, and

(b) any application for an order [F869 under section 33 of that Act] shall be made to the court having jurisdiction in relation to the bankruptcy.

F870 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) On such an application as is mentioned in subsection (2) F871 . . . the court shall make such order under [F872 section 33 of the Act of 1996]. . . as it thinks just and reasonable having regard to—

(a) the interests of the bankrupt’s creditors,

(b) the conduct of the spouse or former spouse [F873 or civil partner or former civil partner], so far as contributing to the bankruptcy,

(c) the needs and financial resources of the spouse or former spouse [F873 or civil partner or former civil partner],

(d) the needs of any children, and

(e) all the circumstances of the case other than the needs of the bankrupt.

(5) Where such an application is made after the end of the period of one year beginning with the first vesting under Chapter IV of this Part of the bankrupt’s estate in a trustee, the court shall assume, unless the circumstances of the case are exceptional, that the interests of the bankrupt’s creditors outweigh all other considerations.

Textual Amendments

F861 Words in heading to s. 336 inserted (5.12.2005) by Civil Partnership Act 2004 (c. 33), ss. 82, 263, Sch. 9 para. 21(5); S.I. 2005/3175, art. 2(1), Sch. 1

F862 Words in s. 336(1) substituted (6.4.2016) by Enterprise and Regulatory Reform Act 2013 (c. 24), s. 103(3), Sch. 19 para. 29(2); S.I. 2016/191, art. 2 (with art. 3)

F863 Words in s. 336(1) substituted (1.10.1997) by 1996 c. 27, s. 66(1), Sch. 8 Pt. III para. 57(2) (with Sch. 9 paras. 8-10); S.I. 1997/1892, art. 3(1)(b)

F864 Words in s. 336(1) substituted (5.12.2005) by Civil Partnership Act 2004 (c. 33), ss. 82, 263, Sch. 9 para. 21(2); S.I. 2005/3175, art. 2(1), Sch. 1

F865 Words in s. 336(2) substituted (5.12.2005) by Civil Partnership Act 2004 (c. 33), ss. 82, 263, Sch. 9 para. 21(3)(a); S.I. 2005/3175, art. 2(1), Sch. 1

F866 Words in s. 336(2) substituted (1.10.1997) by 1996 c. 27, s. 66(1), Sch. 8 Pt. III para. 57(3)(a) (with Sch. 9 paras. 8-10); S.I. 1997/1892, art. 3(1)(b)

F867 Words in s. 336(2) inserted (5.12.2005) by Civil Partnership Act 2004 (c. 33), ss. 82, 263, Sch. 9 para. 21(3)(b); S.I. 2005/3175, art. 2(1), Sch. 1

F868 Word in s. 336(2) substituted (6.4.2016) by Enterprise and Regulatory Reform Act 2013 (c. 24), s. 103(3), Sch. 19 para. 29(3); S.I. 2016/191, art. 2 (with art. 3)

F869 Words in s. 336(2)(b) substituted (1.10.1997) by 1996 c. 27, s. 66(1), Sch. 8 Pt. III para. 57(3)(b) (with Sch. 9 paras. 8-10); S.I. 1997/1892, art. 3(1)(b)

F870 S. 336(3) repealed (1.1.1997) by 1996 c. 47, s. 25(2), Sch. 4 (with ss. 24(2), 25(4)); S.I. 1996/2974, art. 2

F871 Words in s. 336(4) repealed (1.1.1997) by 1996 c. 47, s. 25(2), Sch. 4 (with ss. 24(2), 25(4)); S.I. 1996/2974, art. 2

F872 Words in s. 336(4) substituted (1.10.1997) by 1996 c. 27, s. 66(1), Sch. 8 Pt. III para. 57(4) (with Sch. 9 paras. 8-10); S.I. 1997/1892, art. 3(1)(b)

F873 Words in s. 336(4)(b)(c) inserted (5.12.2005) by Civil Partnership Act 2004 (c. 33), ss. 82, 263, Sch. 9 para. 21(4); S.I. 2005/3175, art. 2(1), Sch. 1

337 Rights of occupation of bankrupt. E+W

(1) This section applies where—

(a) a person who is entitled to occupy a dwelling house by virtue of a beneficial estate or interest is [F874 made] bankrupt, and

(b) any persons under the age of 18 with whom that person had at some time occupied that dwelling house had their home with that person at the time when the [F875 bankruptcy application was made or (as the case may be) the] bankruptcy petition was presented and at the commencement of the bankruptcy.

(2) Whether or not the bankrupt’s [F876 spouse or civil partner (if any) has home rights][F877 under Part IV of the Family Law Act 1996]—

(a) the bankrupt has the followng rights as against the trustee of his estate—

(i) if in occupation, a right not to be evicted or excluded from the dwelling house or any part of it, except with the leave of the court,

(ii) if not in occupation, a right with the leave of the court to enter into and occupy the dwelling house, and

(b) the bankrupt’s rights are a charge, having the like priority as an equitable interest created immediately before the commencement of the bankruptcy, on so much of his estate or interest in the dwelling house as vests in the trustee.

[F878 (3) The Act of 1996 has effect, with the necessary modifications, as if—

(a) the rights conferred by paragraph (a) of subsection (2) were [F879 home rights] under that Act,

(b) any application for such leave as is mentioned in that paragraph were an application for an order under section 33 of that Act, and

(c) any charge under paragraph (b) of that subsection on the estate or interest of the trustee were a charge under that Act on the estate or interest of a spouse [F880 or civil partner].]

(4) Any application for leave such as is mentioned in subsection (2)(a) or otherwise by virtue of this section for an order under [F881 section 33 of the Act of 1996] shall be made to the court having jurisdiction in relation to the bankruptcy.

(5) On such an application the court shall make such order under [F881 section 33 of the Act of 1996] as it thinks just and reasonable having regard to the interests of the creditors, to the bankrupt’s financial resources, to the needs of the children and to all the circumstances of the case other than the needs of the bankrupt.

(6) Where such an application is made after the end of the period of one year beginning with the first vesting (under Chapter IV of this Part) of the bankrupt’s estate in a trustee, the court shall assume, unless the circumstances of the case are exceptional, that the interests of the bankrupt’s creditors outweigh all other considerations.

Textual Amendments

F874 Word in s. 337(1)(a) substituted (6.4.2016) by Enterprise and Regulatory Reform Act 2013 (c. 24), s. 103(3), Sch. 19 para. 30(a); S.I. 2016/191, art. 2 (with art. 3)

F875 Words in s. 337(1)(b) inserted (6.4.2016) by Enterprise and Regulatory Reform Act 2013 (c. 24), s. 103(3), Sch. 19 para. 30(b); S.I. 2016/191, art. 2 (with art. 3)

F876 Words in s. 337(2) substituted (5.12.2005) by Civil Partnership Act 2004 (c. 33), ss. 82, 263, Sch. 9 para. 22(2); S.I. 2005/3175, art. 2(1), Sch. 1

F877 Words in s. 337(2) substituted (1.10.1997) by 1996 c. 27, s. 66(1), Sch. 8 Pt. III para. 58(2) (with Sch. 9 paras. 8-10); S.I. 1997/1892, art. 3(1)(b)

F878 S. 337(3) substituted (1.10.1997) by 1996 c. 27, s. 66(1), Sch. 8 Pt. III para. 58(3) (with Sch. 9 paras. 8-10); S.I. 1997/1892, art. 3(1)(b)

F879 Words in s. 337(3)(a) substituted (5.12.2005) by Civil Partnership Act 2004 (c. 33), ss. 82, 263, Sch. 9 para. 22(3)(a); S.I. 2005/3175, art. 2(1), Sch. 1

F880 Words in s. 337(3)(c) inserted (5.12.2005) by Civil Partnership Act 2004 (c. 33), ss. 82, 263, Sch. 9 para. 22(3)(b); S.I. 2005/3175, art. 2(1), Sch. 1

F881 Words in s. 337(4)(5) substituted (1.10.1997) by 1996 c. 27, s. 66(1), Sch. 8 Pt. III para. 58(4) (with Sch. 9 paras. 8-10); S.I. 1997/1892, art. 3(1)(b)

338 Payments in respect of premises occupied by bankrupt. E+W

Where any premises comprised in a bankrupt’s estate are occupied by him (whether by virtue of the preceding section or otherwise) on condition that he makes payments towards satisfying any liability arising under a mortgage of the premises or otherwise towards the outgoings of the premises, the bankrupt does not, by virtue of those payments, acquire any interest in the premises.

Adjustment of prior transactions, etc. E+W

339 Transactions at an undervalue. E+W

(1) Subject as follows in this section and sections 341 and 342, where an individual is [F882 made] bankrupt and he has at a relevant time (defined in section 341) entered into a transaction with any person at an undervalue, the trustee of the bankrupt’s estate may apply to the court for an order under this section.

(2) The court shall, on such an application, make such order as it thinks fit for restoring the position to what it would have been if that individual had not entered into that transaction.

(3) For the purposes of this section and sections 341 and 342, an individual enters into a transaction with a person at an undervalue if—

(a) he makes a gift to that person or he otherwise enters into a transaction with that person on terms that provide for him to receive no consideration,

(b) he enters into a transaction with that person in consideration of marriage [F883 or the formation of a civil partnership], or

(c) he enters into a transaction with that person for a consideration the value of which, in money or money’s worth, is significantly less than the value, in money or money’s worth, of the consideration provided by the individual.

Textual Amendments

F882 Word in s. 339(1) inserted (6.4.2016) by Enterprise and Regulatory Reform Act 2013 (c. 24), s. 103(3), Sch. 19 para. 31; S.I. 2016/191, art. 2 (with art. 3)

F883 Words in s. 339(3)(b) substituted (5.12.2005) by Civil Partnership Act 2004 (c. 33), ss. 261(1), 263, Sch. 27 para. 119; S.I. 2005/3175, art. 2(2) (subject to art. 2(3)-(5))

Modifications etc. (not altering text)

C1066 S.339 applied (with modifications) by S.I. 1986/1999, art. 3, Sch. 1 Pt. II

S. 339 applied (with modifications) (4.4.2006) by The Cross-Border Insolvency Regulations 2006 (S.I. 2006/1030), reg. 2, Sch. 1 Art. 23 paras. 1-3 (subject to Sch. 1 Art. 23 paras. 6-9)

C1067 S. 339 restricted by Drug Trafficking Offences Act 1986 (c.32, SIF 39:1), s. 15(6)(a)(7)

S. 339 restricted by Criminal Justice (Scotland) Act 1987 (c. 41, SIF 39:1), ss. 30(6), 34(5)(a), 47(4)(a)

S. 339 restricted (25.4.1991) by Companies Act 1989 (c. 40), s. 182(4), Sch. 22 para. 8(1)(a); S.I. 1991/878, art. 2, Sch.

S. 339 restricted by 1986 c. 32, s. 15(6)(a)(b) (as substituted (prosp.) by 1993 c. 36, ss. 13(9), 78(3) (with s. 78(6)) (which amending provision was repealed (3.2.1995) by 1994 c. 37, ss. 67, 69(2), Sch. 3))

S. 339 restricted (3.2.1995) by 1994 c. 37, ss. 32(5)(a), 69(2), Sch. 2 para. 5 (with s. 66(2))

S. 339 restricted (1.11.1995) by 1988 c. 33, s. 84(6)(a) (as substituted by 1995 c. 11, s. 8(7) (with s. 16(5)(6)); S.I. 1995/2650,