Small Business, Enterprise and Employment Bill (HL Bill 57)

(3) In subsections (3), (4)(a) and (6)(a) for “creditors’ meeting” substitute
“company’s creditors”.

6 (1) Section 5 (effect of approval) is amended as follows.

(2) In subsection (2)—

(a) 5in paragraph (a) for “creditors’ meeting” substitute “time the
creditors decided to approve the voluntary arrangement”;

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

(3) 10In subsection (4)(a) after “4(6)” insert “and (6A)”.

7 (1) Section 6 (challenge of decisions) is amended as follows.

(2) In subsection (1)(b) for “either of the meetings” substitute “the meeting of the
company, or in relation to the relevant qualifying decision procedure”.

(3) After subsection (1) insert—

“(1A) 15In this section—

(a) the “relevant qualifying decision procedure” means the
qualifying decision procedure in which the company’s
creditors decide whether to approve a voluntary
arrangement;

(b) 20references to a decision made in the relevant qualifying
decision procedure include any other decision made in that
qualifying decision procedure.”

(4) In subsection (2)—

(a) in paragraph (a) for “either of the meetings” substitute “the meeting
25of the company or in the relevant qualifying decision procedure”;

(b) in paragraph (aa) for “at the creditors’ meeting” substitute “in the
relevant qualifying decision procedure”.

(5) In subsection (3)(a) after “4(6)” insert “and (6A)”.

(6) In subsection (3)(b)—

(a) 30for “creditors’ meeting” substitute “relevant qualifying decision
procedure”;

(b) for “the meeting” substitute “the relevant qualifying decision
procedure”.

(7) In subsection (4), for “one or both” substitute “any”.

(8) 35In subsection (4)(a), for “in question” substitute “of the company, or in the
relevant qualifying decision procedure,”.

(9) In subsection (4)(b)—

(a) for “further meetings” substitute “a further company meeting”;

(b) for “, a further company or (as the case may be) creditors’” substitute
40“and relating to the company meeting, a further company”.

(10) In subsection (4), after paragraph (b) insert—

“(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 the person who
made the original proposal may make, or

(ii) in a case falling within subsection (1)(b) and relating
to the relevant qualifying decision procedure, to seek
5a decision from the company’s creditors (using a
qualifying decision procedure) as to whether they
approve the original proposal.”

(11) In subsection (5) for “for the summoning of meetings to consider” substitute
“or (c) in relation to”.

(12) 10In subsection (6)—

(a) after “meeting” insert “or relevant qualifying decision procedure”;

(b) in paragraph (a) after “(4)(b)” insert “or (c)”.

(13) In subsection (7)—

(a) the words from “a decision” to the end become paragraph (a);

(b) 15in that paragraph (a), after “at a” insert “company”;

(c) after that paragraph (a) insert “, 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
20relevant qualifying decision procedure.”

8 In section 7(2)(a) for “given at one or both of the meetings summoned under”
substitute “of the voluntary arrangement by the company or its creditors (or
both) pursuant to”.

9 (1) Schedule A1 (moratorium where directors propose voluntary arrangement)
25is amended as follows.

(2) For paragraph 6(2)(c) substitute—

“(c) the proposed voluntary arrangement should be
considered by a meeting of the company and by the
company’s creditors.”

(3) 30For paragraph 7(1)(e)(iii) substitute—

“(iii) the proposed voluntary arrangement should be
considered by a meeting of the company and by the
company’s creditors.”

(4) For paragraph 8(2) to (4) substitute—

“(2) 35A 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,

40unless 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
5the 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
10accordance 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
15has 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) For paragraph 8(6)(c) substitute—

“(c) 20a decision of one or both of—

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

(ii) the company’s creditors.”

(6) For the heading before paragraph 29 substitute “Duty to summon company
25meeting and seek creditors’ decision”.

(7) In paragraph 29(1), for the words from “shall” to the end substitute “shall—

(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
30paragraph 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.”

(8) For paragraph 29(2) substitute—

“(2) The decision of the company’s creditors is to be made by a
35qualifying 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.”

(9) In the heading before paragraph 30, for “meetings” substitute “company
meeting and qualifying decision procedure”.

(10) 40In paragraph 30(1) for “meetings summoned under paragraph 29” substitute
“company meeting summoned under paragraph 29 and the qualifying
decision procedure instigated under that paragraph”.

(11) In paragraph 30(2) for “A meeting so summoned” substitute “The company
meeting summoned under paragraph 29”.

(12) 45In paragraph 30(3) for “either” substitute “the company”.

(13) After paragraph 30(3) insert—

“(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) 5immediately after reporting to the court, give notice of the
decision to such persons as may be prescribed.”

(14) For paragraph 31(1) substitute—

“(1) This paragraph applies where under paragraph 29—

(a) a meeting of the company is summoned to consider the
10proposed 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
15voluntary arrangement with or without modifications.”

(15) In paragraph 31(4) for “A meeting summoned under paragraph 29 shall not”
substitute “Neither the company nor its creditors may”.

(16) In paragraph 31(5) for “a meeting so summoned shall not” substitute
“neither the company nor its creditors may”.

(17) 20In paragraph 31(6) for “The meeting may approve such a proposal or
modification” substitute “Such a proposal or modification may be
approved”.

(18) In paragraph 31(7)—

(a) for the words from “period” to “held” substitute “relevant period”;

(b) 25for “those meetings” substitute “the company and its creditors”.

(19) In paragraph 31, after sub-paragraph (7) insert—

“(7A) The “relevant period” is—

(a) in relation to the company, the period of seven days
ending with the company meeting summoned under
30paragraph 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
35proposed 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.”

(20) In paragraph 32(1), after “a” insert “company”.

(21) 40In paragraph 32, after sub-paragraph (1) insert—

“(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.”

(1A) For paragraph 32(2) substitute—

“(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).”

(23) 5In paragraph 32(3)—

(a) for “At any meeting where” substitute “Where”;

(b) after “the meeting” insert “of the company or (as the case may be)
inform the company’s creditors”.

(24) In paragraph 32(4)—

(a) 10after “a meeting” insert “of the company or informs the company’s
creditors,”;

(b) after “resolve” insert “, or (as the case may be) the creditors by a
qualifying decision procedure shall decide,”.

(25) In paragraph 32(6) for “may resolve” substitute “of the company may
15resolve, and the creditors by a qualifying decision procedure may decide,”.

(26) In paragraph 33(3) for “At any meeting where” substitute “Where”.

(27) In paragraph 35, for sub-paragraphs (1) and (2) substitute—

“(1) This paragraph applies where in accordance with paragraph 32 a
meeting of the company resolves, or the company’s creditors
20decide, 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) 25The 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
30functions.

(2A) A decision of the company’s creditors that such a committee be
established has effect only if—

(a) the nominee consents, and

(b) the creditors by a qualifying decision procedure approve
35an estimate of the expenses to be incurred by the
committee in the exercise of the proposed functions.”

(28) In paragraph 36(2)—

(a) in paragraph (a) for “both meetings summoned under paragraph 29”
substitute “the meeting of the company summoned under paragraph
4029 and by the company’s creditors”;

(b) in paragraph (b) for “creditors’ meeting summoned under that
paragraph” substitute “company’s creditors”.

(29) In paragraph 36(3), (4)(a) and (5)(a) for “creditors’ meeting” substitute
“company’s creditors”.

(30) 45In paragraph 37(2)—

(a) in paragraph (a) for “creditors’ meeting” substitute “time the
creditors decided to approve the voluntary arrangement”;

(b) in paragraph (b)(i) for the words from “at that” to “it)” substitute “in
the qualifying decision procedure by which the creditors’ decision to
5approve the voluntary arrangement was made”.

(31) In paragraph 37(5)(a)—

(a) omit “of the meetings”;

(b) after “30(3)” insert “and (4)”.

(32) In paragraph 38(1)—

(a) 10in paragraph (a) for the words from “approved” to “effect” substitute
“which has taken effect under paragraph 37”;

(b) in paragraph (b) for “either of those meetings” substitute “the
meeting of the company summoned under paragraph 29, or in
relation to the relevant qualifying decision procedure”.

(33) 15After paragraph 38(1) insert—

“(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) 20references to a decision made in the relevant qualifying
decision procedure include any other decision made in
that qualifying decision procedure.”

(34) In paragraph 38(2)—

(a) in paragraph (a) for “either of the meetings” substitute “the meeting
25of the company or in the relevant qualifying decision procedure”;

(b) in paragraph (b) for “at the creditors’ meeting” substitute “in the
relevant qualifying decision procedure”.

(35) In paragraph 38(3)(a) after “30(3)” insert “and (4)”.

(36) In paragraph 38(3)(b)—

(a) 30for “creditors’ meeting” substitute “relevant qualifying decision
procedure”;

(b) for “the meeting” substitute “the relevant qualifying decision
procedure”.

(37) In paragraph 38(4)(a)(ii) for “in question” substitute “of the company, or in
35the relevant qualifying decision procedure,”.

(38) In paragraph 38(4)(b)—

(a) for “further meetings” substitute “a further company meeting”;

(b) after “(1)(b)” insert “and relating to the company meeting”;

(c) omit “or (as the case may be) creditors’”.

(39) 40In paragraph 38(4), after paragraph (b) insert—

“(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
45arrangement 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
5they approve the original proposal.”

(40) In paragraph 38(5), after “(4)(b)(i)” insert “or (c)(i)”.

(41) In paragraph 38(6) and (7)(a), after “(4)(b)” insert “or (c)”.

(42) In paragraph 38(9)—

(a) the words from “a decision” to the end become paragraph (a);

(b) 10in that paragraph (a), after “at a” insert “company”;

(c) after that paragraph (a) insert “, 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
15relevant qualifying decision procedure.”

(43) In paragraph 39(1) for the words from “approved” to the end substitute “has
taken effect under paragraph 37.”

(44) In paragraph 40(5)—

(a) in paragraph (c), omit “creditors or”;

(b) 20after paragraph (c) insert—

“(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,”.

(45) For paragraph 44(8) substitute—

“(8) 25The 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
30participate 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.”

(46) Omit paragraph 44(9)(a).

(47) In paragraph 44(17A)(b) for “sub-paragraph” substitute “sub-paragraphs
35(8A) and”.

Administration

10 (1) Schedule B1 (administration) is amended as follows.

(2) In paragraph 49(4)(b), after “company” insert “, other than an opted-out
creditor,”.

(3) 40Omit paragraph 50 and the heading before it.

(4) For the heading before paragraph 51 substitute “Consideration of
administrator’s proposals by creditors”.

(5) In paragraph 51, for sub-paragraphs (1) to (3) substitute—

“(1) The administrator must seek a decision from the company’s
creditors as to whether they approve the proposals set out in the
statement made under paragraph 49(1).

(2) 5The initial decision date for that decision must be within the
period of 10 weeks beginning with the day on which the company
enters administration.

(3) The “initial decision date” for that decision—

(a) if the decision is initially sought using the deemed consent
10procedure, is the date on which a decision will be made if
the creditors by that procedure approve the proposals, 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
15decision procedure (assuming that date does not change
after the procedure is instigated).”

(6) In paragraph 52(2), for the words from “summon” to “requested” substitute
“seek a decision from the company’s creditors as to whether they approve
the proposals set out in the statement made under paragraph 49(1) if
20requested to do so”.

(7) For paragraph 52(3) substitute—

“(3) Where a decision is sought by virtue of sub-paragraph (2) the
initial decision date (as defined in paragraph 51(3)) must be within
the prescribed period.”

(8) 25For the heading before paragraph 53 substitute “Creditors’ decision”.

(9) In paragraph 53, for sub-paragraph (1) substitute—

“(1) The company’s creditors may approve the administrator’s
proposals—

(a) without modification, or

(b) 30with modification to which the administrator consents.”

(10) In paragraph 53(2)—

(a) for “After the conclusion of an initial creditors’ meeting the”
substitute “The”;

(b) after “taken” insert “by the company’s creditors”.

(11) 35In paragraph 54(1)(a) for “at an initial creditors’ meeting” substitute “by the
company’s creditors”.

(12) Omit paragraph 54(2)(a).

(13) In paragraph 54(2)(b)—

(a) omit “with the notice of the meeting sent”;

(b) 40after “creditor” insert “who is not an opted-out creditor”.

(14) For paragraph 54(2)(d) substitute—

“(d) seek a decision from the company’s creditors as to whether
they approve the proposed revision.”

(15) For paragraph 54(5) substitute—

“(5) The company’s creditors may approve the proposed revision—

(a) without modification, or

(b) with modification to which the administrator consents.”

(16) 5In paragraph 54(6)—

(a) for “After the conclusion of a creditors’ meeting the” substitute
“The”;

(b) after “taken” insert “by the company’s creditors”.

(17) For paragraph 55(1) substitute—

“(1) 10This paragraph applies where an administrator—

(a) reports to the court under paragraph 53 that a company’s
creditors have failed to approve the administrator’s
proposals, or

(b) reports to the court under paragraph 54 that a company’s
15creditors have failed to approve a revision of the
administrator’s proposals.”

(18) In the heading before paragraph 56, for “meetings” substitute “decisions”.

(19) In paragraph 56(1), for “summon a creditors’ meeting”—

(a) in the first place, substitute “seek a decision from the company’s
20creditors on a matter”;

(b) in the second place, substitute “do so”.

(20) In paragraph 56(2), for “summon a creditors’ meeting” substitute “seek a
decision from the company’s creditors on a matter”.

(21) In paragraph 57(1), for “A creditors’ meeting may” substitute “The
25company’s creditors may, in accordance with the rules,”.

(22) Omit paragraph 58 and the heading before it.

(23) In paragraph 62, for the words from “may” to the end substitute “may—

(a) call a meeting of members of the company;

(b) seek a decision on any matter from the company’s
30creditors.”

(24) For paragraph 74(4)(c) substitute—

“(c) require a decision of the company’s creditors to be sought
on a matter;”.

(25) For paragraph 78(1)(b) substitute—

“(b) 35if the company has unsecured debts, the unsecured
creditors of the company.”

(26) For paragraph 78(2)(b)(ii) substitute—

“(ii) the preferential creditors of the company.”

(27) After paragraph 78(2) insert—

“(2A) 40Whether 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.”

(28) Omit paragraph 78(3).

(29) In paragraph 79(2)(c) for “a creditors’ meeting requires him to” substitute
“the company’s creditors decide that he must”.

(30) In paragraph 80(4) after “company” insert “, other than an opted-out
5creditor,”.

(31) In paragraph 83(5)(b) after “creditor” insert “, other than an opted-out
creditor,”.

(32) In paragraph 84(5)(b) after “creditor” insert “, other than an opted-out
creditor,”.

(33) 10In the heading before paragraph 97, for “meeting” substitute “decision”.

(34) For paragraph 97(2) and (3) substitute—

“(2) The administrator may be replaced by a decision of the creditors
made by a qualifying decision procedure.

(3) The decision has effect only if, before the decision is made, the new
15administrator 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) 20For 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
25they 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
30creditors 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
35creditors 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) 40Schedule 10 (offences) is amended as follows.