Session 2014 - 15
Internet Publications
Other Bills before Parliament


 
 

Public Bill Committee:                               

216

 

, continued

 
 

      (3)  

The decision has effect only if, before the decision is made, the new

 

administrator has consented to act in writing.”

 

    (35)  

In paragraph 98(2)(b), for the second “resolution” substitute “decision”.

 

    (36)  

In paragraph 98(3)—

 

(a)    

after “as passed” insert “and a decision shall be taken as made”;

 

(b)    

after “if) passed” insert “or made”.

 

    (37)  

For paragraph 98(3)(b)(ii) substitute—

 

“(ii)    

the preferential creditors of the company.”

 

    (38)  

After paragraph 98(3) insert—

 

  “(3A)  

Whether the company’s preferential creditors give their approval is

 

to be determined by a decision of those creditors as to whether they

 

give their approval.

 

    (3B)  

In a case where the administrator is removed from office, that

 

decision must be made by a qualifying decision procedure.”

 

    (39)  

For paragraph 108(2)(b) substitute—

 

“(b)    

if the company has unsecured debts, the unsecured

 

creditors of the company.”

 

    (40)  

For paragraph 108(3)(b)(ii) substitute—

 

“(ii)    

the preferential creditors of the company.”

 

    (41)  

After paragraph 108(3) insert—

 

  “(3A)  

Whether the company’s unsecured creditors or preferential

 

creditors consent is to be determined by the administrator seeking a

 

decision from those creditors as to whether they consent.”

 

    (42)  

Omit paragraph 108(4).

 

    (43)  

In paragraph 111, omit the definitions of “correspondence” and “creditors’

 

meeting”.

 

11  (1)  

Schedule 10 (offences) is amended as follows.

 

      (2)  

In the entry for Schedule B1, paragraph 51(5), in column 2, for “arrange initial

 

creditors’ meeting” substitute “seek creditors’ decision”.

 

      (3)  

In the entry for Schedule B1, paragraph 53(3), in column 2, for “at initial

 

creditors’ meeting” substitute “by creditors”.

 

      (4)  

In the entry for Schedule B1, paragraph 54(7), in column 2, for the words from

 

“decision” to “consider” insert “creditors’ decision on”.

 

      (5)  

In the entry for Schedule B1, paragraph 56(2), in column 2, for “summon

 

creditors’ meeting” substitute “seek creditors’ decision”.

 

Receivers and managers

 

12  (1)  

Section 48 (report by administrative receiver - England and Wales) is amended

 

as follows.

 

      (2)  

In subsection (1), after “such creditors” insert “, other than opted-out

 

creditors,”.

 

      (3)  

In subsection (2)—

 

(a)    

in paragraph (a), after “company” insert “, other than opted-out

 

creditors,”;

 

(b)    

omit the words after paragraph (b).

 

      (4)  

Omit subsection (3).

 

13         

In section 49(1) (committee of creditors - England and Wales), for the words

 

from the beginning to “fit” substitute “Where an administrative receiver has


 
 

Public Bill Committee:                               

217

 

, continued

 
 

sent or published a report as mentioned in section 48(2) the company’s

 

unsecured creditors may, in accordance with the rules”.

 

14  (1)  

Section 67 (report by receiver - Scotland) is amended as follows.

 

      (2)  

In subsection (1), after “such creditors” insert “, other than opted-out

 

creditors,”.

 

      (3)  

In subsection (2)—

 

(a)    

in paragraph (a), after “company” insert “, other than opted-out

 

creditors”;

 

(b)    

omit the words after paragraph (b).

 

      (4)  

Omit subsection (3).

 

15         

In section 68(1) (committee of creditors - Scotland), for the words from the

 

beginning to “fit” substitute “Where a receiver has sent or published a report

 

as mentioned in section 67(2) the company’s unsecured creditors may, in

 

accordance with the rules”.

 

Winding-up

 

16         

For section 94 (members’ voluntary winding up: final meeting of company

 

prior to dissolution) substitute—

 

“94    

Final account prior to dissolution

 

(1)    

As soon as the company’s affairs are fully wound up the liquidator

 

must make up an account of the winding up, showing how it has been

 

conducted and the company’s property has been disposed of.

 

(2)    

The liquidator must send a copy of the account to the members of the

 

company before the end of the period of 14 days beginning with the

 

day on which the account is made up.

 

(3)    

The liquidator must send a copy of the account to the registrar of

 

companies before the end of that period (but not before sending it to

 

the members of the company).

 

(4)    

If the liquidator does not comply with subsection (2) the liquidator is

 

liable to a fine.

 

(5)    

If the liquidator does not comply with subsection (3) the liquidator is

 

liable to a fine and, for continued contravention, a daily default fine.”

 

17  (1)  

Section 95 (effect of company’s insolvency) is amended as follows.

 

      (2)  

After subsection (1) insert—

 

“(1A)    

The liquidator must before the end of the period of 7 days beginning

 

with the day after the day on which the liquidator formed that

 

opinion—

 

(a)    

make out a statement in the prescribed form as to the affairs of

 

the company, and

 

(b)    

send it to the company’s creditors.”

 

      (3)  

Omit subsections (2) to (3) and (5) to (7).

 

18  (1)  

Section 96 (conversion to creditors’ voluntary winding up) is amended as

 

follows.

 

      (2)  

For “creditors’ meeting is held under section 95” substitute “liquidator sends a

 

statement of the company’s affairs to the company’s creditors under section

 

95(1A)(b)”.

 

      (3)  

For paragraph (b) substitute—


 
 

Public Bill Committee:                               

218

 

, continued

 
 

“(b)    

the statement of affairs sent to the company’s creditors under

 

section 95(1A)(b) were the statement required by section 99;”.

 

19         

In section 97(2) (application of Chapter 4), for “Sections 98 and 99 do”

 

substitute “Section 99 does”.

 

20         

Omit section 98 (meeting of creditors).

 

21  (1)  

Section 99 (directors to lay statement of affairs before creditors) is amended as

 

follows.

 

      (2)  

For subsection (1) substitute—

 

“(1)    

The directors of the company must, before the end of the period of 7

 

days beginning with the day after the day on which the company

 

passes a resolution for voluntary winding up—

 

(a)    

make out a statement in the prescribed form as to the affairs of

 

the company, and

 

(b)    

send the statement to the company’s creditors.”

 

      (3)  

For subsection (3) substitute—

 

“(3)    

If the directors without reasonable excuse fail to comply with

 

subsection (1), (2) or (2A), they are guilty of an offence and liable to

 

a fine.”

 

22  (1)  

For section 100 (appointment of liquidator) substitute—

 

“100  

Appointment of liquidator

 

(1)    

The company may nominate a person to be liquidator at the company

 

meeting at which the resolution for voluntary winding up is passed.

 

(2)    

If the company nominates a person at that meeting, the directors of the

 

company must—

 

(a)    

seek a decision from the company’s creditors as to whether

 

they agree to the appointment of that person as liquidator, and

 

(b)    

ensure that the initial decision date for that decision is within

 

the period of 14 days beginning with the day after the day of

 

that meeting.

 

(3)    

If the creditors agree to the appointment as liquidator of the person

 

nominated by the company, that person is to be the liquidator.

 

(4)    

If the creditors do not agree to the appointment as liquidator of the

 

person nominated by the company, the liquidator is to be the person (if

 

any) nominated by the creditors in accordance with the rules, subject

 

to subsection (5).

 

(5)    

If the company and the creditors nominate different persons, any

 

director, member or creditor of the company may, before the end of the

 

period of 7 days beginning with the day after the day on which the

 

nomination was made by the creditors, apply to the court for an order

 

either—

 

(a)    

directing that the person nominated as liquidator by the

 

company is to be liquidator instead of or jointly with the

 

person nominated by the creditors, or

 

(b)    

appointing some other person to be liquidator instead of the

 

person nominated by the creditors.

 

(6)    

If the company does not nominate a person to be liquidator at the

 

meeting at which the resolution for voluntary winding up is passed, the


 
 

Public Bill Committee:                               

219

 

, continued

 
 

liquidator is to be the person (if any) nominated by the creditors in

 

accordance with the rules.

 

(7)    

In the case of a winding-up which is converted to a creditors’

 

voluntary winding-up under section 96—

 

(a)    

subsection (2) does not apply;

 

(b)    

the person who is the liquidator of the company immediately

 

before the conversion (“the existing liquidator”) must—

 

(i)    

seek a decision from the company’s creditors as to

 

whether they agree to the existing liquidator’s

 

appointment as liquidator, and

 

(ii)    

ensure that the initial decision date for that decision is

 

within the period of 28 days beginning with the day

 

after the day on which the existing liquidator forms

 

the opinion mentioned in section 95(1);

 

(c)    

subsections (3) to (5) apply as if the existing liquidator had

 

been nominated to be liquidator by the company.

 

(8)    

The “initial decision date” for a decision of the company’s creditors as

 

to whether they agree to a person’s appointment as liquidator—

 

(a)    

if the decision is initially sought using the deemed consent

 

procedure, is the date on which a decision will be made if the

 

creditors by that procedure agree to the person’s appointment

 

as liquidator, and

 

(b)    

if the decision is initially sought using a qualifying decision

 

procedure, is the date on or before which a decision will be

 

made if it is made by that qualifying decision procedure

 

(assuming that date does not change after the procedure is

 

instigated).

 

(9)    

If the directors without reasonable excuse fail to comply with

 

subsection (2) they are guilty of an offence and liable to a fine.”

 

      (2)  

In section 100 (as substituted by sub-paragraph (1)), after subsection (5)

 

insert—

 

“(5A)    

The court must grant an application under subsection (5) made by the

 

holder of a qualifying floating charge in respect of the company’s

 

property (within the meaning of paragraph 14 of Schedule B1) unless

 

the court thinks it right to refuse the application because of the

 

particular circumstances of the case.”

 

23  (1)  

Section 101 (appointment of liquidation committee) is amended as follows.

 

      (2)  

For subsection (1) substitute—

 

“(1)    

The creditors may in accordance with the rules appoint a committee

 

(“the liquidation committee”) of not more than 5 persons to exercise

 

the functions conferred on it by or under this Act.”

 

      (3)  

In subsection (3)—

 

(a)    

for “resolve” (in both places) substitute “decide”;

 

(b)    

for “the persons mentioned in the resolution” (in both places)

 

substitute “those persons”.

 

24         

Omit section 102 (creditors’ meeting where winding up converted under

 

section 96).

 

25         

In section 104A (progress report to company and creditors at year’s end

 

(England and Wales)), in subsection (1)(b)(i), after “creditors” insert “, other

 

than opted-out creditors”.


 
 

Public Bill Committee:                               

220

 

, continued

 
 

26  (1)  

Section 105 (meetings of company and creditors at each year’s end (Scotland))

 

is amended as follows.

 

      (2)  

In subsection (1), after “company and” insert “(despite section 246ZE)”.

 

      (3)  

In subsection (4), for “creditors meeting under section 95 is held” substitute

 

“liquidator sends a statement of affairs to the company’s creditors under

 

section 95(1A)(b)”.

 

27         

For section 106 (creditors’ voluntary winding-up: final meetings of company

 

and creditors prior to dissolution) substitute—

 

“106  

Final account prior to dissolution

 

(1)    

As soon as the company’s affairs are fully wound up the liquidator

 

must make up an account of the winding up, showing how it has been

 

conducted and the company’s property has been disposed of.

 

(2)    

The liquidator must, before the end of the period of 14 days beginning

 

with the day on which the account is made up—

 

(a)    

send a copy of the account to the company’s members,

 

(b)    

send a copy of the account to the company’s creditors (other

 

than opted-out creditors), and

 

(c)    

give the company’s creditors (other than opted-out creditors)

 

a notice explaining the effect of section 173(2)(e) and how

 

they may object to the liquidator’s release.

 

(3)    

The liquidator must during the relevant period send to the registrar of

 

companies—

 

(a)    

a copy of the account, and

 

(b)    

a statement of whether any of the company’s creditors

 

objected to the liquidator’s release.

 

(4)    

The relevant period is the period of 7 days beginning with the day after

 

the last day of the period prescribed by the rules as the period within

 

which the creditors may object to the liquidator’s release.

 

(5)    

If the liquidator does not comply with subsection (2) the liquidator is

 

liable to a fine.

 

(6)    

If the liquidator does not comply with subsection (3) the liquidator is

 

liable to a fine and, for continued contravention, a daily default fine.”

 

28         

In section 114(2) (powers of directors in voluntary winding up where no

 

liquidator nominated by company)—

 

(a)    

omit “98 (creditors’ meeting) and”;

 

(b)    

after “affairs)” insert “and 100(6) (nomination of liquidator by

 

creditors)”.

 

29  (1)  

Section 136 (functions of official receiver in relation to office of liquidator) is

 

amended as follows.

 

      (2)  

In subsection (4) for “summon separate meetings of” substitute “in accordance

 

with the rules seek nominations from”.

 

      (3)  

In subsection (5)(a) and (c), omit “to summon meetings”.

 

      (4)  

In subsection (6), for “summon meetings of” substitute “seek nominations

 

from”.

 

30  (1)  

Section 137 (appointment by Secretary of State) is amended as follows.

 

      (2)  

In subsection (2)—

 

(a)    

for “meetings are held” substitute “nominations are sought from the

 

company’s creditors and contributories”;


 
 

Public Bill Committee:                               

221

 

, continued

 
 

(b)    

omit “of those meetings”.

 

      (3)  

In subsection (5), for the words from “shall” to the end substitute “must explain

 

the procedure for establishing a liquidation committee under section 141.”

 

31  (1)  

Section 138 (appointment of liquidator in Scotland) is amended as follows.

 

      (2)  

In subsection (3), for “summon separate meetings of” substitute “in

 

accordance with the rules seek nominations from”.

 

      (3)  

In subsection (4), for the words from “summon under” to the second “meeting

 

of” substitute “seek a nomination from the company’s contributories under

 

subsection (3), he may seek a nomination only from”.

 

      (4)  

In subsection (5)—

 

(a)    

for “one or more meetings are held” substitute “a nomination is sought

 

from the company’s creditors, or nominations are sought from the

 

company’s creditors and contributories,”;

 

(b)    

for “by the meeting or meetings” substitute “as a result”.

 

32  (1)  

Section 139 (choice of liquidator at meetings of creditors and contributories)

 

is amended as follows.

 

      (2)  

In subsection (1), for “separate meetings of the company’s creditors and

 

contributories are summoned” substitute “nominations are sought from the

 

company’s creditors and contributories”.

 

      (3)  

In subsection (2) for “at their respective meetings may” substitute “may in

 

accordance with the rules”.

 

      (4)  

In the heading, for “at meetings of” substitute “by”.

 

33         

In section 140(3) (appointment of liquidator by court following administration

 

or voluntary arrangement), for the words from “he” to the end substitute

 

“section 136(5)(a) and (b) does not apply.”

 

34         

In section 141 (liquidation committee: England and Wales) for subsections (1)

 

to (3) substitute—

 

“(1)    

This section applies where a winding up order has been made by the

 

court in England and Wales.

 

(2)    

If both the company’s creditors and the company’s contributories

 

decide that a liquidation committee should be established, a

 

liquidation committee is to be established in accordance with the rules.

 

(3)    

If only the company’s creditors, or only the company’s contributories,

 

decide that a liquidation committee should be established, a

 

liquidation committee is to be established in accordance with the rules

 

unless the court orders otherwise.

 

(3A)    

A “liquidation committee” is a committee having such functions as are

 

conferred on it by or under this Act.

 

(3B)    

The liquidator must seek a decision from the company’s creditors and

 

contributories as to whether a liquidation committee should be

 

established if requested, in accordance with the rules, to do so by one-

 

tenth in value of the company’s creditors.

 

(3C)    

Subsection (3B) does not apply where the liquidator is the official

 

receiver.”

 

35  (1)  

Section 142 (liquidation committee (Scotland)) is amended as follows.

 

      (2)  

For subsections (1) to (4) substitute—

 

“(1)    

This section applies where a winding up order has been made by the

 

court in Scotland.


 
 

Public Bill Committee:                               

222

 

, continued

 
 

(2)    

If both the company’s creditors and the company’s contributories

 

decide that a liquidation committee should be established, a

 

liquidation committee is to be established in accordance with the rules.

 

(3)    

If only the company’s creditors, or only the company’s contributories,

 

decide that a liquidation committee should be established, a

 

liquidation committee is to be established in accordance with the rules

 

unless the court orders otherwise.

 

(4)    

A liquidator appointed by the court other than under section 139(4)(a)

 

must seek a decision from the company’s creditors and contributories

 

as to whether a liquidation committee should be established if

 

requested, in accordance with the rules, to do so by one-tenth in value

 

of the company’s creditors.”

 

      (3)  

In subsection (6), for the words from “In” to “has” substitute “A “liquidation

 

committee” is a committee having the powers and duties conferred and

 

imposed on it by this Act, and”.

 

36         

For section 146 (compulsory winding-up - duty to summon final meeting)

 

substitute—

 

“146  

Final account

 

(1)    

This section applies where a company is being wound up by the court

 

and the liquidator is not the official receiver.

 

(2)    

If it appears to the liquidator that the winding up of the company is for

 

practical purposes complete the liquidator must make up an account of

 

the winding up, showing how it has been conducted and the

 

company’s property has been disposed of.

 

(3)    

The liquidator must—

 

(a)    

send a copy of the account to the company’s creditors (other

 

than opted-out creditors), and

 

(b)    

give the company’s creditors (other than opted-out creditors)

 

a notice explaining the effect of section 174(4)(d) and how

 

they may object to the liquidator’s release.

 

(4)    

The liquidator must during the relevant period send to the court and the

 

registrar of companies—

 

(a)    

a copy of the account, and

 

(b)    

a statement of whether any of the company’s creditors

 

objected to the liquidator’s release.

 

(5)    

The relevant period is the period of 7 days beginning with the day after

 

the last day of the period prescribed by the rules as the period within

 

which the creditors may object to the liquidator’s release.”

 

37         

In section 160(1) (delegation of court’s powers to liquidator (England and

 

Wales)) for paragraph (a) substitute—

 

“(a)    

the seeking of decisions on any matter from creditors and

 

contributories,”.

 

38  (1)  

Section 166 (liquidator’s powers and duties in creditors’ voluntary winding

 

up) is amended as follows.

 

      (2)  

In subsection (2), for the words from “during” to the end substitute “before a

 

liquidator has been appointed in accordance with section 100.”

 

      (3)  

Omit subsection (4).

 

      (4)  

In subsection (5), for the words from the beginning to the end of paragraph (b)

 

substitute “If the directors fail to comply with—


 
previous section contents continue
 

© Parliamentary copyright
Revised 28 October 2014