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Insolvency Act 1986

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SCHEDULES

[F1SCHEDULE A1E+W+S Moratorium where directors propose voluntary arrangement

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Amendments (Textual)

F1Sch. A1 inserted (11.5.2001 so far as is necessary to give effect to Sch. A1 paras. 5, 45(1)-(3)(5) and 1.1.2003 in so far as not already in force) by 2000 c. 39, s. 1, Sch. 1 para. 4; S.I. 2001/1751, art. 2; S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

Modifications etc. (not altering text)

C1Sch. A1 applied (with modifications) (E.W.) (1.1.2003) by S.I. 1994/2421, art. 4(1), Sch. 1 (as amended (1.1.2003) by S.I. 2002/2708, arts. 4-6 (with transitional provisions in art. 11) and (1.7.2005) by S.I. 2005/1516, art. 6)

Part IE+W+S Introductory

InterpretationE+W+S

F21In this Schedule—

  • the beginning of the moratorium” has the meaning given by paragraph 8(1),

  • the date of filing” means the date on which the documents for the time being referred to in paragraph 7(1) are filed or lodged with the court,

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

  • market contract” and “market charge” have the meanings given by Part VII of the M1Companies Act 1989,

  • F3. . .

  • moratorium” means a moratorium under section 1A,

  • the nominee” includes any person for the time being carrying out the functions of a nominee under this Schedule,

  • F3. . .

  • the settlement finality regulations” means the M2Financial Markets and Insolvency (Settlement Finality) Regulations 1999,

  • system-charge” has the meaning given by the M3Financial Markets and Insolvency Regulations 1996.

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Amendments (Textual)

F2Sch. A1 inserted (11.5.2001 so far as is necessary to give effect to Sch. A1 paras. 5, 45(1)-(3)(5) and 1.1.2003 in so far as not already in force) by 2000 c. 39, s. 1, Sch. 1 para. 4; S.I. 2001/1751, art. 2; S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F3Sch. A1 para. 1: definitions of “money market contract" and “money market charge" and “related contract" repealed (3.7.2002) by S.I. 2002/1555, art. 28(2)

Marginal Citations

Eligible companiesE+W+S

F42(1)A company is eligible for a moratorium if it meets the requirements of paragraph 3, unless—E+W+S

(a)it is excluded from being eligible by virtue of paragraph 4, or

(b)it falls within sub-paragraph (2).

(2)A company falls within this sub-paragraph if—

[F5(a)it effects or carries out contracts of insurance, but is not exempt from the general prohibition, within the meaning of section 19 of the Financial Services and Markets Act 2000, in relation to that activity,

(b)it has permission under Part IV of that Act to accept deposits,

(bb)it has a liability in respect of a deposit which it accepted in accordance with the Banking Act 1979 (c. 37) or 1987 (c. 22),]

(c)it is a party to a market contract F6. . . or any of its property is subject to a market charge F6. . . or a system-charge, or

(d)it is a participant (within the meaning of the settlement finality regulations) or any of its property is subject to a collateral security charge (within the meaning of those regulations).

[F7(3)Paragraphs (a), (b) and (bb) of sub-paragraph (2) must be read with—

(a)section 22 of the Financial Services and Markets Act 2000;

(b)any relevant order under that section; and

(c)Schedule 2 to that Act.]

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Amendments (Textual)

F4Sch. A1 inserted (11.5.2001 so far as is necessary to give effect to Sch. A1 paras. 5, 45(1)-(3)(5) and 1.1.2003 in so far as not already in force) by 2000 c. 39, ss. 1, 16, Sch. 1 para. 4; S.I. 2001/1751, art. 2; S.I. 2002/2711, art. 2 (subject to transitional provisions arts. 3-5)

F5Sch. A1 para. 2(a)-(bb) substituted for Sch. A1 para. 2(a)-(b) (3.7.2002) by S.I. 2002/1555, art. 29(2)

F6Words in Sch. A1 para. 2(2)(c) omitted (3.7.2002) by virtue of S.I. 2002/1555, art. 28(3)

F7Sch. A1 para. 2(3) inserted (3.7.2002) by S.I. 2002/1555, art. 29(3)

F83(1)A company meets the requirements of this paragraph if the qualifying conditions are met—E+W+S

(a)in the year ending with the date of filing, or

(b)in the financial year of the company which ended last before that date.

(2)For the purposes of sub-paragraph (1)—

(a)the qualifying conditions are met by a company in a period if, in that period, it satisfies two or more of the requirements for being a small company specified for the time being in [F9section 382(3) of the Companies Act 2006] , and

(b)a company’s financial year is to be determined in accordance with that Act.

(3)[F10Section 382(4), (5) and (6)] of that Act apply for the purposes of this paragraph as they apply for the purposes of that section.

[F11(4)A company does not meet the requirements of this paragraph if it is a [F12parent company] of a group of companies which does not qualify as a small group or a medium-sized group [F13in relation to] the financial year of the company which ended last before the date of filing.

[F14(5)For the purposes of sub-paragraph (4)—

(a)group” has the same meaning as in Part 15 of the Companies Act 2006 (see section 474(1) of that Act); and

(b)a group qualifies as small in relation to a financial year if it so qualifies under section 383(2) to (7) of that Act, and qualifies as medium-sized in relation to a financial year if it so qualifies under section 466(2) to (7) of that Act.]]

[F15(6)Expressions used in this paragraph that are defined expressions in Part 15 of the Companies Act 2006 (accounts and reports) have the same meaning in this paragraph as in that Part.]

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Amendments (Textual)

F8Sch. A1 inserted (11.5.2001 so far as is necessary to give effect to Sch. A1 paras. 5, 45(1)-(3)(5) and 1.1.2003 in so far as not already in force) by 2000 c. 39, s. 1, Sch. 1 para. 4; S.I. 2001/1751, art. 2; S.I. 2002/2711, art. 2 (subject to transitional provisions arts. 3-5)

F9Words in Sch. A1 para. 3(2) substituted (6.4.2008 with application in accordance with Sch. 1 para. 99(6)) by The Companies Act 2006 (Consequential Amendments etc) Order 2008 (S.I. 2008/948), art. 3(1), Sch. 1 para. 99(2) (with arts. 6, 11, 12)

F10Words in Sch. A1 para. 3(3) substituted (6.4.2008 with application in accordance with Sch. 1 para. 99(6)) by The Companies Act 2006 (Consequential Amendments etc) Order 2008 (S.I. 2008/948), art. 3(1), Sch. 1 para. 99(3) (with arts. 6, 11, 12)

F11Sch. A1 para. 3(4)(5) inserted (1.1.2003) by S.I. 2002/1990, regs. 2, 3(2); S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5 of the commencing S.I.)

F12Words in Sch. A1 para. 3(4) substituted (6.4.2008 with application in accordance with Sch. 1 para. 99(6)) by The Companies Act 2006 (Consequential Amendments etc) Order 2008 (S.I. 2008/948), art. 3(1), Sch. 1 para. 99(4)(a) (with arts. 6, 11, 12)

F13Words in Sch. A1 para. 3(4) substituted (6.4.2008 with application in accordance with Sch. 1 para. 99(6)) by The Companies Act 2006 (Consequential Amendments etc) Order 2008 (S.I. 2008/948), art. 3(1), Sch. 1 para. 99(4)(b) (with arts. 6, 11, 12)

F15Sch. A1 para. 3(6) 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. 71(4)(a)} (with art. 10, Sch. 1 para. 84)

F164(1)A company is excluded from being eligible for a moratorium if, on the date of filing—E+W+S

[F17(a)the company is in administration,]

(b)the company is being wound up,

(c)there is an administrative receiver of the company,

(d)a voluntary arrangement has effect in relation to the company,

(e)there is a provisional liquidator of the company,

(f)a moratorium has been in force for the company at any time during the period of 12 months ending with the date of filing and—

(i)no voluntary arrangement had effect at the time at which the moratorium came to an end, or

(ii)a voluntary arrangement which had effect at any time in that period has come to an end prematurely, or

[F18(fa)an administrator appointed under paragraph 22 of Schedule B1 has held office in the period of 12 months ending with the date of filing,]

(g)a voluntary arrangement in relation to the company which had effect in pursuance of a proposal under section 1(3) has come to an end prematurely and, during the period of 12 months ending with the date of filing, an order under section 5(3)(a) has been made.

(2)Sub-paragraph (1)(b) does not apply to a company which, by reason of a winding-up order made after the date of filing, is treated as being wound up on that date.

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Amendments (Textual)

F16Sch. A1 inserted (11.5.2001 so far as is necessary to give effect to Sch. A1 paras. 5, 45(1)-(3)(5) and 1.1.2003 so far as not already in force) by 2000 c. 39, s. 1, Sch. 1 para. 4; S.I. 2001/1751, art. 2; S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F17Sch. A1 para. 4(1)(a) substituted (15.9.2003) by 2002 c. 40, ss. 248(3), 279, Sch. 17 para. 37(2)(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))

F18Sch. A1 para. 4(1)(fa) inserted (15.9.2003) by 2002 c. 40, ss. 248(3), 279, Sch. 17 para. 37(2)(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))

Capital market arrangementE+W+S

[F194AA company is also excluded from being eligible for a moratorium if, on the date of filing, it is a party to an agreement which is or forms part of a capital market arrangement under which—

(i)a party has incurred, or when the agreement was entered into was expected to incur, a debt of at least £10 million under the arrangement, and

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

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Amendments (Textual)

F19Sch. A1 paras. 4A-4K inserted (1.1.2003) by S.I. 2002/1990, art. 3(3); S.I. 2002/2711, art. 2 (subject to transitional provision in arts. 3-5 of the commencing S.I.)

Public private partnershipE+W+S

[F204BA company is also excluded from being eligible for a moratorium if, on the date of filing, it is a project company of a project which—

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

(ii)includes step-in rights.]

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Amendments (Textual)

F20Sch. A1 paras. 4A-4K inserted (1.1.2003) by S.I. 2002/1990, art. 3(3); S.I. 2002/2711, art. 2 (subject to transitional provision in arts. 3-5 of the commencing S.I.)

Liability under an arrangementE+W+S

[F214C(1)A company is also excluded from being eligible for a moratorium if, on the date of filing, it has incurred a liability under an agreement of £10 million or more.

(2)Where the liability in sub-paragraph (1) is a contingent liability under or by virtue of a guarantee or an indemnity or security provided on behalf of another person, the amount of that liability is the full amount of the liability in relation to which the guarantee, indemnity or security is provided.

(3)In this paragraph—

(a)the reference to “liability” includes a present or future liability whether, in either case, it is certain or contingent,

(b)the reference to “liability” includes a reference to a liability to be paid wholly or partly in foreign currency (in which case the sterling equivalent shall be calculated as at the time when the liability is incurred).]

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Amendments (Textual)

F21Sch. A1 paras. 4A-4K inserted (1.1.2003) by S.I. 2002/1990, art. 3(3); S.I. 2002/2711, art. 2 (subject to transitional provision in arts. 3-5 of the commencing S.I.)

Interpretation of capital market arrangementE+W+S

[F224D(1)For the purposes of paragraph 4A an arrangement is a capital market arrangement if—

(a)it involves a grant of security to a person holding it as trustee for a person who holds a capital market investment issued by a party to the arrangement, or

(b)at least one party guarantees the performance of obligations of another party, or

(c)at least one party provides security in respect of the performance of obligations of another party, or

(d)the arrangement involves an investment of a kind described in articles 83 to 85 of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/544) (options, futures and contracts for differences).

(2)For the purposes of sub-paragraph (1)—

(a)a reference to holding as trustee includes a reference to holding as nominee or agent,

(b)a reference to holding for a person who holds a capital market investment includes a reference to holding for a number of persons at least one of whom holds a capital market investment, and

(c)a person holds a capital market investment if he has a legal or beneficial interest in it.

(3)In paragraph 4A, 4C, 4J and this paragraph—

  • “agreement” includes an agreement or undertaking effected by—

    (a)

    contract,

    (b)

    deed, or

    (c)

    any other instrument intended to have effect in accordance with the law of England and Wales, Scotland or another jurisdiction, and

  • “party” to an arrangement includes a party to an agreement which—

    (a)

    forms part of the arrangement,

    (b)

    provides for the raising of finance as part of the arrangement, or

    (c)

    is necessary for the purposes of implementing the arrangement.]

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Amendments (Textual)

F22Sch. A1 paras. 4A-4K inserted (1.1.2003) by S.I. 2002/1990, art. 3(3); S.I. 2002/2711, art. 2 (subject to transitional provision in arts. 3-5 of the commencing S.I.)

Capital market investmentE+W+S

[F234E(1)For the purposes of paragraphs 4A and 4D, an investment is a capital market investment if—

(a)it is within article 77 [F24or 77A] of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/544) (debt instruments) and

(b)it is rated, listed or traded or designed to be rated, listed or traded.

(2)In sub-paragraph (1)—

  • “listed” means admitted to the official list within the meaning given by section 103(1) of the Financial Services and Markets Act 2000 (c. 8) (interpretation),

  • “rated” means rated for the purposes of investment by an internationally recognised rating agency,

  • “traded” means admitted to trading on a market established under the rules of a recognised investment exchange or on a foreign market.

(3)In sub-paragraph (2)—

  • “foreign market” has the same meaning as “relevant market” in article 67(2) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 (S.I. 2001/1335) (foreign markets),

  • “recognised investment exchange” has the meaning given by section 285 of the Financial Services and Markets Act 2000 (recognised investment exchange).]

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Amendments (Textual)

F23Sch. A1 paras. 4A-4K inserted (1.1.2003) by S.I. 2002/1990, art. 3(3); S.I. 2002/2711, art. 2 (subject to transitional provision in arts. 3-5 of the commencing S.I.)

[F254F(1)For the purposes of paragraphs 4A and 4D an investment is also a capital market investment if it consists of a bond or commercial paper issued to one or more of the following—E+W+S

(a)an investment professional within the meaning of article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001,

(b)a person who is, when the agreement mentioned in paragraph 4A is entered into, a certified high net worth individual in relation to a communication within the meaning of article 48(2) of that order,

(c)a person to whom article 49(2) of that order applies (high net worth company, &c.),

(d)a person who is, when the agreement mentioned in paragraph 4A is entered into, a certified sophisticated investor in relation to a communication within the meaning of article 50(1) of that order, and

(e)a person in a State other than the United Kingdom who under the law of that State is not prohibited from investing in bonds or commercial paper.

(2)For the purposes of sub-paragraph (1)—

(a)in applying article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 for the purposes of sub-paragraph (1)(a)—

(i)in article 19(5)(b), ignore the words after “exempt person”,

(ii)in article 19(5)(c)(i), for the words from “the controlled activity” to the end substitute “a controlled activity", and

(iii)in article 19(5)(e) ignore the words from “where the communication” to the end, and

(b)in applying article 49(2) of that order for the purposes of sub-paragraph (1)(c), ignore article 49(2)(e).

(3)In sub-paragraph (1)—

  • “bond” shall be construed in accordance with article 77 of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 [F26, and includes any instrument falling within article 77A of that Order] (S.I. 2001/544), and

  • “commercial paper” has the meaning given by article 9(3) of that order.]

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Amendments (Textual)

F25Sch. A1 paras. 4A-4K inserted (1.1.2003) by S.I. 2002/1990, art. 3(3); S.I. 2002/2711, art. 2 (subject to transitional provision in arts. 3-5 of the commencing S.I.)

DebtE+W+S

[F274GThe debt of at least £10 million referred to in paragraph 4A—

(a)may be incurred at any time during the life of the capital market arrangement, and

(b)may be expressed wholly or partly in a foreign currency (in which case the sterling equivalent shall be calculated as at the time when the arrangement is entered into).]

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Amendments (Textual)

F27Sch. A1 paras. 4A-4K inserted (1.1.2003) by S.I. 2002/1990, art. 3(3); S.I. 2002/2711, art. 2 (subject to transitional provision in arts. 3-5 of the commencing S.I.)

Interpretation of project companyE+W+S

[F284H(1)For the purposes of paragraph 4B a company is a “project company” of a project if—

(a)it holds property for the purpose of the project,

(b)it has sole or principal responsibility under an agreement for carrying out all or part of the project,

(c)it is one of a number of companies which together carry out the project,

(d)it has the purpose of supplying finance to enable the project to be carried out, or

(e)it is the holding company of a company within any of paragraphs (a) to (d).

(2)But a company is not a “project company” of a project if—

(a)it performs a function within sub-paragraph (1)(a) to (d) or is within sub-paragraph (1)(e), but

(b)it also performs a function which is not—

(i)within sub-paragraph (1)(a) to (d),

(ii)related to a function within sub-paragraph (1)(a) to (d), or

(iii)related to the project.

(3)For the purposes of this paragraph a company carries out all or part of a project whether or not it acts wholly or partly through agents.]

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Amendments (Textual)

F28Sch. A1 paras. 4A-4K inserted (1.1.2003) by S.I. 2002/1990, art. 3(3); S.I. 2002/2711, art. 2 (subject to transitional provision in arts. 3-5 of the commencing S.I.)

Public-private partnership projectE+W+S

[F294I(1)In paragraph 4B “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.

(2)In sub-paragraph (1) “resources” includes—

(a)funds (including payment for the provision of services or facilities),

(b)assets,

(c)professional skill,

(d)the grant of a concession or franchise, and

(e)any other commercial resource.

(3)In sub-paragraph (1) “public body” means—

(a)a body which exercises public functions,

(b)a body specified for the purposes of this paragraph by the Secretary of State, and

(c)a body within a class specified for the purposes of this paragraph by the Secretary of State.

(4)A specification under sub-paragraph (3) may be—

(a)general, or

(b)for the purpose of the application of paragraph 4B to a specified case.]

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Amendments (Textual)

F29Sch. A1 paras. 4A-4K inserted (1.1.2003) by S.I. 2002/1990, art. 3(3); S.I. 2002/2711, art. 2 (subject to transitional provision in arts. 3-5 of the commencing S.I.)

Step-in rightsE+W+S

[F304J(1)For the purposes of paragraph 4B a project has “step-in rights” if a person who provides finance in connection with the project has a conditional entitlement under an agreement to—

(i)assume sole or principal responsibility under an agreement for carrying out all or part of the project, or

(ii)make arrangements for carrying out all or part of the project.

(2)In sub-paragraph (1) a reference to the provision of finance includes a reference to the provision of an indemnity.]

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Amendments (Textual)

F30Sch. A1 paras. 4A-4K inserted (1.1.2003) by S.I. 2002/1990, art. 3(3); S.I. 2002/2711, art. 2 (subject to transitional provision in arts. 3-5 of the commencing S.I.)

PersonE+W+S

[F314KFor the purposes of paragraphs 4A to 4J, a reference to a person includes a reference to a partnership or another unincorporated group of persons.]

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Amendments (Textual)

F31Sch. A1 paras. 4A-4K inserted (1.1.2003) by S.I. 2002/1990, art. 3(3); S.I. 2002/2711, art. 2 (subject to transitional provision in arts. 3-5 of the commencing S.I.)

F325The Secretary of State may by regulations modify the qualifications for eligibility of a company for a moratorium.

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Amendments (Textual)

F32Sch. A1 inserted (11.5.2001 so far as is necessary to give effect to Sch. A1 paras. 5, 45(1)-(3)(5) and 1.1.2003 in so far as not already in force) by 2000 c. 39, s. 1, Sch. 1 para. 4; S.I. 2001/1751, art. 2; S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

Part IIE+W+S Obtaining a moratorium

Nominee’s statementE+W+S

6(1)Where the directors of a company wish to obtain a moratorium, they shall submit to the nominee—E+W+S

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

(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, and

(c)any other information necessary to enable the nominee to comply with sub-paragraph (2) which he requests from them.

(2)The nominee shall submit to the directors a statement in the prescribed form indicating whether or not, in his opinion—

(a)the proposed voluntary arrangement has a reasonable prospect of being approved and implemented,

(b)the company is likely to have sufficient funds available to it during the proposed moratorium to enable it to carry on its business, and

[F33(c)meetings of the company and its creditors should be summoned to consider the proposed voluntary arrangement.]

[F33(c)the proposed voluntary arrangement should be considered by a meeting of the company and by the company's creditors.]

(3)In forming his opinion on the matters mentioned in sub-paragraph (2), the nominee is entitled to rely on the information submitted to him under sub-paragraph (1) unless he has reason to doubt its accuracy.

(4)The reference in sub-paragraph (2)(b) to the company’s business is to that business as the company proposes to carry it on during the moratorium.

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Amendments (Textual)

F33Sch. A1 para. 6(2)(c) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(2); S.I. 2015/1329, reg. 3(d)

Documents to be submitted to courtE+W+S

7(1)To obtain a moratorium the directors of a company must file (in Scotland, lodge) with the court—E+W+S

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

(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,

(c)a statement that the company is eligible for a moratorium,

(d)a statement from the nominee that he has given his consent to act, and

(e)a statement from the nominee that, in his opinion—

(i)the proposed voluntary arrangement has a reasonable prospect of being approved and implemented,

(ii)the company is likely to have sufficient funds available to it during the proposed moratorium to enable it to carry on its business, and

[F34(iii)meetings of the company and its creditors should be summoned to consider the proposed voluntary arrangement.]

[F34(iii)the proposed voluntary arrangement should be considered by a meeting of the company and by the company's creditors.]

(2)Each of the statements mentioned in sub-paragraph (1)(b) to (e), except so far as it contains the particulars referred to in paragraph (b)(i), must be in the prescribed form.

(3)The reference in sub-paragraph (1)(e)(ii) to the company’s business is to that business as the company proposes to carry it on during the moratorium.

(4)The Secretary of State may by regulations modify the requirements of this paragraph as to the documents required to be filed (in Scotland, lodged) with the court in order to obtain a moratorium.

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Amendments (Textual)

F34Sch. A1 para. 7(1)(e)(iii) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(3); S.I. 2015/1329, reg. 3(d)

Duration of moratoriumE+W+S

8(1)A moratorium comes into force when the documents for the time being referred to in paragraph 7(1) are filed or lodged with the court and references in this Schedule to “the beginning of the moratorium” shall be construed accordingly.E+W+S

[F35(2)A moratorium ends at the end of the day on which the meetings summoned under paragraph 29(1) are first held (or, if the meetings are held on different days, the later of those days), unless it is extended under paragraph 32.

(3)If either of those meetings has not first met before the end of the period of 28 days beginning with the day on which the moratorium comes into force, the moratorium ends at the end of the day on which those meetings were to be held (or, if those meetings were summoned to be held on different days, the later of those days), unless it is extended under paragraph 32.

(4)If the nominee fails to summon either meeting within the period required by paragraph 29(1), the moratorium ends at the end of the last day of that period.]

[F35(2)A moratorium ends with the later of—

(a)the day on which the company meeting summoned under paragraph 29 is first held, and

(b)the day on which the company's creditors decide whether to approve the proposed voluntary arrangement,

unless it is extended under paragraph 32; but this is subject to the rest of this paragraph.

(3)In this paragraph the “initial period” means the period of 28 days beginning with the day on which the moratorium comes into force.

(3A)If the company meeting has not first met before the end of the initial period the moratorium ends at the end of that period, unless before the end of that period it is extended under paragraph 32.

(3B)If the company's creditors have not decided whether to approve the proposed voluntary arrangement before the end of the initial period the moratorium ends at the end of that period, unless before the end of that period—

(a)the moratorium is extended under paragraph 32, or

(b)a meeting of the company's creditors is summoned in accordance with section 246ZE.

(3C)Where sub-paragraph (3B)(b) applies, the moratorium ends with the day on which the meeting of the company's creditors is first held, unless it is extended under paragraph 32.

(4)The moratorium ends at the end of the initial period if the nominee has not before the end of that period—

(a)summoned a meeting of the company, and

(b)sought a decision from the company's creditors,

as required by paragraph 29(1).]

(5)If the moratorium is extended (or further extended) under paragraph 32, it ends at the end of the day to which it is extended (or further extended).

(6)Sub-paragraphs (2) to (5) do not apply if the moratorium comes to an end before the time concerned by virtue of—

(a)paragraph 25(4) (effect of withdrawal by nominee of consent to act),

(b)an order under paragraph 26(3), 27(3) or 40 (challenge of actions of nominee or directors), or

[F36(c)a decision of one or both of the meetings summoned under paragraph 29.]

[F36(c)a decision of one or both of—

(i)the meeting of the company summoned under paragraph 29, or

(ii)the company's creditors.]

(7)If the moratorium has not previously come to an end in accordance with sub-paragraphs (2) to (6), it ends at the end of the day on which a decision under paragraph 31 to approve a voluntary arrangement takes effect under paragraph 36.

(8)The Secretary of State may by order increase or reduce the period for the time being specified in sub-paragraph (3).

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Amendments (Textual)

F35Sch. A1 para. 8(2)-(4) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(4); S.I. 2015/1329, reg. 3(d)

F36Sch. A1 para. 8(6)(c) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(5); S.I. 2015/1329, reg. 3(d)

Notification of beginning of moratoriumE+W+S

F379(1)When a moratorium comes into force, the directors shall notify the nominee of that fact forthwith.E+W+S

(2)If the directors without reasonable excuse fail to comply with sub-paragraph (1), each of them is liable to imprisonment or a fine, or both.

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Amendments (Textual)

F37Sch. A1 inserted (11.5.2001 so far as is necessary to give effect to Sch. A1 paras. 5, 45(1)-(3)(5) and 1.1.2003 in so far as not already in force) by 2000 c. 39, s. 1, Sch. 1 para. 4; S.I. 2001/1751, art. 2; S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F3810(1)When a moratorium comes into force, the nominee shall, in accordance with the rules—E+W+S

(a)advertise that fact forthwith, and

(b)notify the registrar of companies, the company and any petitioning creditor of the company of whose claim he is aware of that fact.

(2)In sub-paragraph (1)(b), “petitioning creditor” means a creditor by whom a winding-up petition has been presented before the beginning of the moratorium, as long as the petition has not been dismissed or withdrawn.

(3)If the nominee without reasonable excuse fails to comply with sub-paragraph (1)(a) or (b), he is liable to a fine.

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Amendments (Textual)

F38Sch. A1 inserted (11.5.2001 so far as is necessary to give effect to Sch. A1 paras. 5, 45(1)-(3)(5) and 1.1.2003 so far as not already in force) by 2000 c. 39, s. 1, Sch. 1 para. 4; S.I. 2001/1751, art. 2; S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

Notification of end of moratoriumE+W+S

F3911(1)When a moratorium comes to an end, the nominee shall, in accordance with the rules—E+W+S

(a)advertise that fact forthwith, and

(b)notify the court, the registrar of companies, the company and any creditor of the company of whose claim he is aware of that fact.

(2)If the nominee without reasonable excuse fails to comply with sub-paragraph (1)(a) or (b), he is liable to a fine.

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Amendments (Textual)

F39Sch. A1 inserted (11.5.2001 so far as is necessary to give effect to Sch. A1 paras. 5, 45(1)-(3)(5) and 1.1.2003 in so far as not already in force) by 2000 c. 39, s. 1, Sch. 1 para. 4; S.I. 2001/1751, art. 2; S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F40Part IIIE+W+S Effects of moratorium

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Amendments (Textual)

F40Sch. A1 (Pts. I-VI) inserted (11.5.2001 so far as is necessary to give effect to Sch. A1 para. 5, 45(1)-(3)(5) and 1.1.2003 in so far as not already in force) by 2000 c. 39, s. 1, Sch. 1 para. 4; S.I. 2001/1751, art. 2; S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

Effect on creditors, etc.E+W+S

F4112(1)During the period for which a moratorium is in force for a company—E+W+S

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

(b)no meeting of the company may be called or requisitioned except with the consent of the nominee or the leave of the court and subject (where the court gives leave) to such terms as the court may impose,

(c)no resolution may be passed or order made for the winding up of the company,

[F42(d)no administration application may be made in respect of the company,

(da)no administrator of the company may be appointed under paragraph 14 or 22 of Schedule B1,]

(e)no administrative receiver of the company may be appointed,

(f)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 leave of the court and subject to such terms as the court may impose,

(g)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 leave of the court and subject to such terms as the court may impose, and

(h)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 leave of the court and subject to such terms as the court may impose.

(2)Where a petition, other than an excepted petition, for the winding up of the company has been presented before the beginning of the moratorium, section 127 shall not apply in relation to any disposition of property, transfer of shares or alteration in status made during the moratorium or at a time mentioned in paragraph 37(5)(a).

(3)In the application of sub-paragraph (1)(h) to Scotland, the reference to execution being commenced or continued includes a reference to diligence being carried out or continued, and the reference to distress being levied is omitted.

(4)Paragraph (a) of sub-paragraph (1) does not apply to an excepted petition and, where such a petition has been presented before the beginning of the moratorium or is presented during the moratorium, paragraphs (b) and (c) of that sub-paragraph do not apply in relation to proceedings on the petition.

(5)For the purposes of this paragraph, “excepted petition” means a petition under—

(a)section 124A [F43or 124B] of this Act,

(b)section 72 of the M4Financial Services Act 1986 on the ground mentioned in subsection (1)(b) of that section, or

(c)section 92 of the M5Banking Act 1987 on the ground mentioned in subsection (1)(b) of that section.

[F44(d)section 367 of the Financial Services and Markets Act 2000 on the ground mentioned in subsection (3)(b) of that section.]

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Amendments (Textual)

F41Sch. A1 inserted (11.5.2001 so far as is necessary to give effect to Sch. A1 paras. 5, 45(1)-(3)(5) and 1.1.2003 in so far as not already in force) by 2000 c. 39, s. 1, Sch. 1 para. 4; S.I. 2001/1751, art. 2; S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F42Sch. A1 para. 12(1)(d)(da) substituted (15.9.2003) for Sch. A1 para. 12(1)(d) by 2002 c. 40, ss. 248(3), 279, Sch. 17 para. 37(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))

F43Words in Sch. A1 para. 12(5)(a) inserted (8.10.2004) by The European Public Limited-Liability Company Regulations 2004 (S.I. 2004/2326), reg. 73(4)(b)

F44Sch. A1 para. 12(5)(d) inserted (3.7.2002) by S.I. 2002/1555, art. 30

Modifications etc. (not altering text)

Marginal Citations

13(1)This paragraph applies where there is an uncrystallised floating charge on the property of a company for which a moratorium is in force.E+W+S

(2)If the conditions for the holder of the charge to give a notice having the effect mentioned in sub-paragraph (4) are met at any time, the notice may not be given at that time but may instead be given as soon as practicable after the moratorium has come to an end.

(3)If any other event occurs at any time which (apart from this sub-paragraph) would have the effect mentioned in sub-paragraph (4), then—

(a)the event shall not have the effect in question at that time, but

(b)if notice of the event is given to the company by the holder of the charge as soon as is practicable after the moratorium has come to an end, the event is to be treated as if it had occurred when the notice was given.

(4)The effect referred to in sub-paragraphs (2) and (3) is—

(a)causing the crystallisation of the floating charge, or

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

(5)Application may not be made for leave under paragraph 12(1)(g) or (h) with a view to obtaining—

(a)the crystallisation of the floating charge, or

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

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Modifications etc. (not altering text)

C5Sch. A1 inserted (11.5.2001 so far as is necessary to give effect to Sch. A1 paras. 5, 45(1)-(3)(5) and 1.1.2003 in so far as not already in force) by 2000 c. 39, s. 1, Sch. 1 para. 4; S.I. 2001/1751, art. 2; S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F4514Security granted by a company at a time when a moratorium is in force in relation to the company may only be enforced if, at that time, there were reasonable grounds for believing that it would benefit the company.

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Amendments (Textual)

F45Sch. A1 inserted (11.5.2001 so far as is necessary to give effect to Sch. A1 paras. 5, 45(1)-(3)(5) and 1.1.2003 in so far as not already in force) by 2000 c. 39, s. 1, Sch. 1 para. 4; S.I. 2001/1751, art. 2; S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

Effect on companyE+W+S

F4615(1)Paragraphs 16 to 23 apply in relation to a company for which a moratorium is in force.E+W+S

(2)The fact that a company enters into a transaction in contravention of any of paragraphs 16 to 22 does not—

(a)make the transaction void, or

(b)make it to any extent unenforceable against the company.

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Amendments (Textual)

F46Sch. A1 inserted (11.5.2001 so far as is necessary to give effect to Sch. A1 paras. 5, 45(1)-(3)(5) and 1.1.2003 in so far as not already in force) by 2000 c. 39, s. 1, Sch. 1 para. 4; S.I. 2001/1751, art. 2; S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

Company invoices, etc.E+W+S

F4716[F48(1)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, and all the company's websites, must also contain the nominee's name and a statement that the moratorium is in force for the company.]E+W+S

(2)If default is made in complying with sub-paragraph (1), the company and (subject to sub-paragraph (3)) any officer of the company is liable to a fine.

(3)An officer of the company is only liable under sub-paragraph (2) if, without reasonable excuse, he authorises or permits the default.

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Amendments (Textual)

F47Sch. A1 inserted (11.5.2001 so far as is necessary to give effect to Sch. A1 paras. 5, 45(1)-(3)(5) and 1.1.2003 in so far as not already in force) by 2000 c. 39, s. 1, Sch. 1 para. 4; S.I. 2001/1751, art. 2; S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

Obtaining credit during moratoriumE+W+S

F4917(1)The company may not obtain credit to the extent of £250 or more from a person who has not been informed that a moratorium is in force in relation to the company.E+W+S

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

(a)where goods are bailed (in Scotland, hired) to the company under a hire-purchase agreement, or agreed to be sold to the company under a conditional sale agreement, and

(b)where the company is paid in advance (whether in money or otherwise) for the supply of goods or services.

(3)Where the company obtains credit in contravention of sub-paragraph (1)—

(a)the company is liable to a fine, and

(b)if any officer of the company knowingly and wilfully authorised or permitted the contravention, he is liable to imprisonment or a fine, or both.

(4)The money sum specified in sub-paragraph (1) is subject to increase or reduction by order under section 417A in Part XV.

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Amendments (Textual)

F49Sch. A1 inserted (11.5.2001 so far as is necessary to give effect to Sch. A1 paras. 5, 45(1)-(3)(5) and 1.1.2003 in so far as not already in force) by 2000 c. 39, s. 1, Sch. 1 para. 4; S.I. 2001/1751, art. 2; S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

Disposals and paymentsE+W+S

F5018(1)Subject to sub-paragraph (2), the company may only dispose of any of its property if—E+W+S

(a)there are reasonable grounds for believing that the disposal will benefit the company, and

(b)the disposal is approved by the committee established under paragraph 35(1) or, where there is no such committee, by the nominee.

(2)Sub-paragraph (1) does not apply to a disposal made in the ordinary way of the company’s business.

(3)If the company makes a disposal in contravention of sub-paragraph (1) otherwise than in pursuance of an order of the court—

(a)the company is liable to a fine, and

(b)if any officer of the company authorised or permitted the contravention, without reasonable excuse, he is liable to imprisonment or a fine, or both.

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Amendments (Textual)

F50Sch. A1 inserted (11.5.2001 so far as is necessary to give effect to Sch. A1 paras. 5, 45(1)-(3)(5) and 1.1.2003 in so far as not already in force) by 2000 c. 39, s. 1, Sch. 1 para. 4; S.I. 2001/1751, art. 2; S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F5119(1)Subject to sub-paragraph (2), the company may only make any payment in respect of any debt or other liability of the company in existence before the beginning of the moratorium if—E+W+S

(a)there are reasonable grounds for believing that the payment will benefit the company, and

(b)the payment is approved by the committee established under paragraph 35(1) or, where there is no such committee, by the nominee.

(2)Sub-paragraph (1) does not apply to a payment required by paragraph 20(6).

(3)If the company makes a payment in contravention of sub-paragraph (1) otherwise than in pursuance of an order of the court—

(a)the company is liable to a fine, and

(b)if any officer of the company authorised or permitted the contravention, without reasonable excuse, he is liable to imprisonment or a fine, or both.

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Amendments (Textual)

F51Sch. A1 inserted (11.5.2001 so far as is necessary to give effect to Sch. A1 paras. 5, 45(1)-(3)(5) and 1.1.2003 in so far as not already in force) by 2000 c. 39, s. 1, Sch. 1 para. 4; S.I. 2001/1751, art. 2; S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

Disposal of charged property, etc.E+W+S

F5220(1)This paragraph applies where—E+W+S

(a)any property of the company is subject to a security, or

(b)any goods are in the possession of the company under a hire-purchase agreement.

(2)If the holder of the security consents, or the court gives leave, the company may dispose of the property as if it were not subject to the security.

(3)If the owner of the goods consents, or the court gives leave, the company may dispose of the goods as if all rights of the owner under the hire-purchase agreement were vested in the company.

(4)Where property subject to a security which, as created, was a floating charge is disposed of under sub-paragraph (2), 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)Sub-paragraph (6) applies to the disposal under sub-paragraph (2) or (as the case may be) sub-paragraph (3) of—

(a)any property subject to a security other than a security which, as created, was a floating charge, or

(b)any goods in the possession of the company under a hire-purchase agreement.

(6)It shall be a condition of any consent or leave under sub-paragraph (2) or (as the case may be) sub-paragraph (3) that—

(a)the net proceeds of the disposal, and

(b)where those proceeds are less than such amount as may be agreed, or 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.

(7)Where a condition imposed in pursuance of sub-paragraph (6) relates to two or more securities, that condition requires—

(a)the net proceeds of the disposal, and

(b)where paragraph (b) of sub-paragraph (6) applies, the sums mentioned in that paragraph,

to be applied towards discharging the sums secured by those securities in the order of their priorities.

(8)Where the court gives leave for a disposal under sub-paragraph (2) or (3), the directors shall, within 14 days after leave is given, send [F53a copy] of the order giving leave to the registrar of companies.

(9)If the directors without reasonable excuse fail to comply with sub-paragraph (8), they are liable to a fine.

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Amendments (Textual)

F52Sch. A1 inserted (11.5.2001 so far as is necessary to give effect to Sch. A1 paras. 5, 45(1)-(3)(5) and 1.1.2003 in so far as not already in force) by 2000 c. 39, s. 1, Sch. 1 para. 4; S.I. 2001/1751, art. 2; S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F53Words in Sch. A1 para. 20(8) 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(4)(b)} (with art. 10, Sch. 1 para. 84)

Modifications etc. (not altering text)

C6Sch. A1 para. 20 excluded (26.12.2003) by The Financial Collateral Arrangements (No.2) Regulations 2003 (S.I. 2003/3226, reg. 8(5)

F5421(1)Where property is disposed of under paragraph 20 in its application to Scotland, the company shall grant to the disponee an appropriate document of transfer or conveyance of the property, andE+W+S

(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 are disposed of under paragraph 20 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.

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Amendments (Textual)

F54Sch. A1 inserted (11.5.2001 so far as is necessary to give effect to Sch. A1 paras. 5, 45(1)-(3)(5) and 1.1.2003 in so far as not already in force) by 2000 c. 39, s. 1, Sch. 1 para. 4; S.I. 2001/1751, art. 2; S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F5522(1)If the company—E+W+S

(a)without any consent or leave under paragraph 20, disposes of any of its property which is subject to a security otherwise than in accordance with the terms of the security,

(b)without any consent or leave under paragraph 20, disposes of any goods in the possession of the company under a hire-purchase agreement otherwise than in accordance with the terms of the agreement, or

(c)fails to comply with any requirement imposed by paragraph 20 or 21,

it is liable to a fine.

(2)If any officer of the company, without reasonable excuse, authorises or permits any such disposal or failure to comply, he is liable to imprisonment or a fine, or both.

Annotations: Help about Annotation
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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Amendments (Textual)

F55Sch. A1 inserted (11.5.2001 so far as is necessary to give effect to Sch. A1 paras. 5, 45(1)-(3)(5) and 1.1.2003 in so far as not already in force) by 2000 c. 39, s. 1, Sch. 1 para. 4; S.I. 2001/1751, art. 2; S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

Market contracts, etc.E+W+S

F5623(1)If the company enters into any transaction to which this paragraph applies—E+W+S

(a)the company is liable to a fine, and

(b)if any officer of the company, without reasonable excuse, authorised or permitted the company to enter into the transaction, he is liable to imprisonment or a fine, or both.

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

(a)enters into a market contract, F57. . .

(b)gives a transfer order,

(c)grants a market charge F57. . . or a system-charge, or

(d)provides any collateral security.

(3)The fact that a company enters into a transaction in contravention of this paragraph does not—

(a)make the transaction void, or

(b)make it to any extent unenforceable by or against the company.

(4)Where during the moratorium a company enters into a transaction to which this paragraph applies, nothing done by or in pursuance of the transaction is to be treated as done in contravention of paragraphs 12(1)(g), 14 or 16 to 22.

(5)Paragraph 20 does not apply in relation to any property which is subject to a market charge, F57. . . a system-charge or a collateral security charge.

(6)In this paragraph, “transfer order”, “collateral security” and “collateral security charge” have the same meanings as in the settlement finality regulations.

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Amendments (Textual)

F56Sch. A1 inserted (11.5.2001 so far as is necessary to give effect to Sch. A1 paras. 5, 45(1)-(3)(5) and 1.1.2003 so far as not already in force) by 2000 c. 39, s. 1, Sch. 1 para. 4; S.I. 2001/1751, art. 2; S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F57Words in Sch. A1 para. 23(2)(a)(c)(5) omitted (3.7.2002) by virtue of S.I. 2002/1555, art. 28(4)(a)(b)(c)

Part IVE+W+S Nominees

Monitoring of company’s activitiesE+W+S

F5824(1)During a moratorium, the nominee shall monitor the company’s affairs for the purpose of forming an opinion as to whether—E+W+S

(a)the proposed voluntary arrangement or, if he has received notice of proposed modifications under paragraph 31(7), the proposed arrangement with those modifications has a reasonable prospect of being approved and implemented, and

(b)the company is likely to have sufficient funds available to it during the remainder of the moratorium to enable it to continue to carry on its business.

(2)The directors shall submit to the nominee any information necessary to enable him to comply with sub-paragraph (1) which he requests from them.

(3)In forming his opinion on the matters mentioned in sub-paragraph (1), the nominee is entitled to rely on the information submitted to him under sub-paragraph (2) unless he has reason to doubt its accuracy.

(4)The reference in sub-paragraph (1)(b) to the company’s business is to that business as the company proposes to carry it on during the remainder of the moratorium.

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Amendments (Textual)

F58Sch. A1 inserted (11.5.2001 so far as is necessary to give effect to Sch. A1 paras. 5, 45(1)-(3)(5) and 1.1.2003 in so far as not already in force) by 2000 c. 39, s. 1, Sch. 1 para. 4; S.I. 2001/1751, art. 2; S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

Withdrawal of consent to actE+W+S

F5925(1)The nominee may only withdraw his consent to act in the circumstances mentioned in this paragraph.E+W+S

(2)The nominee must withdraw his consent to act if, at any time during a moratorium—

(a)he forms the opinion that—

(i)the proposed voluntary arrangement or, if he has received notice of proposed modifications under paragraph 31(7), the proposed arrangement with those modifications no longer has a reasonable prospect of being approved or implemented, or

(ii)the company will not have sufficient funds available to it during the remainder of the moratorium to enable it to continue to carry on its business,

(b)he becomes aware that, on the date of filing, the company was not eligible for a moratorium, or

(c)the directors fail to comply with their duty under paragraph 24(2).

(3)The reference in sub-paragraph (2)(a)(ii) to the company’s business is to that business as the company proposes to carry it on during the remainder of the moratorium.

(4)If the nominee withdraws his consent to act, the moratorium comes to an end.

(5)If the nominee withdraws his consent to act he must, in accordance with the rules, notify the court, the registrar of companies, the company and any creditor of the company of whose claim he is aware of his withdrawal and the reason for it.

(6)If the nominee without reasonable excuse fails to comply with sub-paragraph (5), he is liable to a fine.

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Amendments (Textual)

F59Sch. A1 inserted (11.5.2001 so far as is necessary to give effect to Sch. A1 paras. 5, 45(1)-(3)(5) and 1.1.2003 in so far as not already in force) by 2000 c. 39, s. 1, Sch. 1 para. 4; S.I. 2001/1751, art. 2; S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

Challenge of nominee’s actions, etc.E+W+S

F6026(1)If any creditor, director or member of the company, or any other person affected by a moratorium, is dissatisfied by any act, omission or decision of the nominee during the moratorium, he may apply to the court.E+W+S

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

(3)On an application under sub-paragraph (1) the court may—

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

(b)give him directions, or

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

(4)An order under sub-paragraph (3) may (among other things) bring the moratorium to an end and make such consequential provision as the court thinks fit.

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Amendments (Textual)

F60Sch. A1 inserted (11.5.2001 so far as is necessary to give effect to Sch. A1 paras. 5, 45(1)-(3)(5) and 1.1.2003 in so far as not already in force) by 2000 c. 39, s. 1, Sch. 1 para. 4; S.I. 2001/1751, art. 2; S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F6127(1)Where there are reasonable grounds for believing that—E+W+S

(a)as a result of any act, omission or decision of the nominee during the moratorium, the company has suffered loss, but

(b)the company does not intend to pursue any claim it may have against the nominee,

any creditor of the company may apply to the court.

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

(3)On an application under sub-paragraph (1) the court may—

(a)order the company to pursue any claim against the nominee,

(b)authorise any creditor to pursue such a claim in the name of the company, or

(c)make such other order with respect to such a claim as it thinks fit,

unless the court is satisfied that the act, omission or decision of the nominee was in all the circumstances reasonable.

(4)An order under sub-paragraph (3) may (among other things)—

(a)impose conditions on any authority given to pursue a claim,

(b)direct the company to assist in the pursuit of a claim,

(c)make directions with respect to the distribution of anything received as a result of the pursuit of a claim,

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

(5)On an application under sub-paragraph (1) the court shall have regard to the interests of the members and creditors of the company generally.

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Amendments (Textual)

F61Sch. A1 inserted (11.5.2001 so far as is necessary to give effect to Sch. A1 paras. 5, 45(1)-(3)(5) and 1.1.2003 in so far as not already in force) by 2000 c. 39, s. 1, Sch. 1 para. 4; S.I. 2001/1751, art. 2; S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

Replacement of nominee by courtE+W+S

F6228(1)The court may—E+W+S

(a)on an application made by the directors in a case where the nominee has failed to comply with any duty imposed on him under this Schedule or has died, or

(b)on an application made by the directors 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, or authorised to act as nominee, in relation to the voluntary arrangement.

(2)A person may only be appointed as a replacement nominee under this paragraph if he submits to the court a statement indicating his consent to act.

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Amendments (Textual)

F62Sch. A1 inserted (11.5.2001 so far as is necessary to give effect to Sch. A1 paras. 5, 45(1)-(3)(5) and 1.1.2003 in so far as not already in force) by 2000 c. 39, s. 1, Sch. 1 para. 4; S.I. 2001/1751, art. 2; S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

Part VE+W+S Consideration and implementation of voluntary arrangement

[F63Summoning of meetings] [F63Duty to summon company meeting and seek creditors' decision] E+W+S

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Amendments (Textual)

29(1)Where a moratorium is in force, the nominee [F64shall summon meetings of the company and its creditors for such a time, date (within the period for the time being specified in paragraph 8(3)) and place as he thinks fit.] [F64shall— E+W+S

(a)summon a meeting of the company to consider the proposed voluntary arrangement for such a time, date (within the period of time for the time being specified in paragraph 8(3)) and place as he thinks fit, and

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

[F65(2)The persons to be summoned to a creditors’ meeting under this paragraph are every creditor of the company of whose claim the nominee is aware.]

[F65(2)The decision of the company's creditors is to be made by a qualifying decision procedure.

(3)Notice of the qualifying decision procedure must be given to every creditor of the company of whose claim the nominee is aware.]

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Amendments (Textual)

F64Words in Sch. A1 para. 29(1) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(7); S.I. 2015/1329, reg. 3(d)

F65Sch. A1 para. 29(2)(3) substituted for Sch. A1 para. 29(2) (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(8); S.I. 2015/1329, reg. 3(d)

Conduct of [F66meetings] [F66company meeting and qualifying decision procedure] E+W+S

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Amendments (Textual)

F66Words in Sch. A1 para. 30 heading substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(9); S.I. 2015/1329, reg. 3(d)

30(1)Subject to the provisions of paragraphs 31 to 35, the [F67meetings summoned under paragraph 29] [F67company meeting summoned under paragraph 29 and the qualifying decision procedure instigated under that paragraph] shall be conducted in accordance with the rules.E+W+S

(2)[F68A meeting so summoned] [F68The company meeting summoned under paragraph 29] may resolve that it be adjourned (or further adjourned).

(3)After the conclusion of [F69either] [F69the 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.

[F70(4)After the company's creditors have decided whether to approve the proposed voluntary arrangement the nominee must—

(a)report the decision to the court, and

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

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Amendments (Textual)

F67Words in Sch. A1 para. 30(1) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(10); S.I. 2015/1329, reg. 3(d)

F68Words in Sch. A1 para. 30(2) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(11); S.I. 2015/1329, reg. 3(d)

F69Words in Sch. A1 para. 30(3) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(12); S.I. 2015/1329, reg. 3(d)

F70Sch. A1 para. 30(4) inserted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(13); S.I. 2015/1329, reg. 3(d)

Approval of voluntary arrangementE+W+S

31[F71(1)The meetings summoned under paragraph 29 shall decide whether to approve the proposed voluntary arrangement (with or without modifications).]E+W+S

[F71(1)This paragraph applies where under paragraph 29—

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

(b)the nominee seeks a decision from the company's creditors as to whether they 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, or authorised to act as nominee, in relation to the voluntary arrangement.

(3)The modifications shall not include one by virtue of which the proposal ceases to be a proposal such as is mentioned in section 1.

(4)[F72A meeting summoned under paragraph 29 shall not] [F72Neither 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.

(5)Subject to sub-paragraph (6), [F73a meeting so summoned shall not] [F73neither 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, F74...

[F75(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 [F76an ordinary preferential debt] that bears to that debt a smaller proportion than is borne to [F77another ordinary] preferential debt by the amount that is to be paid in respect of that other debt [F78, or

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

(6)[F79The meeting may approve such a proposal or modification] [F79Such a proposal or modification may be approved] with the concurrence of the preferential creditor concerned.

(7)The directors of the company may, before the beginning of the [F80period of seven days which ends with the meetings (or either of them) summoned under paragraph 29 being held] [F80relevant period] , give notice to the nominee of any modifications of the proposal for which the directors intend to seek the approval of [F81those meetings] [F81the company and its creditors] .

[F82(7A)The “relevant period” is—

(a)in relation to the company, the period of seven days ending with the company meeting summoned under paragraph 29 being held;

(b)in relation to the company's creditors, the period of 14 days ending with the end of the period mentioned in paragraph 8(3).

(7B)Where under sub-paragraph (7) the nominee is given notice of proposed modifications, the nominee must seek a decision from the company's creditors (using a qualifying decision procedure) as to whether the proposed voluntary arrangement should be approved with those modifications.]

(8)References in this paragraph to preferential debts [F83, ordinary preferential debts, secondary preferential debts] and preferential creditors are to be read in accordance with section 386 in Part XII of this Act.

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Amendments (Textual)

F71Sch. A1 para. 31(1)(1A) substituted for Sch. A1 para. 31(1) (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(14); S.I. 2015/1329, reg. 3(d)

F72Words in Sch. A1 para. 31(4) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(15); S.I. 2015/1329, reg. 3(d)

F73Words in Sch. A1 para. 31(5) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(16); S.I. 2015/1329, reg. 3(d)

F79Words in Sch. A1 para. 31(6) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(17); S.I. 2015/1329, reg. 3(d)

F80Words in Sch. A1 para. 31(7) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(18)(a); S.I. 2015/1329, reg. 3(d)

F81Words in Sch. A1 para. 31(7) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(18)(b); S.I. 2015/1329, reg. 3(d)

F82Sch. A1 para. 31(7A)(7B) inserted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(19); S.I. 2015/1329, reg. 3(d)

Extension of moratoriumE+W+S

32(1)Subject to sub-paragraph (2), a [F84company] meeting summoned under paragraph 29 which resolves that it be adjourned (or further adjourned) may resolve that the moratorium be extended (or further extended), with or without conditions.E+W+S

[F85(1A)Subject to sub-paragraph (2) the company's creditors may, by a qualifying decision procedure, decide to extend (or further extend) the moratorium, with or without conditions.]

[F86(2)The moratorium may not be extended (or further extended) to a day later than the end of the period of two months which begins—

(a)where both meetings summoned under paragraph 29 are first held on the same day, with that day,

(b)in any other case, with the day on which the later of those meetings is first held.]

[F86(2)The moratorium may not be extended (or further extended) to a day later than the end of the period of two months beginning with the day after the last day of the period mentioned in paragraph 8(3).]

(3)[F87At any meeting where] [F87Where] it is proposed to extend (or further extend) the moratorium, before a decision is taken with respect to that proposal, the nominee shall inform the meeting [F88of the company or (as the case may be) inform the company's creditors]

(a)of what he has done in order to comply with his duty under paragraph 24 and the cost of his actions for the company, and

(b)of what he intends to do to continue to comply with that duty if the moratorium is extended (or further extended) and the expected cost of his actions for the company.

(4)Where, in accordance with sub-paragraph (3)(b), the nominee informs a meeting [F89of the company or informs the company's creditors,] of the expected cost of his intended actions, the meeting shall resolve [F90, or (as the case may be) the creditors by a qualifying decision procedure shall decide,] whether or not to approve that expected cost.

(5)If a decision not to approve the expected cost of the nominee’s intended actions has effect under paragraph 36, the moratorium comes to an end.

(6)A meeting [F91may resolve] [F91of the company may resolve, and the creditors by a qualifying decision procedure may decide,] that a moratorium which has been extended (or further extended) be brought to an end before the end of the period of the extension (or further extension).

(7)The Secretary of State may by order increase or reduce the period for the time being specified in sub-paragraph (2).

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Amendments (Textual)

F84Word in Sch. A1 para. 32(1) inserted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(20); S.I. 2015/1329, reg. 3(d)

F85Sch. A1 para. 32(1A) inserted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(21); S.I. 2015/1329, reg. 3(d)

F86Sch. A1 para. 32(2) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(22); S.I. 2015/1329, reg. 3(d)

F87Word in Sch. A1 para. 32(3) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(23)(a); S.I. 2015/1329, reg. 3(d)

F88Words in Sch. A1 para. 32(3) inserted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(23)(b); S.I. 2015/1329, reg. 3(d)

F89Words in Sch. A1 para. 32(4) inserted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(24)(a); S.I. 2015/1329, reg. 3(d)

F90Words in Sch. A1 para. 32(4) inserted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(24)(b); S.I. 2015/1329, reg. 3(d)

F91Words in Sch. A1 para. 32(6) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(25); S.I. 2015/1329, reg. 3(d)

33(1)The conditions which may be imposed when a moratorium is extended (or further extended) include a requirement that the nominee 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.E+W+S

(2)A person may only be appointed as a replacement nominee by virtue of sub-paragraph (1) if he submits to the court a statement indicating his consent to act.

(3)[F92At any meeting where] [F92Where] it is proposed to appoint a replacement nominee as a condition of extending (or further extending) the moratorium—

(a)the duty imposed by paragraph 32(3)(b) on the nominee shall instead be imposed on the person proposed as the replacement nominee, and

(b)paragraphs 32(4) and (5) and 36(1)(e) apply as if the references to the nominee were to that person.

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Amendments (Textual)

F92Word in Sch. A1 para. 33(3) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(26); S.I. 2015/1329, reg. 3(d)

F9334(1)If a decision to extend, or further extend, the moratorium takes effect under paragraph 36, the nominee shall, in accordance with the rules, notify the registrar of companies and the court.E+W+S

(2)If the moratorium is extended, or further extended, by virtue of an order under paragraph 36(5), the nominee shall, in accordance with the rules, send [F94a copy] of the order to the registrar of companies.

(3)If the nominee without reasonable excuse fails to comply with this paragraph, he is liable to a fine.

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Amendments (Textual)

F93Sch. A1 inserted (11.5.2001 so far as is necessary to give effect to Sch. A1 paras. 5, 45(1)-(3)(5) and 1.1.2003 in so far as not already in force) by 2000 c. 39, s. 1, Sch. 1 para. 4; S.I. 2001/1751, art. 2; S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F94Words in Sch. A1 para. 34(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. 71(4)(b)} (with art. 10, Sch. 1 para. 84)

Moratorium committeeE+W+S

35[F95(1)A meeting summoned under paragraph 29 which resolves that the moratorium be extended (or further extended) may, with the consent of the nominee, resolve that a committee be established to exercise the functions conferred on it by the meeting.E+W+S

(2)The meeting may not so resolve unless it has approved an estimate of the expenses to be incurred by the committee in the exercise of the proposed functions.]

[F95(1)This paragraph applies where in accordance with paragraph 32 a meeting of the company resolves, or the company's creditors decide, that the moratorium be extended (or further extended).

(1A)The meeting may resolve, and the company's creditors may by a qualifying decision procedure decide, that a committee be established to exercise the functions conferred on it by the meeting or (as the case may be) by the company's creditors.

(2)The meeting may resolve that such a committee be established only if—

(a)the nominee consents, and

(b)the meeting approves an estimate of the expenses to be incurred by the committee in the exercise of the proposed functions.

(2A)A decision of the company's creditors that such a committee be established is to be taken as made only if—

(a)the nominee consents, and

(b)the creditors by a qualifying decision procedure approve an estimate of the expenses to be incurred by the committee in the exercise of the proposed functions.]

(3)Any expenses, not exceeding the amount of the estimate, incurred by the committee in the exercise of its functions shall be reimbursed by the nominee.

(4)The committee shall cease to exist when the moratorium comes to an end.

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Amendments (Textual)

F95Sch. A1 para. 35(1)-(2A) substituted for Sch. A1 para. 35(1)(2) (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(27); S.I. 2015/1329, reg. 3(d)

Effectiveness of decisionsE+W+S

36(1)Sub-paragraph (2) applies to references to one of the following decisions having effect, that is, a decision, under paragraph 31, 32 or 35, with respect to—E+W+S

(a)the approval of a proposed voluntary arrangement,

(b)the extension (or further extension) of a moratorium,

(c)the bringing of a moratorium to an end,

(d)the establishment of a committee, or

(e)the approval of the expected cost of a nominee’s intended actions.

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

(a)it has been taken by [F96both meetings summoned under paragraph 29] [F96the meeting of the company summoned under paragraph 29 and by the company's creditors] , or

(b)(subject to any order made under sub-paragraph (5)) it has been taken by the [F97creditors’ meeting summoned under that paragraph] [F97company's creditors] .

(3)If a decision taken by the [F98creditors’ meeting] [F98company's creditors] under any of paragraphs 31, 32 or 35 with respect to any of the matters mentioned in sub-paragraph (1) differs from one so taken by the company meeting with respect to that matter, a member of the company may apply to the court.

(4)An application under sub-paragraph (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 [F99creditors’ meeting] [F99company's creditors] , or

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

(5)On an application under sub-paragraph (3), the court may—

(a)order the decision of the company meeting to have effect instead of the decision of the [F100creditors’ meeting] [F100company's creditors] , or

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

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Amendments (Textual)

F96Words in Sch. A1 para. 36(2)(a) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(28)(a); S.I. 2015/1329, reg. 3(d)

F97Words in Sch. A1 para. 36(2)(b) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(28)(b); S.I. 2015/1329, reg. 3(d)

F98Words in Sch. A1 para. 36(3) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(29); S.I. 2015/1329, reg. 3(d)

F99Words in Sch. A1 para. 36(4)(a) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(29); S.I. 2015/1329, reg. 3(d)

F100Words in Sch. A1 para. 36(5)(a) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(29); S.I. 2015/1329, reg. 3(d)

Effect of approval of voluntary arrangementE+W+S

37(1)This paragraph applies where a decision approving a voluntary arrangement has effect under paragraph 36.E+W+S

(2)The approved voluntary arrangement—

(a)takes effect as if made by the company at the [F101creditors’ meeting] [F101time the creditors decided to approve the voluntary arrangement] , and

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

(i)was entitled to vote [F102at that meeting (whether or not he was present or represented at it)] [F102in 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.

(3)If—

(a)when the arrangement ceases to have effect any amount payable under the arrangement to a person bound by virtue of sub-paragraph (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.

(4)Where a petition for the winding up of the company, other than an excepted petition within the meaning of paragraph 12, was presented before the beginning of the moratorium, the court shall dismiss the petition.

(5)The court shall not dismiss a petition under sub-paragraph (4)—

(a)at any time before the end of the period of 28 days beginning with the first day on which each of the reports [F103of the meetings] required by paragraph 30(3) [F104and (4)] has been made to the court, or

(b)at any time when an application under paragraph 38 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.

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Amendments (Textual)

F101Words in Sch. A1 para. 37(2)(a) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(30)(a); S.I. 2015/1329, reg. 3(d)

F102Words in Sch. A1 para. 37(2)(b)(i) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(30)(b); S.I. 2015/1329, reg. 3(d)

F103Words in Sch. A1 para. 37(5)(a) omitted (26.5.2015 for specified purposes) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(31)(a); S.I. 2015/1329, reg. 3(d)

F104Words in Sch. A1 para. 37(5)(a) inserted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(31)(b); S.I. 2015/1329, reg. 3(d)

Challenge of decisionsE+W+S

38(1)Subject to the following provisions of this paragraph, any of the persons mentioned in sub-paragraph (2) may apply to the court on one or both of the following grounds—E+W+S

(a)that a voluntary arrangement [F105approved at one or both of the meetings summoned under paragraph 29 and which has taken effect] [F105which has taken effect under paragraph 37] 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 [F106either of those meetings] [F106the meeting of the company summoned under paragraph 29, or in relation to the relevant qualifying decision procedure] .

[F107(1A)In this paragraph—

(a)the “relevant qualifying decision procedure” means the qualifying decision procedure in which the creditors decided whether to approve the 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 this paragraph are—

(a)a person entitled, in accordance with the rules, to vote at [F108either of the meetings] [F108the meeting of the company or in the relevant qualifying decision procedure] ,

(b)a person who would have been entitled, in accordance with the rules, to vote [F109at the creditors’ meeting] [F109in the relevant qualifying decision procedure] if he had had notice of it, and

(c)the nominee.

(3)An application under this paragraph shall not be made—

(a)after the end of the period of 28 days beginning with the first day on which each of the reports required by paragraph 30(3) [F110and (4)] has been made to the court, or

(b)in the case of a person who was not given notice of the [F111creditors’ meeting] [F111relevant qualifying decision procedure] , after the end of the period of 28 days beginning with the day on which he became aware that [F112the meeting] [F112the relevant qualifying decision procedure] had taken place,

but (subject to that) an application made by a person within sub-paragraph (2)(b) on the ground that the 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 an application under this paragraph the court is satisfied as to either of the grounds mentioned in sub-paragraph (1), it may do any of the following—

(a)revoke or suspend—

(i)any decision approving the voluntary arrangement which has effect under paragraph 36, or

(ii)in a case falling within sub-paragraph (1)(b), any decision taken by the meeting [F113in question] [F113of the company, or in the relevant qualifying decision procedure,] which has effect under that paragraph,

(b)give a direction to any person—

(i)for the summoning of [F114further meetings] [F114a further company meeting] to consider any revised proposal for a voluntary arrangement which the directors may make, or

(ii)in a case falling within sub-paragraph (1)(b) [F115and relating to the company meeting] , for the summoning of a further company [F116or (as the case may be) creditors’] meeting to reconsider the original proposal.

[F117(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 for a voluntary arrangement which the directors may make, or

(ii)in a case falling within sub-paragraph (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 sub-paragraph (4)(b)(i) [F118or (c)(i)] the court is satisfied that the directors do not intend to submit a revised proposal, the court shall revoke the direction and revoke or suspend any decision approving the voluntary arrangement which has effect under paragraph 36.

(6)Where the court gives a direction under sub-paragraph (4)(b) [F119or (c)] , 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 of the moratorium.

(7)Sub-paragraph (8) applies in a case where the court, on an application under this paragraph—

(a)gives a direction under sub-paragraph (4)(b) [F120or (c)] , or

(b)revokes or suspends a decision under sub-paragraph (4)(a) or (5).

(8)In such a case, the court may give such supplemental directions as it thinks fit and, in particular, directions with respect to—

(a)things done under the voluntary arrangement since it took effect, and

(b)such things done since that time as could not have been done if a moratorium had been in force in relation to the company when they were done.

(9)Except in pursuance of the preceding provisions of this paragraph,

[F121(a)]a decision taken at a [F122company] meeting summoned under paragraph 29 is not invalidated by any irregularity at or in relation to the meeting.[F123, 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.]

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Amendments (Textual)

F105Words in Sch. A1 para. 38(1)(a) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(32)(a); S.I. 2015/1329, reg. 3(d)

F106Words in Sch. A1 para. 38(1)(b) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(32)(b); S.I. 2015/1329, reg. 3(d)

F107Sch. A1 para. 38(1A) inserted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(33); S.I. 2015/1329, reg. 3(d)

F108Words in Sch. A1 para. 38(2)(a) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(34)(a); S.I. 2015/1329, reg. 3(d)

F109Words in Sch. A1 para. 38(2)(b) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(34)(b); S.I. 2015/1329, reg. 3(d)

F110Words in Sch. A1 para. 38(3)(a) inserted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(35); S.I. 2015/1329, reg. 3(d)

F111Words in Sch. A1 para. 38(3)(b) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(36)(a); S.I. 2015/1329, reg. 3(d)

F112Words in Sch. A1 para. 38(3)(b) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(36)(b); S.I. 2015/1329, reg. 3(d)

F113Words in Sch. A1 para. 38(4)(a)(ii) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(37); S.I. 2015/1329, reg. 3(d)

F114Words in Sch. A1 para. 38(4)(b) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(38)(a); S.I. 2015/1329, reg. 3(d)

F115Words in Sch. A1 para. 38(4)(b) inserted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(38)(b); S.I. 2015/1329, reg. 3(d)

F116Words in Sch. A1 para. 38(4)(b) omitted (26.5.2015 for specified purposes) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(38)(c); S.I. 2015/1329, reg. 3(d)

F117Sch. A1 para. 38(4)(c) inserted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(39); S.I. 2015/1329, reg. 3(d)

F118Words in Sch. A1 para. 38(5) inserted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(40); S.I. 2015/1329, reg. 3(d)

F119Words in Sch. A1 para. 38(6) inserted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(41); S.I. 2015/1329, reg. 3(d)

F120Words in Sch. A1 para. 38(7)(a) inserted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(41); S.I. 2015/1329, reg. 3(d)

F121Words in Sch. A1 para. 38(9) renumbered as Sch. A1 para. 38(9)(a) (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(42)(a); S.I. 2015/1329, reg. 3(d)

F122Word in Sch. A1 para. 38(9)(a) inserted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(42)(b); S.I. 2015/1329, reg. 3(d)

F123Sch. A1 para. 38(9)(b) and word inserted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(42)(c); S.I. 2015/1329, reg. 3(d)

Implementation of voluntary arrangementE+W+S

39(1)This paragraph applies where a voluntary arrangement [F124approved by one or both of the meetings summoned under paragraph 29 has taken effect.] [F124has taken effect under paragraph 37.] E+W+S

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

(a)by virtue of the approval of the arrangement, on the nominee, or

(b)by virtue of paragraph 31(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.

(4)On an application under sub-paragraph (3) 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.

(5)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.

(6)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, or authorised to act as supervisor, in relation to the voluntary arrangement, either in substitution for the existing supervisor or to fill a vacancy.

(7)The power conferred by sub-paragraph (6) 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.

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Amendments (Textual)

F124Words in Sch. A1 para. 39(1) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(43); S.I. 2015/1329, reg. 3(d)

Part VIE+W+S Miscellaneous

Challenge of directors’ actionsE+W+S

40(1)This paragraph applies in relation to acts or omissions of the directors of a company during a moratorium.E+W+S

(2)A creditor or member of the company may apply to the court for an order under this paragraph on the ground—

(a)that the company’s affairs, business and property are being or have been managed by the directors in a manner which is unfairly prejudicial to the interests of its creditors or members generally, or of some part of its creditors or members (including at least the petitioner), or

(b)that any actual or proposed act or omission of the directors is or would be so prejudicial.

(3)An application for an order under this paragraph may be made during or after the moratorium.

(4)On an application for an order under this paragraph the court may—

(a)make such order as it thinks fit for giving relief in respect of the matters complained of,

(b)adjourn the hearing conditionally or unconditionally, or

(c)make an interim order or any other order that it thinks fit.

(5)An order under this paragraph 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 petitioner, or to do an act which the petitioner has complained they have omitted to do,

(c)require the summoning of a meeting of [F125creditors or] members for the purpose of considering such matters as the court may direct,

[F126(ca)require a decision of the company's creditors to be sought (using a qualifying decision procedure) on such matters as the court may direct,]

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

(6)In making an order under this paragraph the court shall have regard to the need to safeguard the interests of persons who have dealt with the company in good faith and for value.

[F127(7)Sub-paragraph (8) applies where—

[F128(a)the appointment of an administrator has effect in relation to the company and that appointment was in pursuance of—

(i)an administration application made, or

(ii)a notice of intention to appoint filed,

before the moratorium came into force, or]

(b)the company is being wound up in pursuance of a petition presented before the moratorium came into force.

(8)No application for an order under this paragraph may be made by a creditor or member of the company; but such an application may be made instead by the administrator or (as the case may be) the liquidator.]

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Amendments (Textual)

F125Words in Sch. A1 para. 40(5)(c) omitted (26.5.2015 for specified purposes) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(44)(a); S.I. 2015/1329, reg. 3(d)

F126Sch. A1 para. 40(5)(ca) inserted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(44)(b); S.I. 2015/1329, reg. 3(d)

F127Sch. A1 para. 40(7)(8) substituted (15.9.2003) for Sch. A1 para. 40(7) by 2002 c. 40, ss. 248(3), 279, Sch. 17 para. 37(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))

F128Sch. A1 para. 40(7)(a) substituted (15.10.2004) by The Enterprise Act 2002 (Insolvency) Order 2004 (S.I. 2004/2312), art. 2

OffencesE+W+S

F12941(1)This paragraph applies where a moratorium has been obtained for a company.E+W+S

(2)If, within the period of 12 months ending with the day on which the moratorium came into force, a person who was at the time an officer of the company—

(a)did any of the things mentioned in paragraphs (a) to (f) of sub-paragraph (4), or

(b)was privy to the doing by others of any of the things mentioned in paragraphs (c), (d) and (e) of that sub-paragraph,

he is to be treated as having committed an offence at that time.

(3)If, at any time during the moratorium, a person who is an officer of the company—

(a)does any of the things mentioned in paragraphs (a) to (f) of sub-paragraph (4), or

(b)is privy to the doing by others of any of the things mentioned in paragraphs (c), (d) and (e) of that sub-paragraph,

he commits an offence.

(4)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, or

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

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

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

(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).

(5)For the purposes of this paragraph, “officer” includes a shadow director.

(6)It is a defence—

(a)for a person charged under sub-paragraph (2) or (3) in respect of the things mentioned in paragraph (a) or (f) of sub-paragraph (4) to prove that he had no intent to defraud, and

(b)for a person charged under sub-paragraph (2) or (3) in respect of the things mentioned in paragraph (c) or (d) of sub-paragraph (4) to prove that he had no intent to conceal the state of affairs of the company or to defeat the law.

(7)Where a person pawns, pledges or disposes of any property of a company in circumstances which amount to an offence under sub-paragraph (2) or (3), every person who takes in pawn or pledge, or otherwise receives, the property knowing it to be pawned, pledged or disposed of in circumstances which—

(a)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 sub-paragraph (2), or

(b)amount to an offence under sub-paragraph (3),

commits an offence.

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

(9)The money sums specified in paragraphs (a) and (b) of sub-paragraph (4) are subject to increase or reduction by order under section 417A in Part XV.

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Amendments (Textual)

F129Sch. A1 inserted (11.5.2001 so far as is necessary to give effect to Sch. A1 paras. 5, 45(1)-(3)(5) and 1.1.2003 in so far as not already in force) by 2000 c. 39, s. 1, Sch. 1 para. 4; S.I. 2001/1751, art. 2; S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

F13042(1)If, for the purpose of obtaining a moratorium, or an extension of a moratorium, for a company, a person who is an officer of the company—E+W+S

(a)makes any false representation, or

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

he commits an offence.

(2)Sub-paragraph (1) applies even if no moratorium or extension is obtained.

(3)For the purposes of this paragraph, “officer” includes a shadow director.

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

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Amendments (Textual)

F130Sch. A1 inserted (11.5.2001 so far as is necessary to give effect to Sch. A1 paras. 5, 45(1)-(3)(5) and 1.1.2003 in so far as not already in force) by 2000 c. 39, s. 1, Sch. 1 para. 4; S.I. 2001/1751, art. 2; S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

Void provisions in floating charge documentsE+W+S

F13143(1)A provision in an instrument creating a floating charge is void if it provides for—E+W+S

(a)obtaining a moratorium, or

(b)anything done with a view to obtaining a moratorium (including any preliminary decision or investigation),

to be an event causing the floating charge to crystallise or causing restrictions which would not otherwise apply to be imposed on the disposal of property by the company or a ground for the appointment of a receiver.

(2)In sub-paragraph (1), “receiver” includes a manager and a person who is appointed both receiver and manager.

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Amendments (Textual)

F131Sch. A1 inserted (11.5.2001 so far as is necessary to give effect to Sch. A1 paras. 5, 45(1)-(3)(5) and 1.1.2003 in so far as not already in force) by 2000 c. 39, s. 1, Sch. 1 para. 4; S.I. 2001/1751, art. 2; S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

Functions of the [F132Financial Conduct Authority and Prudential Regulation Authority] E+W+S

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Amendments (Textual)

F132Words in Sch. A1 para. 44 cross-heading substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 18 para. 54(16) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

44(1)This Schedule has effect in relation to a moratorium for a regulated company with the modifications in sub-paragraphs (2) to (16) below.E+W+S

(2)Any notice or other document required by virtue of this Schedule to be sent to a creditor of a regulated company must also be sent to the [F133appropriate regulator].

(3)The [F133appropriate regulator] is entitled to be heard on any application to the court for leave under paragraph 20(2) or 20(3) (disposal of charged property, etc.).

(4)Where paragraph 26(1) (challenge of nominee’s actions, etc.) applies, the persons who may apply to the court include the [F133appropriate regulator].

(5)If a person other than [F134a regulator] applies to the court under that paragraph, [F135the appropriate regulator] is entitled to be heard on the application.

(6)Where paragraph 27(1) (challenge of nominee’s actions, etc.) applies, the persons who may apply to the court include the [F136appropriate regulator].

(7)If a person other than [F137a regulator] applies to the court under that paragraph, [F138the appropriate regulator] is entitled to be heard on the application.

[F139(8)The persons to be summoned to a creditors’ meeting under paragraph 29 include the [F140appropriate regulator].]

[F139(8)The appropriate regulator must be given notice of any qualifying decision procedure by which a decision of the company's creditors is sought for the purposes of this Schedule.

(8A)The appropriate regulator, or a person appointed by the appropriate regulator, may in the way provided for by the rules participate in (but not vote in) any qualifying decision procedure by which a decision of the company's creditors is sought for the purposes of this Schedule.]

(9)A person appointed for the purpose by the [F140appropriate regulator] is entitled to attend and participate in (but not to vote at)—

(a)[F141any creditors’ meeting summoned under that paragraph,]

(b)any meeting of a committee established under paragraph 35 (moratorium committee).

(10)The [F140appropriate regulator] is entitled to be heard on any application under paragraph 36(3) (effectiveness of decisions).

(11)Where paragraph 38(1) (challenge of decisions) applies, the persons who may apply to the court include the [F140appropriate regulator].

(12)If a person other than [F142a regulator] applies to the court under that paragraph, [F143the appropriate regulator] is entitled to be heard on the application.

(13)Where paragraph 39(3) (implementation of voluntary arrangement) applies, the persons who may apply to the court include the [F144appropriate regulator].

(14)If a person other than [F145a regulator] applies to the court under that paragraph, [F146the appropriate regulator] is entitled to be heard on the application.

(15)Where paragraph 40(2) (challenge of directors’ actions) applies, the persons who may apply to the court include the [F147appropriate regulator].

(16)If a person other than [F148a regulator] applies to the court under that paragraph, [F149the appropriate regulator] is entitled to be heard on the application.

[F150(16A)If either regulator makes an application to the court under any of the provisions mentioned in sub-paragraphs (5), (7), (12), (14) or (16) in relation to a PRA-regulated company, the other regulator is entitled to be heard on the application.]

(17)This paragraph does not prejudice any right the [F151appropriate regulator] has (apart from this paragraph) as a creditor of a regulated company.

[F152(17A)The appropriate regulator” means—

(a)for the purposes of sub-paragraphs (2) to (8) and (10) to (17)—

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

(ii)in any other case, the Financial Conduct Authority;

(b)for the purposes of [F153sub-paragraph] [F153sub-paragraphs (8A) and] (9)—

(i)where the regulated company is a PRA-regulated company, the Financial Conduct Authority or the Prudential Regulation Authority, and

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

(18)In this paragraph—

  • [F154PRA-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 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 in contravention of the general prohibition;]

  • regulated company” means a company which—

    (a)

    is, or has been, an authorised person within the meaning given by section 31 of the M6Financial 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, within the meaning given by section 22 of that Act, in contravention of the general prohibition within the meaning given by section 19 of that Act.

  • [F155regulator” means the Financial Conduct Authority or the Prudential Regulation Authority.]

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Amendments (Textual)

F133Words in Sch. A1 para. 44(2)-(4) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 18 para. 54(2) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F134Words in Sch. A1 para. 44(5) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 18 para. 54(3)(a) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F135Words in Sch. A1 para. 44(5) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 18 para. 54(3)(b) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F136Words in Sch. A1 para. 44(6) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 18 para. 54(4) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F137Words in Sch. A1 para. 44(7) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 18 para. 54(5)(a) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F138Words in Sch. A1 para. 44(7) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 18 para. 54(5)(b) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F139Sch. A1 para. 44(8)(8A) substituted for Sch. A1 para. 44(8) (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(45); S.I. 2015/1329, reg. 3(d)

F140Words in Sch. A1 para. 44(8)-(11) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 18 para. 54(6) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F141Sch. A1 para. 44(9)(a) omitted (26.5.2015 for specified purposes) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(46); S.I. 2015/1329, reg. 3(d)

F142Words in Sch. A1 para. 44(12) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 18 para. 54(7)(a) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F143Words in Sch. A1 para. 44(12) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 18 para. 54(7)(b) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F144Words in Sch. A1 para. 44(13) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 18 para. 54(8) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F145Words in Sch. A1 para. 44(14) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 18 para. 54(9)(a) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F146Words in Sch. A1 para. 44(14) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 18 para. 54(9)(b) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F147Words in Sch. A1 para. 44(15) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 18 para. 54(10) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F148Words in Sch. A1 para. 44(16) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 18 para. 54(11)(a) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F149Words in Sch. A1 para. 44(16) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 18 para. 54(11)(b) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F151Words in Sch. A1 para. 44(17) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 18 para. 54(13) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F153Words in Sch. A1 para. 44(17A)(b) substituted (26.5.2015 for specified purposes) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 9(47); S.I. 2015/1329, reg. 3(d)

F154Words in Sch. A1 para. 44(18) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 18 para. 54(15)(a) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F155Words in Sch. A1 para. 44(18) inserted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 18 para. 54(15)(b) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

Marginal Citations

Subordinate legislationE+W+S

F15645(1)Regulations or an order made by the Secretary of State under this Schedule may make different provision for different cases.E+W+S

(2)Regulations so made may make such consequential, incidental, supplemental and transitional provision as may appear to the Secretary of State necessary or expedient.

(3)Any power of the Secretary of State to make regulations under this Schedule may be exercised by amending or repealing any enactment contained in this Act (including one contained in this Schedule) or contained in the M7Company Directors Disqualification Act 1986.

(4)Regulations (except regulations under paragraph 5) or an order made by the Secretary of State under this Schedule shall be made by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament.

(5)Regulations under paragraph 5 of this Schedule are to be made by statutory instrument and shall only be made if a draft containing the regulations has been laid before and approved by resolution of each House of Parliament.]

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Amendments (Textual)

F156Sch. A1 inserted (11.5.2001 so far as is necessary to give effect to Sch. A1 paras. 5, 45(1)-(3)(5) and 1.1.2003 in so far as not already in force) by 2000 c. 39, s. 1, Sch. 1 para. 4; S.I. 2001/1751, art. 2; S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)

Marginal Citations

[F157SCHEDULE B1E+W+S ADMINISTRATION

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Amendments (Textual)

F157Sch. B1 inserted (15.9.2003) by 2002 c. 40, ss. 248(2), 279, Sch. 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)

C8Sch. B1: specified provisions applied (with modifications) (5.10.2004) by Energy Act 2004 (c. 20), ss. 159(1), 198, Sch. 20 Pts. 1-3; S.I. 2004/2575, art. 2(1), Sch. 1

C9Sch. B1 applied (with modifications) (1.7. 2005) by S.I. 1994/2421, art. 6(1), Sch. 2 (as amended (1.7.2005) by S.I. 2005/1516, arts. 3, 7, Sch. 1 (with art. 2))

C10Sch. B1: specified provisions applied (with modifications) (1.10.2011) by Postal Services Act 2011 (c. 5), ss. 73, 93(2)(3), {Sch. 10 Pts. 1, 2}; S.I. 2011/2329, art. 3 (with arts. 4, 5)

C11Sch. B1 amendment to earlier affecting provision S.I. 1994/2421, Sch. 2 (1.4.2013) by The Financial Services Act 2012 (Consequential Amendments and Transitional Provisions) Order 2013 (S.I. 2013/472), Sch. 2 para. 11(b)

ARRANGEMENT OF SCHEDULEE+W+S

Nature of administrationParagraphs 1 to 9
Appointment of administrator by courtParagraphs 10 to 13
Appointment of administrator by holder of floating chargeParagraphs 14 to 21
Appointment of administrator by company or directorsParagraphs 22 to 34
Administration application: special casesParagraphs 35 to 39
Effect of administrationParagraphs 40 to 45
Process of administrationParagraphs 46 to 58
Functions of administratorParagraphs 59 to 75
Ending administrationParagraphs 76 to 86
Replacing administratorParagraphs 87 to 99
GeneralParagraphs 100 to 116

NATURE OF ADMINISTRATIONE+W+S

AdministrationE+W+S

1(1)For the purposes of this Act “administrator” of a company means a person appointed under this Schedule to manage the company’s affairs, business and property.

(2)For the purposes of this Act—

(a)a company is “in administration” while the appointment of an administrator of the company has effect,

(b)a company “enters administration” when the appointment of an administrator takes effect,

(c)a company ceases to be in administration when the appointment of an administrator of the company ceases to have effect in accordance with this Schedule, and

(d)a company does not cease to be in administration merely because an administrator vacates office (by reason of resignation, death or otherwise) or is removed from office.

2A person may be appointed as administrator of a company—

(a)by administration order of the court under paragraph 10,

(b)by the holder of a floating charge under paragraph 14, or

(c)by the company or its directors under paragraph 22.

Purpose of administrationE+W+S

3(1)The administrator of a company must perform his functions with the objective of—

(a)rescuing the company as a going concern, or

(b)achieving a better result for the company’s creditors as a whole than would be likely if the company were wound up (without first being in administration), or

(c)realising property in order to make a distribution to one or more secured or preferential creditors.

(2)Subject to sub-paragraph (4), the administrator of a company must perform his functions in the interests of the company’s creditors as a whole.

(3)The administrator must perform his functions with the objective specified in sub-paragraph (1)(a) unless he thinks either—

(a)that it is not reasonably practicable to achieve that objective, or

(b)that the objective specified in sub-paragraph (1)(b) would achieve a better result for the company’s creditors as a whole.

(4)The administrator may perform his functions with the objective specified in sub-paragraph (1)(c) only if—

(a)he thinks that it is not reasonably practicable to achieve either of the objectives specified in sub-paragraph (1)(a) and (b), and

(b)he does not unnecessarily harm the interests of the creditors of the company as a whole.

4The administrator of a company must perform his functions as quickly and efficiently as is reasonably practicable.

Status of administratorE+W+S

5An administrator is an officer of the court (whether or not he is appointed by the court).

General restrictionsE+W+S

6A person may be appointed as administrator of a company only if he is qualified to act as an insolvency practitioner in relation to the company.

7A person may not be appointed as administrator of a company which is in administration (subject to the provisions of paragraphs 90 to 97 and 100 to 103 about replacement and additional administrators).

8(1)A person may not be appointed as administrator of a company which is in liquidation by virtue of—E+W+S

(a)a resolution for voluntary winding up, or

(b)a winding-up order.

(2)Sub-paragraph (1)(a) is subject to paragraph 38.

(3)Sub-paragraph (1)(b) is subject to paragraphs 37 and 38.

9(1)A person may not be appointed as administrator of a company which—E+W+S

(a)has a liability in respect of a deposit which it accepted in accordance with the Banking Act 1979 (c. 37) or 1987 (c. 22), but

(b)is not an authorised deposit taker.

(2)A person may not be appointed as administrator of a company which effects or carries out contracts of insurance.

(3)But sub-paragraph (2) does not apply to a company which—

(a)is exempt from the general prohibition in relation to effecting or carrying out contracts of insurance, or

(b)is an authorised deposit taker effecting or carrying out contracts of insurance in the course of a banking business.

(4)In this paragraph—

  • authorised deposit taker” means a person with permission under Part IV of the Financial Services and Markets Act 2000 (c. 8) to accept deposits, and

  • the general prohibition” has the meaning given by section 19 of that Act.

(5)This paragraph shall be construed in accordance with—

(a)section 22 of the Financial Services and Markets Act 2000 (classes of regulated activity and categories of investment),

(b)any relevant order under that section, and

(c)Schedule 2 to that Act (regulated activities).

APPOINTMENT OF ADMINISTRATOR BY COURTE+W+S

Administration orderE+W+S

10An administration order is an order appointing a person as the administrator of a company.

Conditions for making orderE+W+S

11The court may make an administration order in relation to a company only if satisfied—

(a)that the company is or is likely to become unable to pay its debts, and

(b)that the administration order is reasonably likely to achieve the purpose of administration.

Administration applicationE+W+S

12(1)An application to the court for an administration order in respect of a company (an “administration application”) may be made only by—

(a)the company,

(b)the directors of the company,

(c)one or more creditors of the company,

(d)the [F158designated officer] for a magistrates’ court in the exercise of the power conferred by section 87A of the Magistrates’ Courts Act 1980 (c. 43) (fine imposed on company), or

(e)a combination of persons listed in paragraphs (a) to (d).

(2)As soon as is reasonably practicable after the making of an administration application the applicant shall notify—

(a)any person who has appointed an administrative receiver of the company,

(b)any person who is or may be entitled to appoint an administrative receiver of the company,

(c)any person who is or may be entitled to appoint an administrator of the company under paragraph 14, and

(d)such other persons as may be prescribed.

(3)An administration application may not be withdrawn without the permission of the court.

(4)In sub-paragraph (1) “creditor” includes a contingent creditor and a prospective creditor.

[F159(5)Sub-paragraph (1) is without prejudice to section 7(4)(b).]

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Amendments (Textual)

F158Words in Sch. B1 para. 12(1)(d) substituted (1.4.2005) by Courts Act 2003 (c. 39), ss. 109(1), 110, Sch. 8 para. 299; S.I. 2005/910, art. 3(y)

Powers of courtE+W+S

13(1)On hearing an administration application the court may—

(a)make the administration order sought;

(b)dismiss the application;

(c)adjourn the hearing conditionally or unconditionally;

(d)make an interim order;

(e)treat the application as a winding-up petition and make any order which the court could make under section 125;

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

(2)An appointment of an administrator by administration order takes effect—

(a)at a time appointed by the order, or

(b)where no time is appointed by the order, when the order is made.

(3)An interim order under sub-paragraph (1)(d) may, in particular—

(a)restrict the exercise of a power of the directors or the company;

(b)make provision conferring a discretion on the court or on a person qualified to act as an insolvency practitioner in relation to the company.

(4)This paragraph is subject to paragraph 39.

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Modifications etc. (not altering text)

C12Sch. B1 para. 13 restricted (5.10.2004) by Energy Act 2004 (c. 20), ss. 162(3), 198; S.I. 2004/2575, art. 2(1), Sch. 1

APPOINTMENT OF ADMINISTRATOR BY HOLDER OF FLOATING CHARGEE+W+S

Power to appointE+W+S

14(1)The holder of a qualifying floating charge in respect of a company’s property may appoint an administrator of the company.

(2)For the purposes of sub-paragraph (1) a floating charge qualifies if created by an instrument which—

(a)states that this paragraph applies to the floating charge,

(b)purports to empower the holder of the floating charge to appoint an administrator of the company,

(c)purports to empower the holder of the floating charge to make an appointment which would be the appointment of an administrative receiver within the meaning given by section 29(2), or

(d)purports to empower the holder of a floating charge in Scotland to appoint a receiver who on appointment would be an administrative receiver.

(3)For the purposes of sub-paragraph (1) a person is the holder of a qualifying floating charge in respect of a company’s property if he holds one or more debentures of the company secured—

(a)by a qualifying floating charge which relates to the whole or substantially the whole of the company’s property,

(b)by a number of qualifying floating charges which together relate to the whole or substantially the whole of the company’s property, or

(c)by charges and other forms of security which together relate to the whole or substantially the whole of the company’s property and at least one of which is a qualifying floating charge.

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Modifications etc. (not altering text)

C13Sch. B1 para. 14 restricted (5.10.2004) by Energy Act 2004 (c. 20), ss. 163, 198; S.I. 2004/2575, art. 2(1), Sch. 1

Restrictions on power to appointE+W+S

15(1)A person may not appoint an administrator under paragraph 14 unless—

(a)he has given at least two business days’ written notice to the holder of any prior floating charge which satisfies paragraph 14(2), or

(b)the holder of any prior floating charge which satisfies paragraph 14(2) has consented in writing to the making of the appointment.

(2)One floating charge is prior to another for the purposes of this paragraph if—

(a)it was created first, or

(b)it is to be treated as having priority in accordance with an agreement to which the holder of each floating charge was party.

(3)Sub-paragraph (2) shall have effect in relation to Scotland as if the following were substituted for paragraph (a)—

“(a)it has priority of ranking in accordance with section 464(4)(b) of the Companies Act 1985 (c. 6), ".

16An administrator may not be appointed under paragraph 14 while a floating charge on which the appointment relies is not enforceable.

17An administrator of a company may not be appointed under paragraph 14 if—

(a)a provisional liquidator of the company has been appointed under section 135, or

(b)an administrative receiver of the company is in office.

Notice of appointmentE+W+S

18(1)A person who appoints an administrator of a company under paragraph 14 shall file with the court—

(a)a notice of appointment, and

(b)such other documents as may be prescribed.

(2)The notice of appointment must include a statutory declaration by or on behalf of the person who makes the appointment—

(a)that the person is the holder of a qualifying floating charge in respect of the company’s property,

(b)that each floating charge relied on in making the appointment is (or was) enforceable on the date of the appointment, and

(c)that the appointment is in accordance with this Schedule.

(3)The notice of appointment must identify the administrator and must be accompanied by a statement by the administrator—

(a)that he consents to the appointment,

(b)that in his opinion the purpose of administration is reasonably likely to be achieved, and

(c)giving such other information and opinions as may be prescribed.

(4)For the purpose of a statement under sub-paragraph (3) an administrator may rely on information supplied by directors of the company (unless he has reason to doubt its accuracy).

(5)The notice of appointment and any document accompanying it must be in the prescribed form.

(6)A statutory declaration under sub-paragraph (2) must be made during the prescribed period.

(7)A person commits an offence if in a statutory declaration under sub-paragraph (2) he makes a statement—

(a)which is false, and

(b)which he does not reasonably believe to be true.

Commencement of appointmentE+W+S

19The appointment of an administrator under paragraph 14 takes effect when the requirements of paragraph 18 are satisfied.

20A person who appoints an administrator under paragraph 14—

(a)shall notify the administrator and such other persons as may be prescribed as soon as is reasonably practicable after the requirements of paragraph 18 are satisfied, and

(b)commits an offence if he fails without reasonable excuse to comply with paragraph (a).

Invalid appointment: indemnityE+W+S

21(1)This paragraph applies where—

(a)a person purports to appoint an administrator under paragraph 14, and

(b)the appointment is discovered to be invalid.

(2)The court may order the person who purported to make the appointment to indemnify the person appointed against liability which arises solely by reason of the appointment’s invalidity.

APPOINTMENT OF ADMINISTRATOR BY COMPANY OR DIRECTORSE+W+S

Power to appointE+W+S

22(1)A company may appoint an administrator.

(2)The directors of a company may appoint an administrator.

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Modifications etc. (not altering text)

C14Sch. B1 para. 22 restricted (5.10.2004) by Energy Act 2004 (c. 20), ss. 163, 198; S.I. 2004/2575, art. 2(1), Sch. 1

Restrictions on power to appointE+W+S

23(1)This paragraph applies where an administrator of a company is appointed—

(a)under paragraph 22, or

(b)on an administration application made by the company or its directors.

(2)An administrator of the company may not be appointed under paragraph 22 during the period of 12 months beginning with the date on which the appointment referred to in sub-paragraph (1) ceases to have effect.

24(1)If a moratorium for a company under Schedule A1 ends on a date when no voluntary arrangement is in force in respect of the company, this paragraph applies for the period of 12 months beginning with that date.E+W+S

(2)This paragraph also applies for the period of 12 months beginning with the date on which a voluntary arrangement in respect of a company ends if—

(a)the arrangement was made during a moratorium for the company under Schedule A1, and

(b)the arrangement ends prematurely (within the meaning of section 7B).

(3)While this paragraph applies, an administrator of the company may not be appointed under paragraph 22.

25An administrator of a company may not be appointed under paragraph 22 if—

(a)a petition for the winding up of the company has been presented and is not yet disposed of,

(b)an administration application has been made and is not yet disposed of, or

(c)an administrative receiver of the company is in office.

[F16025A(1)Paragraph 25(a) does not prevent the appointment of an administrator of a company if the petition for the winding up of the company was presented after the person proposing to make the appointment filed the notice of intention to appoint with the court under paragraph 27.E+W+S

(2)But sub-paragraph (1) does not apply if the petition was presented under a provision mentioned in paragraph 42(4).]

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Amendments (Textual)

Notice of intention to appointE+W+S

26(1)A person who proposes to make an appointment under paragraph 22 shall give at least five business days’ written notice to—

(a)any person who is or may be entitled to appoint an administrative receiver of the company, and

(b)any person who is or may be entitled to appoint an administrator of the company under paragraph 14.

(2)A person who proposes to make an appointment under paragraph 22 shall also give such notice as may be prescribed to such other persons as may be prescribed.

(3)A notice under this paragraph must—

(a)identify the proposed administrator, and

(b)be in the prescribed form.

27(1)A person who gives notice of intention to appoint under paragraph 26 shall file with the court as soon as is reasonably practicable a copy of—E+W+S

(a)the notice, and

(b)any document accompanying it.

(2)The copy filed under sub-paragraph (1) must be accompanied by a statutory declaration made by or on behalf of the person who proposes to make the appointment—

(a)that the company is or is likely to become unable to pay its debts,

(b)that the company is not in liquidation, and

(c)that, so far as the person making the statement is able to ascertain, the appointment is not prevented by paragraphs 23 to 25, and

(d)to such additional effect, and giving such information, as may be prescribed.

(3)A statutory declaration under sub-paragraph (2) must—

(a)be in the prescribed form, and

(b)be made during the prescribed period.

(4)A person commits an offence if in a statutory declaration under sub-paragraph (2) he makes a statement—

(a)which is false, and

(b)which he does not reasonably believe to be true.

28(1)An appointment may not be made under paragraph 22 unless the person who makes the appointment has complied with any requirement of paragraphs 26 and 27 and—E+W+S

(a)the period of notice specified in paragraph 26(1) has expired, or

(b)each person to whom notice has been given under paragraph 26(1) has consented in writing to the making of the appointment.

(2)An appointment may not be made under paragraph 22 after the period of ten business days beginning with the date on which the notice of intention to appoint is filed under paragraph 27(1).

Notice of appointmentE+W+S

29(1)A person who appoints an administrator of a company under paragraph 22 shall file with the court—

(a)a notice of appointment, and

(b)such other documents as may be prescribed.

(2)The notice of appointment must include a statutory declaration by or on behalf of the person who makes the appointment—

(a)that the person is entitled to make an appointment under paragraph 22,

(b)that the appointment is in accordance with this Schedule, and

(c)that, so far as the person making the statement is able to ascertain, the statements made and information given in the statutory declaration filed with the notice of intention to appoint remain accurate.

(3)The notice of appointment must identify the administrator and must be accompanied by a statement by the administrator—

(a)that he consents to the appointment,

(b)that in his opinion the purpose of administration is reasonably likely to be achieved, and

(c)giving such other information and opinions as may be prescribed.

(4)For the purpose of a statement under sub-paragraph (3) an administrator may rely on information supplied by directors of the company (unless he has reason to doubt its accuracy).

(5)The notice of appointment and any document accompanying it must be in the prescribed form.

(6)A statutory declaration under sub-paragraph (2) must be made during the prescribed period.

(7)A person commits an offence if in a statutory declaration under sub-paragraph (2) he makes a statement—

(a)which is false, and

(b)which he does not reasonably believe to be true.

30In a case in which no person is entitled to notice of intention to appoint under paragraph 26(1) (and paragraph 28 therefore does not apply)—

(a)the statutory declaration accompanying the notice of appointment must include the statements and information required under paragraph 27(2), and

(b)paragraph 29(2)(c) shall not apply.

Commencement of appointmentE+W+S

31The appointment of an administrator under paragraph 22 takes effect when the requirements of paragraph 29 are satisfied.

32A person who appoints an administrator under paragraph 22—

(a)shall notify the administrator and such other persons as may be prescribed as soon as is reasonably practicable after the requirements of paragraph 29 are satisfied, and

(b)commits an offence if he fails without reasonable excuse to comply with paragraph (a).

33If before the requirements of paragraph 29 are satisfied the company enters administration by virtue of an administration order or an appointment under paragraph 14—

(a)the appointment under paragraph 22 shall not take effect, and

(b)paragraph 32 shall not apply.

Invalid appointment: indemnityE+W+S

34(1)This paragraph applies where—

(a)a person purports to appoint an administrator under paragraph 22, and

(b)the appointment is discovered to be invalid.

(2)The court may order the person who purported to make the appointment to indemnify the person appointed against liability which arises solely by reason of the appointment’s invalidity.

ADMINISTRATION APPLICATION – SPECIAL CASESE+W+S

Application by holder of floating chargeE+W+S

35(1)This paragraph applies where an administration application in respect of a company—

(a)is made by the holder of a qualifying floating charge in respect of the company’s property, and

(b)includes a statement that the application is made in reliance on this paragraph.

(2)The court may make an administration order—

(a)whether or not satisfied that the company is or is likely to become unable to pay its debts, but

(b)only if satisfied that the applicant could appoint an administrator under paragraph 14.

Intervention by holder of floating chargeE+W+S

36(1)This paragraph applies where—

(a)an administration application in respect of a company is made by a person who is not the holder of a qualifying floating charge in respect of the company’s property, and

(b)the holder of a qualifying floating charge in respect of the company’s property applies to the court to have a specified person appointed as administrator (and not the person specified by the administration applicant).

(2)The court shall grant an application under sub-paragraph (1)(b) unless the court thinks it right to refuse the application because of the particular circumstances of the case.

Application where company in liquidationE+W+S

37(1)This paragraph applies where the holder of a qualifying floating charge in respect of a company’s property could appoint an administrator under paragraph 14 but for paragraph 8(1)(b).

(2)The holder of the qualifying floating charge may make an administration application.

(3)If the court makes an administration order on hearing an application made by virtue of sub-paragraph (2)—

(a)the court shall discharge the winding-up order,

(b)the court shall make provision for such matters as may be prescribed,

(c)the court may make other consequential provision,

(d)the court shall specify which of the powers under this Schedule are to be exercisable by the administrator, and

(e)this Schedule shall have effect with such modifications as the court may specify.

38(1)The liquidator of a company may make an administration application.E+W+S

(2)If the court makes an administration order on hearing an application made by virtue of sub-paragraph (1)—

(a)the court shall discharge any winding-up order in respect of the company,

(b)the court shall make provision for such matters as may be prescribed,

(c)the court may make other consequential provision,

(d)the court shall specify which of the powers under this Schedule are to be exercisable by the administrator, and

(e)this Schedule shall have effect with such modifications as the court may specify.

Effect of administrative receivershipE+W+S

39(1)Where there is an administrative receiver of a company the court must dismiss an administration application in respect of the company unless—

(a)the person by or on behalf of whom the receiver was appointed consents to the making of the administration order,

(b)the court thinks that the security by virtue of which the receiver was appointed would be liable to be released or discharged under sections 238 to 240 (transaction at undervalue and preference) if an administration order were made,

(c)the court thinks that the security by virtue of which the receiver was appointed would be avoided under section 245 (avoidance of floating charge) if an administration order were made, or

(d)the court thinks that the security by virtue of which the receiver was appointed would be challengeable under section 242 (gratuitous alienations) or 243 (unfair preferences) or under any rule of law in Scotland.

(2)Sub-paragraph (1) applies whether the administrative receiver is appointed before or after the making of the administration application.

EFFECT OF ADMINISTRATIONE+W+S

Dismissal of pending winding-up petitionE+W+S

40(1)A petition for the winding up of a company—

(a)shall be dismissed on the making of an administration order in respect of the company, and

(b)shall be suspended while the company is in administration following an appointment under paragraph 14.

(2)Sub-paragraph (1)(b) does not apply to a petition presented under—

(a)section 124A (public interest), or

[F161(aa)section 124B (SEs),]

(b)section 367 of the Financial Services and Markets Act 2000 (c. 8) (petition by [F162Financial Conduct Authority or Prudential Regulation Authority]).

(3)Where an administrator becomes aware that a petition was presented under a provision referred to in sub-paragraph (2) before his appointment, he shall apply to the court for directions under paragraph 63.

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Amendments (Textual)

F161Sch. B1 para. 40(2)(aa) inserted (8.10.2004) by The European Public Limited-Liability Company Regulations 2004 (S.I. 2004/2326), reg. 73(4)(c)

F162Words in Sch. B1 para. 40(2)(b) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 18 para. 55(2) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

Modifications etc. (not altering text)

C15Sch. B1 para. 40 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 119, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C16Sch. B1 para. 40(1)(a) 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

Dismissal of administrative or other receiverE+W+S

41(1)When an administration order takes effect in respect of a company any administrative receiver of the company shall vacate office.

(2)Where a company is in administration, any receiver of part of the company’s property shall vacate office if the administrator requires him to.

(3)Where an administrative receiver or receiver vacates office under sub-paragraph (1) or (2)—

(a)his remuneration shall be charged on and paid out of any property of the company which was in his custody or under his control immediately before he vacated office, and

(b)he need not take any further steps under section 40 or 59.

(4)In the application of sub-paragraph (3)(a)—

(a)remuneration” includes expenses properly incurred and any indemnity to which the administrative receiver or receiver is entitled out of the assets of the company,

(b)the charge imposed takes priority over security held by the person by whom or on whose behalf the administrative receiver or receiver was appointed, and

(c)the provision for payment is subject to paragraph 43.

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Modifications etc. (not altering text)

C17Sch. B1 para. 41 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

Moratorium on insolvency proceedingsE+W+S

42(1)This paragraph applies to a company in administration.

(2)No resolution may be passed for the winding up of the company.

(3)No order may be made for the winding up of the company.

(4)Sub-paragraph (3) does not apply to an order made on a petition presented under—

(a)section 124A (public interest), or

[F163(aa)section 124B (SEs),]

(b)section 367 of the Financial Services and Markets Act 2000 (c. 8) (petition by [F164Financial Conduct Authority or Prudential Regulation Authority]).

(5)If a petition presented under a provision referred to in sub-paragraph (4) comes to the attention of the administrator, he shall apply to the court for directions under paragraph 63.

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Amendments (Textual)

F163Sch. B1 para. 42(4)(aa) inserted (8.10.2004) by The European Public Limited-Liability Company Regulations 2004 (S.I. 2004/2326), reg. 73(4)(c)

F164Words in Sch. B1 para. 42(4)(b) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 18 para. 55(3) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

Modifications etc. (not altering text)

C19Sch. B1 para. 42 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 119, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2

C20Sch. B1 para. 42 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

Moratorium on other legal processE+W+S

43(1)This paragraph applies to a company in administration.

(2)No step may be taken to enforce security over the company’s property except—

(a)with the consent of the administrator, or

(b)with the permission of the court.

(3)No step may be taken to repossess goods in the company’s possession under a hire-purchase agreement except—

(a)with the consent of the administrator, or

(b)with the permission of the court.

(4)A landlord may not exercise a right of forfeiture by peaceable re-entry in relation to premises let to the company except—

(a)with the consent of the administrator, or

(b)with the permission of the court.

(5)In Scotland, a landlord may not exercise a right of irritancy in relation to premises let to the company except—

(a)with the consent of the administrator, or

(b)with the permission of the court.

(6)No legal process (including legal proceedings, execution, distress and diligence) may be instituted or continued against the company or property of the company except—

(a)with the consent of the administrator, or

(b)with the permission of the court.

[F165(6A)An administrative receiver of the company may not be appointed.]

(7)Where the court gives permission for a transaction under this paragraph it may impose a condition on or a requirement in connection with the transaction.

(8)In this paragraph “landlord” includes a person to whom rent is payable.

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Amendments (Textual)

Modifications etc. (not altering text)

C21Sch. B1 para. 43 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

Interim moratoriumE+W+S

44(1)This paragraph applies where an administration application in respect of a company has been made and—

(a)the application has not yet been granted or dismissed, or

(b)the application has been granted but the administration order has not yet taken effect.

(2)This paragraph also applies from the time when a copy of notice of intention to appoint an administrator under paragraph 14 is filed with the court until—

(a)the appointment of the administrator takes effect, or

(b)the period of five business days beginning with the date of filing expires without an administrator having been appointed.

(3)Sub-paragraph (2) has effect in relation to a notice of intention to appoint only if it is in the prescribed form.

(4)This paragraph also applies from the time when a copy of notice of intention to appoint an administrator is filed with the court under paragraph 27(1) until—

(a)the appointment of the administrator takes effect, or

(b)the period specified in paragraph 28(2) expires without an administrator having been appointed.

(5)The provisions of paragraphs 42 and 43 shall apply (ignoring any reference to the consent of the administrator).

(6)If there is an administrative receiver of the company when the administration application is made, the provisions of paragraphs 42 and 43 shall not begin to apply by virtue of this paragraph until the person by or on behalf of whom the receiver was appointed consents to the making of the administration order.

(7)This paragraph does not prevent or require the permission of the court for—

(a)the presentation of a petition for the winding up of the company under a provision mentioned in paragraph 42(4),

(b)the appointment of an administrator under paragraph 14,

(c)the appointment of an administrative receiver of the company, or

(d)the carrying out by an administrative receiver (whenever appointed) of his functions.

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Modifications etc. (not altering text)

C23Sch. B1 para. 44 restricted (5.10.2004) by Energy Act 2004 (c. 20), ss. 162(4), 163(4), 198; S.I. 2004/2575, art. 2(1), Sch. 1

C24Sch. B1 para. 44 restricted (1.10.2011) by Postal Services Act 2011 (c. 5), ss. 76(4), 85(8), 93(2)(3); S.I. 2011/2329, art. 3 (with arts. 4, 5)

C25Sch. B1 para. 44 restricted (1.10.2011) by Postal Services Act 2011 (c. 5), ss. 77(5), 85(8), 93(2)(3); S.I. 2011/2329, art. 3 (with arts. 4, 5)

C26Sch. B1 para. 44(1)(a) 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

C27Sch. B1 para. 44(5) 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

PublicityE+W+S

[F16645(1)While a company is in administration, every business document issued by or on behalf of the company or the administrator, and all the company's websites, must state—

(a)the name of the administrator, and

(b)that the affairs, business and property of the company are being managed by the administrator.

(2)Any of the following persons commits an offence if without reasonable excuse the person authorises or permits a contravention of sub-paragraph (1)—

(a)the administrator,

(b)an officer of the company, and

(c)the company.

(3)In sub-paragraph (1) “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.]

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Amendments (Textual)

PROCESS OF ADMINISTRATIONE+W+S

Announcement of administrator’s appointmentE+W+S

46(1)This paragraph applies where a person becomes the administrator of a company.

(2)As soon as is reasonably practicable the administrator shall—

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

(b)publish a notice of his appointment in the prescribed manner.

(3)As soon as is reasonably practicable the administrator shall—

(a)obtain a list of the company’s creditors, and

(b)send a notice of his appointment to each creditor of whose claim and address he is aware.

(4)The administrator shall send a notice of his appointment to the registrar of companies before the end of the period of 7 days beginning with the date specified in sub-paragraph (6).

(5)The administrator shall send a notice of his appointment to such persons as may be prescribed before the end of the prescribed period beginning with the date specified in sub-paragraph (6).

(6)The date for the purpose of sub-paragraphs (4) and (5) is—

(a)in the case of an administrator appointed by administration order, the date of the order,

(b)in the case of an administrator appointed under paragraph 14, the date on which he receives notice under paragraph 20, and

(c)in the case of an administrator appointed under paragraph 22, the date on which he receives notice under paragraph 32.

(7)The court may direct that sub-paragraph (3)(b) or (5)—

(a)shall not apply, or

(b)shall apply with the substitution of a different period.

(8)A notice under this paragraph must—

(a)contain the prescribed information, and

(b)be in the prescribed form.

(9)An administrator commits an offence if he fails without reasonable excuse to comply with a requirement of this paragraph.

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Modifications etc. (not altering text)

C28Sch. B1 para. 46 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

Statement of company’s affairsE+W+S

47(1)As soon as is reasonably practicable after appointment the administrator of a company shall by notice in the prescribed form require one or more relevant persons to provide the administrator with a statement of the affairs of the company.

(2)The statement must—

(a)be verified by a statement of truth in accordance with Civil Procedure Rules,

(b)be in the prescribed form,

(c)give particulars of the company’s property, debts and liabilities,

(d)give the names and addresses of the company’s creditors,

(e)specify the security held by each creditor,

(f)give the date on which each security was granted, and

(g)contain such other information as may be prescribed.

(3)In sub-paragraph (1) “relevant person” means—

(a)a person who is or has been an officer of the company,

(b)a person who took part in the formation of the company during the period of one year ending with the date on which the company enters administration,

(c)a person employed by the company during that period, and

(d)a person who is or has been during that period an officer or employee of a company which is or has been during that year an officer of the company.

(4)For the purpose of sub-paragraph (3) a reference to employment is a reference to employment through a contract of employment or a contract for services.

(5)In Scotland, a statement of affairs under sub-paragraph (1) must be a statutory declaration made in accordance with the Statutory Declarations Act 1835 (c. 62) (and sub-paragraph (2)(a) shall not apply).

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Modifications etc. (not altering text)

C29Sch. B1 para. 47 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

48(1)A person required to submit a statement of affairs must do so before the end of the period of 11 days beginning with the day on which he receives notice of the requirement.E+W+S

(2)The administrator may—

(a)revoke a requirement under paragraph 47(1), or

(b)extend the period specified in sub-paragraph (1) (whether before or after expiry).

(3)If the administrator refuses a request to act under sub-paragraph (2)—

(a)the person whose request is refused may apply to the court, and

(b)the court may take action of a kind specified in sub-paragraph (2).

(4)A person commits an offence if he fails without reasonable excuse to comply with a requirement under paragraph 47(1).

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Modifications etc. (not altering text)

C30Sch. B1 para. 48 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

Administrator’s proposalsE+W+S

49(1)The administrator of a company shall make a statement setting out proposals for achieving the purpose of administration.

(2)A statement under sub-paragraph (1) must, in particular—

(a)deal with such matters as may be prescribed, and

(b)where applicable, explain why the administrator thinks that the objective mentioned in paragraph 3(1)(a) or (b) cannot be achieved.

(3)Proposals under this paragraph may include—

(a)a proposal for a voluntary arrangement under Part I of this Act (although this paragraph is without prejudice to section 4(3));

(b)a proposal for a compromise or arrangement to be sanctioned under [F167Part 26 of the Companies Act 2006 (arrangements and reconstructions)] .

(4)The administrator shall send a copy of the statement of his proposals—

(a)to the registrar of companies,

(b)to every creditor of the company [F168, other than an opted-out creditor,] of whose claim and address he is aware, and

(c)