Small Business, Enterprise and Employment Bill (HC Bill 117)

(2) For subsection (1) substitute—

“(1) When pursuant to section 257 the debtor’s creditors have decided
whether to approve the debtor’s proposal (with or without
modifications), the nominee (or the nominee’s replacement under
5section 256(3) or 256A(4)) must—

(a) give notice of the creditors’ decision to such persons as may
be prescribed, and

(b) where the creditors considered the debtor’s proposal
pursuant to a report to the court under section 256(1)(aa),
10report the creditors’ decision to the court.”

(3) In subsection (2), for “meeting has” substitute “creditors have”.

65 (1) Section 260 (effect of approval) is amended as follows.

(2) In subsection (1) for “the meeting summoned under section 257 approves”
substitute “pursuant to section 257 the debtor’s creditors decide to approve”.

(3) 15In subsection (2)—

(a) in paragraph (a) for “at the meeting” substitute “at the time the
creditors decided to approve the proposal”;

(b) in paragraph (b)(i) for the words from “at the” to “it)” substitute “in
the creditors’ decision procedure by which the decision to approve
20the proposal was made”.

(4) In subsection (4) for “meeting” substitute “decision”.

66 (1) Section 261 (additional effect on undischarged bankrupt) is amended as
follows.

(2) In subsection (1)(a), for “the creditors’ meeting summoned under section 257
25approves” substitute “pursuant to section 257 the debtor’s creditors decide
to approve”.

(3) In subsection (3)(a), for “decision of the creditors’ meeting” substitute
“creditors’ decision”.

67 (1) Section 262 (challenge of meeting’s decision) is amended as follows.

(2) 30In subsection (1)(a), for “a creditors’ meeting summoned under” substitute
“a decision of the debtor’s creditors pursuant to”.

(3) In subsection (1)(b), for “at or in relation to such a meeting” substitute “in
relation to a creditors’ decision procedure instigated under that section”.

(4) In subsection (2)(b)(i), for “at the creditors’ meeting” substitute “in the
35creditors’ decision procedure”.

(5) In subsection (3)(b)—

(a) for “creditors’ meeting” substitute “creditors’ decision procedure”;

(b) for “the meeting had taken place” substitute “a decision as to
whether to approve the proposed voluntary arrangement had been
40made”.

(6) In subsection (4)(a) for “the meeting” substitute “a decision of the debtor’s
creditors”.

(7) For subsection (4)(b) substitute—

“(b) direct any person to seek a decision from the debtor’s
creditors (using a creditors’ decision procedure) as to
whether they approve—

(i) 5any revised proposal the debtor may make, or

(ii) in a case falling within subsection (1)(b), the debtor’s
original proposal.”

(8) In subsection (5)—

(a) for “for the summoning of a meeting to consider” substitute “in
10relation to”;

(b) for “given at the previous meeting” substitute “previously given by
the debtor’s creditors”.

(9) In subsection (7), for “meeting”, in each place, substitute “decision”.

(10) In subsection (8), for the words from “an approval” to the end substitute “the
15approval of a voluntary arrangement by a decision of the debtor’s creditors
pursuant to section 257 is not invalidated by any irregularity in relation to
the creditors’ decision procedure by which the decision was made.”

(11) In the heading for “meeting’s” substitute “creditors’”.

68 In section 262B(1) (prosecution of delinquent debtors), for “creditors’
20meeting summoned under” substitute “decision of the debtor’s creditors
pursuant to”.

69 In section 262C (arrangements coming to an end prematurely), for
“creditors’ meeting summoned under” substitute “decision of the debtor’s
creditors pursuant to”.

70 25In section 263(1) (implementation and supervision of approved voluntary
arrangement), for “creditors’ meeting summoned under” substitute
“decision of the debtor’s creditors pursuant to”.

Bankruptcy

71 In section 276(1)(b)(ii) (default in connection with voluntary arrangement)
30for “at or in connection with a meeting summoned” substitute “in
connection with a creditors’ decision procedure instigated”.

72 In section 283(4)(a) (definition of bankrupt’s estate), for the words from “a
meeting” to “held” substitute “the trustee of that estate has vacated office
under section 298(8)”.

73 35In section 287(3)(c) (powers of interim receiver), for “summon a general
meeting of” substitute “seek a decision on a matter from”.

74 In section 296(5) (trustee to give notice relating to creditors’ committees), for
paragraphs (a) and (b) substitute “explain the procedure for establishing a
creditors’ committee under section 301.”

75 (1) 40Section 298 (trustee’s vacation of office) is amended as follows.

(2) In subsection (1), for “general meeting of the bankrupt’s creditors
summoned” substitute “decision of the bankrupt’s creditors made by a
creditors’ decision procedure instigated”.

(3) In subsection (4)—

(a) for “general meeting of the bankrupt’s creditors shall be summoned”
substitute “creditors’ decision procedure may be instigated”;

(b) in paragraph (c)—

(i) omit “the meeting is requested by”;

(ii) 5after “bankrupt’s creditors” insert “so requests,”.

(4) After subsection (4) insert—

“(4A) Where a bankrupt’s creditors are asked to decide whether a trustee
other than the official receiver should be removed they must also be
asked to decide (using a creditors’ decision procedure) whether, if
10the trustee is removed, he shall have his release.”

(5) In subsection (8), for the words from “a final” to the end substitute “the
trustee has given notice under section 331(2).”

(6) After subsection (8) insert—

“(8A) A notice under subsection (8)—

(a) 15must not be given before the end of the period prescribed by
the rules as the period within which the creditors may object
to the trustee’s release, and

(b) must state whether any of the bankrupt’s creditors objected
to the trustee’s release.”

76 (1) 20Section 299 (release of trustee) is amended as follows.

(2) In subsection (1)(a), omit “a general meeting of”.

(3) In subsection (3), 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
25to hold office—

(i) the person has been removed from office by a
decision of the bankrupt’s creditors and the creditors
have not decided against his release,

(ii) the person has died;

(b) 30in the following cases, such time as the Secretary of State
may, on an application by the person, determine—

(i) the person has been removed from office by a
decision of the bankrupt’s creditors and the creditors
have decided against his release,

(ii) 35the person has been removed from office by the court
or by the Secretary of State,

(iii) the person has vacated office under section 298(6);”.

(4) In subsection (3)(d), for paragraphs (i) and (ii) substitute—

if any of the bankrupt’s creditors objected to the
40person’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
45office.”

(5) After subsection (3) insert—

“(3A) Where the person is removed from office by a decision of the
bankrupt’s creditors, any decision of the bankrupt’s creditors as to
whether the person should have his release must be made by a
5qualifying decision procedure.”

77 (1) Section 300 (vacancy in office of trustee) is amended as follows.

(2) In subsection (3)—

(a) for “summon a general meeting of” substitute “in accordance with
the rules seek a nomination from”;

(b) 10for the words from “shall” to the end substitute “must seek a
nomination if requested to do so by not less than one-tenth in value
of the bankrupt’s creditors.”

(3) After subsection (3) insert—

“(3A) The person (if any) nominated by the creditors is to be the trustee.”

(4) 15In subsection (4) for the words from “summoned” to “meeting of” substitute
“sought, and is not proposing to seek, a nomination from the bankrupt’s”.

(5) In subsection (8) for the words from “holding” to “331” substitute “vacation
of office by the trustee under section 298(8)”.

78 (1) Section 301 (creditors’ committees) is amended as follows.

(2) 20In subsection (1), for the words from “general” to “otherwise)” substitute
“bankrupt’s creditors”.

(3) In subsection (2)—

(a) for “A general meeting of the” substitute “The”;

(b) for “an appointment made by that meeting” substitute “the
25appointment”.

79 In section 314(7) (trustee’s power and duty to summon creditors’ meeting)—

(a) for “summon a general meeting of” substitute “seek a decision on a
matter from”;

(b) for “summon such a meeting” substitute “seek a decision on a
30matter”.

80 In section 330 (final distribution), after subsection (1) insert—

“(1A) A notice under subsection (1)(b) need not be given to opted-out
creditors.”

81 (1) Section 331 (final meeting) is amended as follows.

(2) 35For subsection (2) substitute—

“(2) The trustee must give the bankrupt’s creditors (other than opted-out
creditors) notice that it appears to the trustee that the administration
of the bankrupt’s estate is for practical purposes complete.

(2A) The notice must—

(a) 40be accompanied by a report of the trustee’s administration of
the bankrupt’s estate;

(b) explain the effect of section 299(3)(d) and how the creditors
may object to the trustee’s release.”

(3) Omit subsections (3) and (4).

(4) In the heading, for “meeting” substitute “report”.

82 5In section 332(2) (bankrupt’s home), for “summon a meeting under section
331” substitute “give notice under section 331(2)”.

83 In section 356(2)(c) (offence of making false statements)—

(a) for “at any meeting of his creditors” substitute “in connection with
any creditors’ decision procedure or deemed consent procedure”;

(b) 10for “at such a meeting” substitute “in connection with such a
procedure”.

84 In Schedule 9, after paragraph 12 insert—

“12A Provision about how a bankrupt’s creditors may nominate a
person to be trustee.”

85 15In paragraph 13 of Schedule 9 (creditors’ committee)—

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

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

Other provision

86 Omit section 379A (remote attendance at meetings) and the heading before
20it.

Section 127

SCHEDULE 10 Trustees in bankruptcy

Insolvency Act 1986 (c. 45)Insolvency Act 1986 (c. 45)

1 The Insolvency Act 1986 is amended as provided in paragraphs 2 to 11.

2 25In section 286(3) (interim receiver to have powers and duties conferred by
section 287) for “of a receiver and manager under” substitute “given by”.

3 (1) Section 287 (receivership pending appointment of first trustee) is amended
as follows.

(2) For the heading substitute “Powers of interim receiver”.

(3) 30In subsection (1)—

(a) for the words from the beginning to “official receiver” substitute “An
interim receiver appointed under section 286”;

(b) for “bankrupt’s estate” substitute “debtor’s property”.

(4) In subsection (2)—

(a) 35for “the official” substitute “an interim”;

(b) for “bankrupt’s estate” substitute “debtor’s property”;

(c) for “the estate” (in both places) substitute “the property”.

(5) In subsection (3)—

(a) for “The official” substitute “An interim”;

(b) for “of the estate” substitute “of the debtor’s property”;

(c) in paragraph (a), for the words from “any” to the end substitute “the
5debtor’s property,”;

(d) for paragraph (b), substitute—

“(b) is not required to do anything that involves his
incurring expenditure, except in pursuance of
directions given by—

(i) 10the Secretary of State, where the official
receiver is the interim receiver, or

(ii) the court, in any other case,”;

(e) in paragraph (c) for “bankrupt’s” substitute “debtor’s”.

(6) In subsection (4)—

(a) 15for paragraph (a) substitute—

“(a) an interim receiver acting as receiver or manager of
the debtor’s property under this section seizes or
disposes of any property which is not the debtor’s
property, and”;

(b) 20in paragraph (b) for “official receiver” substitute “interim receiver”;

(c) for “official receiver is” substitute “interim receiver is”;

(d) for “bankruptcy” substitute “interim receivership”.

(7) Omit subsection (5).

4 Omit section 291(1) to (3) (bankrupt’s duty to deliver possession of estate to
25official receiver).

5 (1) Section 292 (power to make appointments) is amended as follows.

(2) For the heading substitute “Appointment of trustees: general provision”.

(3) For subsection (1) substitute—

“(1) This section applies to any appointment of a person (other than the
30official receiver) as trustee of a bankrupt’s estate.”

(4) Omit subsection (5).

6 Omit sections 293 to 295 (meeting of creditors to appoint first trustee).

7 In section 296 (appointment of trustee by Secretary of State)—

(a) in subsection (1) omit “(other than section 297(1) below)”;

(b) 35in subsection (3) omit “or on a reference under section 295”.

8 Omit section 297.

9 (1) Section 298 (removal of trustees) is amended as follows.

(2) Omit subsection (2).

(3) In subsection (4)—

(a) 40for “section 293(3) or 295(4)” substitute “section 291A(1)”;

(b) for “section 297(5)” substitute “section 291A(2)”.

10 Omit paragraph 10 of Schedule 9 (exercise by official receiver of functions
under section 287).

11 In paragraph 30 of Schedule 9 omit “, of the official receiver while acting as
a receiver or manager under section 287”.

5Enterprise and Regulatory Reform Act 2013 (c. 24)2013 (c. 24)

12 In Schedule 19 to the Enterprise and Regulatory Reform Act 2013, omit
paragraphs 20 to 22.

Section 138

SCHEDULE 11 Single regulator of insolvency practitioners: supplementary provision

10Operation of this Schedule

1 (1) This Schedule has effect in relation to regulations under section 138
designating a body (referred to in this Schedule as “the Regulations”) as
follows—

(a) paragraphs 2 to 13 have effect where the Regulations establish the
15body;

(b) paragraphs 6, 7 and 9 to 13 have effect where the Regulations
designate an existing body (see section 138(2)(b));

(c) paragraph 14 also has effect where the Regulations designate an
existing body that is an unincorporated association.

(2) 20Provision made in the Regulations by virtue of paragraph 6 or 12, where that
paragraph has effect as mentioned in sub-paragraph (1)(b), may only apply
in relation to—

(a) things done by or in relation to the body in or in connection with the
exercise of functions conferred on it by the Regulations, and

(b) 25functions of the body which are functions so conferred.

Name, members and chair

2 (1) The Regulations must prescribe the name by which the body is to be known.

(2) The Regulations must provide that the members of the body must be
appointed by the Secretary of State after such consultation as the Secretary
30of State thinks appropriate.

(3) The Regulations must provide that the Secretary of State must appoint one
of the members as the chair of the body.

(4) The Regulations may include provision about—

(a) the terms on which the members of the body hold and vacate office;

(b) 35the terms on which the person appointed as the chair holds and
vacates that office.

Remuneration etc.

3 (1) The Regulations must provide that the body must pay to its chair and
members such remuneration and allowances in respect of expenses properly

incurred by them in the exercise of their functions as the Secretary of State
may determine.

(2) The Regulations must provide that, as regards any member (including the
chair) in whose case the Secretary of State so determines, the body must pay
5or make provision for the payment of—

(a) such pension, allowance or gratuity to or in respect of that person on
retirement or death as the Secretary of State may determine, or

(b) such contributions or other payment towards the provision of such a
pension, allowance or gratuity as the Secretary of State may
10determine.

(3) The Regulations must provide that where—

(a) a person ceases to be a member of the body otherwise than on the
expiry of the term of office, and

(b) it appears to the Secretary of State that there are special
15circumstances which make it right for that person to be
compensated,

the body must make a payment to the person by way of compensation of
such amount as the Secretary of State may determine.

Staff

4 20The Regulations must provide that—

(a) the body may appoint such persons to be its employees as the body
considers appropriate, and

(b) the employees are to be appointed on such terms and conditions as
the body may determine.

25Proceedings

5 (1) The Regulations may make provision about the proceedings of the body.

(2) The Regulations may, in particular—

(a) authorise the body to exercise any function by means of committees
consisting wholly or partly of members of the body;

(b) 30provide that the validity of proceedings of the body, or of any such
committee, is not affected by any vacancy among the members or
any defect in the appointment of a member.

Fees

6 (1) The Regulations may make provision—

(a) 35about the setting and charging of fees by the body in connection with
the exercise of its functions;

(b) for the retention by the body of any such fees payable to it;

(c) about the application by the body of such fees.

(2) The Regulations may, in particular, make provision—

(a) 40for the body to be able to set such fees as appear to it to be sufficient
to defray the expenses of the body exercising its functions, taking one
year with another;

(b) for the setting of fees by the body to be subject to the approval of the
Secretary of State.

(3) The expenses referred to in sub-paragraph (2)(a) include any expenses
incurred by the body on such staff, accommodation, services and other
facilities as appear to it to be necessary or expedient for the proper exercise
of its functions.

5Consultation

7 The Regulations may make provision as to the circumstances and manner in
which the body must consult others before exercising any function
conferred on it by the Regulations.

Training and other services

8 (1) 10The Regulations may make provision authorising the body to provide
training or other services to any person.

(2) The Regulations may make provision authorising the body—

(a) to charge for the provision of any such training or other services, and

(b) to calculate any such charge on the basis that it considers to be the
15appropriate commercial basis.

Report and accounts

9 (1) The Regulations must require the body, at least once in each 12 month
period, to report to the Secretary of State on—

(a) the exercise of the functions conferred on it by the Regulations, and

(b) 20such other matters as may be prescribed in the Regulations.

(2) The Regulations must require the Secretary of State to lay before Parliament
a copy of each report received under this paragraph.

(3) Unless section 394 of the Companies Act 2006 applies to the body (duty on
every company to prepare individual accounts), the Regulations must
25provide that the Secretary of State may give directions to the body with
respect to the preparation of its accounts.

(4) Unless the body falls within sub-paragraph (5), the Regulations must
provide that the Secretary of State may give directions to the body with
respect to the audit of its accounts.

(5) 30The body falls within this sub-paragraph if it is a company whose
accounts—

(a) are required to be audited in accordance with Part 16 of the
Companies Act 2006 (see section 475 of that Act), or

(b) are exempt from the requirements of that Part under section 482 of
35that Act (non-profit making companies subject to public sector
audit).

(6) The Regulations may provide that, whether or not section 394 of the
Companies Act 2006 applies to the body, the Secretary of State may direct
that any provisions of that Act specified in the directions are to apply to the
40body with or without modifications.

Funding

10 The Regulations may provide that the Secretary of State may make grants to
the body.

Financial penalties

11 (1) 5This paragraph applies where the Regulations include provision enabling
the body to impose a financial penalty on a person who is, or has been,
authorised to act as an insolvency practitioner (see section 138(5)).

(2) The Regulations—

(a) must include provision about how the body is to determine the
10amount of a penalty, and

(b) may, in particular, prescribe a minimum or maximum amount.

(3) The Regulations must provide that, unless the Secretary of State (with the
consent of the Treasury) otherwise directs, income from penalties imposed
by the body is to be paid into the Consolidated Fund.

(4) 15The Regulations may also, in particular—

(a) include provision for a penalty imposed by the body to be enforced
as a debt;

(b) prescribe conditions that must be met before any action to enforce a
penalty may be taken.

20Status etc.

12 The Regulations must provide that—

(a) the body is not to be regarded as acting on behalf of the Crown, and

(b) its members, officers and employees are not to be regarded as Crown
servants.

25Transfer schemes

13 (1) This paragraph applies if the Regulations make provision designating a
body (whether one established by the Regulations or one already in
existence) in place of a body designated by earlier regulations under section
138; and those bodies are referred to as the “new body” and the “former
30body” respectively.

(2) The Regulations may make provision authorising the Secretary of State to
make a scheme (a “transfer scheme”) for the transfer of property, rights and
liabilities from the former body to the new body.

(3) The Regulations may provide that a transfer scheme may include
35provision—

(a) about the transfer of property, rights and liabilities that could not
otherwise be transferred;

(b) about the transfer of property acquired, and rights and liabilities
arising, after the making of the scheme.

(4) 40The Regulations may provide that a transfer scheme may make
consequential, supplementary, incidental or transitional provision and may
in particular—