Search Legislation

Insolvency Act 1986

 Help about what version

What Version

  • Latest available (Revised)
  • Original (As enacted)
 Help about advanced features

Advanced Features

Changes over time for: Cross Heading: Restrictions on transactions

 Help about opening options

Alternative versions:

Changes to legislation:

Insolvency Act 1986, Cross Heading: Restrictions on transactions is up to date with all changes known to be in force on or before 19 March 2024. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations. Help about Changes to Legislation

Close

Changes to Legislation

Revised legislation carried on this site may not be fully up to date. Changes and effects are recorded by our editorial team in lists which can be found in the ‘Changes to Legislation’ area. Where those effects have yet to be applied to the text of the legislation by the editorial team they are also listed alongside the legislation in the affected provisions. Use the ‘more’ link to open the changes and effects relevant to the provision you are viewing.

View outstanding changes

Changes and effects yet to be applied to the whole Act associated Parts and Chapters:

  • Act amendment to earlier affecting provision S.I. 1986/1999, art. 3, Sch. 1 Pt. 2 by S.I. 2017/1119 Sch. 3 para. 1
  • Act savings and transitional provisions for amendments by S.I. 2022/1166 by S.I. 2022/1172 Regulations

Whole provisions yet to be inserted into this Act (including any effects on those provisions):

[F1Restrictions on transactionsU.K.

Textual Amendments

A25Restrictions on obtaining creditU.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.

A26Restrictions on grant of security etcU.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.

A27Prohibition on entering into market contracts etcU.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.]

Back to top

Options/Help

Print Options

You have chosen to open The Whole Act

The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

You have chosen to open The Whole Act as a PDF

The Whole Act you have selected contains over 200 provisions and might take some time to download.

Would you like to continue?

You have chosen to open The Whole Act without Schedules

The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

You have chosen to open The Whole Act without Schedules as a PDF

The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download.

Would you like to continue?

You have chosen to open the Whole Act

The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

You have chosen to open the Whole Act without Schedules

The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

You have chosen to open Schedules only

The Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

Close

Legislation is available in different versions:

Latest Available (revised):The latest available updated version of the legislation incorporating changes made by subsequent legislation and applied by our editorial team. Changes we have not yet applied to the text, can be found in the ‘Changes to Legislation’ area.

Original (As Enacted or Made): The original version of the legislation as it stood when it was enacted or made. No changes have been applied to the text.

Close

See additional information alongside the content

Geographical Extent: Indicates the geographical area that this provision applies to. For further information see ‘Frequently Asked Questions’.

Show Timeline of Changes: See how this legislation has or could change over time. Turning this feature on will show extra navigation options to go to these specific points in time. Return to the latest available version by using the controls above in the What Version box.

Close

Opening Options

Different options to open legislation in order to view more content on screen at once

Close

More Resources

Access essential accompanying documents and information for this legislation item from this tab. Dependent on the legislation item being viewed this may include:

  • the original print PDF of the as enacted version that was used for the print copy
  • lists of changes made by and/or affecting this legislation item
  • confers power and blanket amendment details
  • all formats of all associated documents
  • correction slips
  • links to related legislation and further information resources
Close

Timeline of Changes

This timeline shows the different points in time where a change occurred. The dates will coincide with the earliest date on which the change (e.g an insertion, a repeal or a substitution) that was applied came into force. The first date in the timeline will usually be the earliest date when the provision came into force. In some cases the first date is 01/02/1991 (or for Northern Ireland legislation 01/01/2006). This date is our basedate. No versions before this date are available. For further information see the Editorial Practice Guide and Glossary under Help.

Close

More Resources

Use this menu to access essential accompanying documents and information for this legislation item. Dependent on the legislation item being viewed this may include:

  • the original print PDF of the as enacted version that was used for the print copy
  • correction slips

Click 'View More' or select 'More Resources' tab for additional information including:

  • lists of changes made by and/or affecting this legislation item
  • confers power and blanket amendment details
  • all formats of all associated documents
  • links to related legislation and further information resources