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

(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) 5In 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) 10Section 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) 15in 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
20from the beginning to “fit” substitute “Where an administrative receiver has
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
25creditors,”.

(3) In subsection (2)—

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

(b) omit the words after paragraph (b).

(4) 30Omit 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”.

35Winding-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
40must 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
5companies 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
10liable 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
15opinion—

(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) 20Section 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) 25For paragraph (b) substitute—

“(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 30Omit 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
35days 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) 40For 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
5is 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,
10and

(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
15nominated 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) 20If 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) 25directing 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) 30If the company does not nominate a person to be liquidator at the
meeting at which the resolution for voluntary winding up is passed,
the 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’
35voluntary 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
40whether 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
45the 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
5creditors 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
10(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)
15insert—

“(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
20particular 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
25the 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 30Omit 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) 35Section 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
40section 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
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”.

(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.

(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.”

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.”

(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)”.

(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