Session 2014 - 15
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Other Bills before Parliament


 
 

Public Bill Committee:                               

295

 

, continued

 
 

(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”.

 

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.


 
 

Public Bill Committee:                               

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, continued

 
 

      (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”;

 

(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


 
 

Public Bill Committee:                               

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, continued

 
 

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.

 

(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.”


 
 

Public Bill Committee:                               

298

 

, continued

 
 

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—

 

(a)    

section 99(1), (2) or (2A), or

 

(b)    

section 100(2),”.

 

39         

In section 168 (liquidator’s supplementary powers: England and Wales) for

 

subsection (2) substitute—

 

“(2)    

The liquidator may seek a decision on any matter from the company’s

 

creditors or contributories; and must seek a decision on a matter—

 

(a)    

from the company’s creditors, if requested to do so by one-

 

tenth in value of the creditors;

 

(b)    

from the company’s contributories, if requested to do so by

 

one-tenth in value of the contributories.”

 

40  (1)  

Section 171 (removal of liquidator in voluntary winding up) is amended as

 

follows.

 

      (2)  

In subsection (2)(b), for “general meeting of the company’s creditors

 

summoned” substitute “decision of the company’s creditors made by a

 

qualifying decision procedure instigated”.

 

      (3)  

For subsection (3) substitute—

 

“(3)    

Where the liquidator in a members’ voluntary winding up was

 

appointed by the court under section 108, a meeting such as is

 

mentioned in subsection (2)(a) shall be summoned only if—

 

(a)    

the liquidator thinks fit,

 

(b)    

the court so directs, or

 

(c)    

the meeting is requested in accordance with the rules by

 

members representing not less than one-half of the total voting

 

rights of all the members having at the date of the request a

 

right to vote at the meeting.

 

(3A)    

Where the liquidator in a creditors’ voluntary winding up was

 

appointed by the court under section 108, a qualifying decision

 

procedure such as is mentioned in subsection (2)(b) is to be instigated

 

only if—

 

(a)    

the liquidator thinks fit,

 

(b)    

the court so directs, or

 

(c)    

it is requested in accordance with the rules by not less than

 

one-half in value of the company’s creditors.”

 

      (4)  

For subsection (6) substitute—

 

“(6)    

In the case of a members’ voluntary winding up, the liquidator vacates

 

office as soon as the liquidator has complied with section 94(3)

 

(requirement to send final account to registrar).


 
 

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, continued

 
 

(7)    

In the case of a creditors’ voluntary winding up, the liquidator vacates

 

office as soon as the liquidator has complied with section 106(3)

 

(requirement to send final account etc. to registrar).”

 

41  (1)  

Section 172 (removal of liquidator in compulsory winding up) is amended as

 

follows.

 

      (2)  

In subsection (2), for “general meeting of the company’s creditors summoned”

 

substitute “decision of the company’s creditors made by a qualifying decision

 

procedure instigated”.

 

      (3)  

In subsection (3)—

 

(a)    

in paragraph (a) omit “a meeting of”;

 

(b)    

for the words from “a general meeting” to “the meeting” substitute “a

 

qualifying decision procedure such as is mentioned in subsection (2)

 

shall be instigated only if the liquidator thinks fit, the court so directs,

 

or it”.

 

      (4)  

For subsection (8) substitute—

 

“(8)    

Where the liquidator has produced an account of the winding up under

 

section 146 (final account), the liquidator vacates office as soon as the

 

liquidator has complied with section 146(4) (requirement to send

 

account etc. to registrar and to court).”

 

42  (1)  

Section 173 (release of liquidator in voluntary winding up) is amended as

 

follows.

 

      (2)  

In subsection (2), for paragraphs (a) and (b) substitute—

 

“(a)    

in the following cases, the time at which notice is given to the

 

registrar of companies in accordance with the rules that the

 

person has ceased to hold office—

 

(i)    

the person has been removed from office by a general

 

meeting of the company,

 

(ii)    

the person has been removed from office by a

 

decision of the company’s creditors and the

 

company’s creditors have not decided against his

 

release,

 

(iii)    

the person has died;

 

(b)    

in the following cases, such time as the Secretary of State

 

may, on the application of the person, determine—

 

(i)    

the person has been removed from office by a

 

decision of the company’s creditors and the

 

company’s creditors have decided against his release,

 

(ii)    

the person has been removed from office by the court,

 

(iii)    

the person has vacated office under section 171(4);”.

 

      (3)  

In subsection (2)(d), for “(6)(a)” substitute “(6)”.

 

      (4)  

In subsection (2), for paragraph (e) substitute—

 

“(e)    

in the case of a person who has vacated office under section

 

171(7)—

 

(i)    

if any of the company’s creditors objected to the

 

person’s release before the end of the period for so

 

objecting prescribed by the rules, such time as the

 

Secretary of State may, on an application by that

 

person, determine, and

 

(ii)    

otherwise, the time at which the person vacated

 

office.”

 

      (5)  

After subsection (2) insert—


 
 

Public Bill Committee:                               

300

 

, continued

 
 

“(2A)    

Where the person is removed from office by a decision of the

 

company’s creditors, any decision of the company’s creditors as to

 

whether the person should have his release must be made by a

 

qualifying decision procedure.”

 

43  (1)  

Section 174 (release of liquidator in compulsory winding up) is amended as

 

follows.

 

      (2)  

In subsection (2)(a), for “a general meeting of” substitute “the company’s”.

 

      (3)  

In subsection (4), for paragraphs (a) and (b) substitute—

 

“(a)    

in the following cases, the time at which notice is given to the

 

court in accordance with the rules that the person has ceased

 

to hold office—

 

(i)    

the person has been removed from office by a

 

decision of the company’s creditors and the

 

company’s creditors have not decided against his

 

release,

 

(ii)    

the person has died;

 

(b)    

in the following cases, such time as the Secretary of State

 

may, on the application of the person, determine—

 

(i)    

the person has been removed from office by a

 

decision of the company’s creditors and the

 

company’s creditors have decided against his release;

 

(ii)    

the person has been removed from office by the court

 

or the Secretary of State;

 

(iii)    

the person has vacated office under section 172(5) or

 

(7);”.

 

      (4)  

In subsection (4)(d), for sub-paragraphs (i) and (ii) substitute—

 

“(i)    

if any of the company’s creditors objected to the

 

person’s release before the end of the period for so

 

objecting prescribed by the rules, such time as the

 

Secretary of State may, on an application by that

 

person, determine, and

 

(ii)    

otherwise, the time at which the person vacated

 

office.”

 

      (5)  

After subsection (4) insert—

 

“(4ZA)    

Where the person is removed from office by a decision of the

 

company’s creditors, any decision of the company’s creditors as to

 

whether the person should have his release must be made by a

 

qualifying decision procedure.”

 

44         

Omit section 194 (resolutions passed at adjourned meetings).

 

45  (1)  

Section 195 (meetings to ascertain wishes of creditors or contributories) is

 

amended as follows.

 

      (2)  

In subsection (1)(b), for the words from “meetings” to the end substitute

 

“qualifying decision procedures to be instigated or the deemed consent

 

procedure to be used in accordance with any directions given by the court, and

 

appoint a person to report the result to the court”.

 

      (3)  

In the heading, for “Meetings” substitute “Court’s powers”.

 

46  (1)  

Section 201 (voluntary winding up - dissolution) is amended as follows.

 

      (2)  

In subsection (1)—

 

(a)    

omit “and return”;

 

(b)    

after “or” insert “his final account and statement under”.

 

      (3)  

In subsection (2)—


 
 

Public Bill Committee:                               

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, continued

 
 

(a)    

for “and return” substitute “, or the account and statement,”;

 

(b)    

after “register” insert “it or”;

 

(c)    

for “the return” substitute “the account”.

 

47         

In section 202(3) (early dissolution in England and Wales) after “creditors”

 

insert “, other than opted-out creditors,”.

 

48         

In section 204(2) (early dissolution: Scotland) for “meeting or meetings”

 

substitute “liquidator has been appointed”.

 

49  (1)  

Section 205 (compulsory winding up - dissolution) is amended as follows.

 

      (2)  

For subsection (1)(a) substitute—

 

“(a)    

a final account and statement sent under section 146(4) (final

 

account);”.

 

      (3)  

In subsection (2)—

 

(a)    

after “receipt of” insert “the final account and statement or”;

 

(b)    

after “register” insert “them or”;

 

(c)    

omit the second “of the notice”.

 

50         

In section 208(2) (misconduct in course of winding up), for “at any meeting”

 

substitute “in connection with any qualifying decision procedure or deemed

 

consent procedure”.

 

51  (1)  

Schedule 10 (offences) is amended as follows.

 

      (2)  

For the entries for section 94(4) and (6) substitute—

 

“94(4)

Liquidator failing to

Summary

Level 3 on

  
  

send to company

 

the standard

  
  

members a copy of

 

scale

  
  

account of winding up

    
 

94(5)

Liquidator failing to

Summary

Level 3 on

One tenth of

 
  

send to registrar a copy

 

the standard

level 3 on the

 
  

of account of winding

 

scale

standard

 
  

up

  

scale”

 
 

      (3)  

Omit the entry for section 98(6).

 

      (4)  

In the entry for section 99(3), in column 2, for the words from “attend” to

 

“meeting” substitute “send statement in prescribed form to creditors”.

 

      (5)  

After the entry for section 99(3) insert—

 

“100(9)

Directors failing to

1. On

A fine

  
  

seek creditors’

indictment


  
  

agreement to


   
  

appointment of

    
  

liquidator

2. Summary

In England and

       

 
    

Wales, a fine.

  
   


In Scotland, a fine

       ”

 
    

not exceeding the

  
    

statutory

  
    

maximum.

  
 

      (6)  

For the entries for section 106(4) and (6) substitute—


 
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