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Small Business, Enterprise and Employment BillPage 240

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
5been 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
10than 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
15of 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
20after 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
25liable 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
30creditors)”.

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) 35In 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) 40for “meetings are held” substitute “nominations are sought from the
company’s creditors and contributories”;

(b) omit “of those meetings”.

Small Business, Enterprise and Employment BillPage 241

(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) 5In 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) 10In 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) 15Section 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) 20In 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
25end 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) 30If 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
35contributories, 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) 40The 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.

Small Business, Enterprise and Employment BillPage 242

(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) 5This 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
10rules.

(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) 15A 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) 20In 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 25Final 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
30account 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) 35give 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) 40a 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
45within which the creditors may object to the liquidator’s release.

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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) 5Section 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) 10In 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
15subsection (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-
20tenth 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) 25In 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
30appointed 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
35members 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
40procedure 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
45one-half in value of the company’s creditors.

Small Business, Enterprise and Employment BillPage 244

(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).

(7) 5In 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) 10In 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) 15for 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) 20Where 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
25follows.

(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) 30the 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
35release,

(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
40decision 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)”.

Small Business, Enterprise and Employment BillPage 245

(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
5person’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
10office.

(5) After subsection (2) insert—

(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
15qualifying 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) 20in 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
25company’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) 30the 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) 35the 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
40objecting 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) 45After 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

Small Business, Enterprise and Employment BillPage 246

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
5amended 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) 10In 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) 15In subsection (2)—

(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”
20insert “, 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) 25a 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) 30omit 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) 35For the entries for section 94(4) and (6) substitute—

94(4) Liquidator failing to
send to company
members a copy of
account of winding
up
Summary Level 3 on
the
standard
scale

Small Business, Enterprise and Employment BillPage 247

94(5) Liquidator failing to
send to registrar a
copy of account of
winding up
Summary Level 3 on
the
standard
scale
One tenth of
level 3 on
the standard
scale

(3) 5Omit 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
seek creditors’
agreement to
appointment of
liquidator
1. On
indictment
A fine
2. Summary In England and
Wales, a fine.

10
In Scotland, a
fine not
exceeding the
statutory
maximum.




15

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

106(5) Liquidator failing to
send to company
members and
creditors a copy of
account of winding
up
Summary Level 3 on
the
standard
scale
106(6) Liquidator failing to
send to registrar a
copy of account of
winding up
Summary Level 3 on
the
standard
scale
One tenth of
level 3 on
the standard
20scale

Other provision

52 (1) Section 246A (remote attendance at meetings) is amended as follows.

(2) In subsection (1), for the words from “applies to” to the end substitute
“applies to any meeting of the members of a company summoned by the
25office-holder under this Act or the rules, other than a meeting of the
members of the company in a members’ voluntary winding up.”

(3) In subsection (8) for “creditors, members or contributories” substitute
“members”.

(4) In subsection (9)(c), for the words from “made” to “of members,” substitute
30“made”.

53 In section 387(2A) (definition of “relevant date”) for “meetings to consider”
substitute “consideration of”.

54 In section 433(3)(a) (admissibility of evidence in statement of affairs etc) omit
“98(6),”.

Small Business, Enterprise and Employment BillPage 248

55 (1) Section 434B (representation of companies at meetings) is amended as
follows.

(2) In subsection (1), for paragraph (a) substitute—

(a) in a qualifying decision procedure, held in pursuance of this
5Act or of rules made under it, by which a decision is sought
from the creditors of a company, or.

(3) In the heading, after “corporations” insert “in decision procedures and”.

56 In Schedule 8, after paragraph 9 insert—

9A Provision about how a company’s creditors may nominate a
10person to be liquidator, including in the case of a voluntary
winding up provision conferring functions on the directors of the
company.

57 (1) Paragraph 10 of Schedule 8 (power to make provision about creditors
committees etc) is amended as follows.

(2) 15In sub-paragraph (1)—

(a) after “to the” insert “establishment,”;

(b) for “established under” substitute “provided for by”.

(3) In sub-paragraph (2)—

(a) in paragraph (a), omit “a meeting of” in both places;

(b) 20in paragraph (b), for “a meeting of” substitute “seeking a decision
from”.

Part 2 Individual insolvency

Introductory

58 25The Insolvency Act 1986 is amended in accordance with this Part of this
Schedule.

Individual voluntary arrangements

59 (1) Section 256 (nominee’s report on debtor’s proposal) is amended as follows.

(2) At the end of subsection (1)(a) insert “and”.

(3) 30In subsection (1)(aa)—

(a) for “a meeting of the debtor’s creditors should be summoned to”
substitute “the debtor’s creditors should”;

(b) omit “, and”.

(4) Omit subsection (1)(b).

(5) 35In subsection (5) for “a meeting of the debtor’s creditors should be
summoned to” substitute “the debtor’s creditors should”.

(6) In subsection (6), for “a meeting of the debtor’s creditors to be summoned”
substitute “the debtor’s creditors”.

Small Business, Enterprise and Employment BillPage 249

60 (1) Section 256A (nominee’s report on debtor’s proposal) is amended as
follows.

(2) At the end of subsection (3)(a) insert “and”.

(3) In subsection (3)(b)—

(a) 5for “a meeting of the debtor’s creditors should be summoned to”
substitute “the debtor’s creditors should”;

(b) omit “, and”.

(4) Omit subsection (3)(c).

61 In the heading before section 257, for “meeting” substitute “decisions”.

62 (1) 10Section 257 (summoning of creditors’ meeting) is amended as follows.

(2) For subsections (1) and (2) substitute—

(1) This section applies where it has been reported to the court under
section 256 or to the debtor’s creditors under section 256A that the
debtor’s creditors should consider the debtor’s proposal.

(2) 15The nominee (or the nominee’s replacement under section 256(3) or
256A(4)) must seek a decision from the debtor’s creditors as to
whether they approve the proposed voluntary arrangement (unless,
in the case of a report to which section 256 applies, the court
otherwise directs).

(2A) 20The decision is to be made by a creditors’ decision procedure.

(2B) Notice of the creditors’ decision procedure must be given to every
creditor of the debtor of whose claim and address the nominee (or
the nominee’s replacement) is aware.

(3) In subsection (3)(b), for “meeting” substitute “creditors’ decision
25procedure”.

(4) For the heading substitute “Consideration of debtor’s proposal by
creditors”.

63 (1) Section 258 (decision of creditors’ meeting) is amended as follows.

(2) For subsection (1) substitute—

(1) 30This section applies where under section 257 the debtor’s creditors
are asked to decide whether to approve the proposed voluntary
arrangement.

(3) In subsections (2), (4) and (5) for “meeting” (in each place) substitute
“creditors”.

(4) 35In subsection (2)—

(a) after “with” insert “or without”;

(b) for “do so” insert “approve it with modifications”.

(5) Omit subsection (6).

(6) For the heading substitute “Approval of debtor’s proposal”.

64 (1) 40Section 259 (report of decisions to court) is amended as follows.

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Contents page 140-149 150-159 160-169 170-179 180-189 190-199 200-209 210-219 220-229 230-239 240-249 250-259 260-260 Last page