Small Business, Enterprise and Employment Bill (HL Bill 91)

(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) 5A “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
established if requested, in accordance with the rules, to do so by
10one-tenth in value of the company’s creditors.

(3C) Subsection (3B) does not apply where the liquidator is the official
receiver.”

37 (1) Section 142 (liquidation committee (Scotland)) is amended as follows.

(2) For subsections (1) to (4) substitute—

“(1) 15This 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
20rules.

(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) 25A 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) 30In 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”.

38 For section 146 (compulsory winding-up - duty to summon final meeting)
substitute—

“146 35Final 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
40account 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
5the 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
10after the last day of the period prescribed by the rules as the period
within which the creditors may object to the liquidator’s release.”

39 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
15contributories,”.

40 (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) 20the company’s creditors under section 100 nominate a person
to be liquidator, or

(b) the procedure by which the company’s creditors were to
have made such a nomination concludes without a
nomination having been made.”

(3) 25Omit 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(1B),”.

41 30In 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) 35from 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.”

42 (1) Section 171 (removal of liquidator in voluntary winding up) is amended as
40follows.

(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) 5the 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
10request 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) 15the 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) 20In the case of a members’ voluntary winding up where the liquidator
has produced an account of the winding up under section 94 (final
account), the liquidator vacates office as soon as the liquidator has
complied with section 94(3) (requirement to send final account to
registrar).

(7) 25In the case of a creditors’ voluntary winding up where the liquidator
has produced an account of the winding up under section 106 (final
account), the liquidator vacates office as soon as the liquidator has
complied with section 106(3) (requirement to send final account etc.
to registrar).”

43 (1) 30Section 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) 35In 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
40directs, 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
45send account etc. to registrar and to court).”

44 (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
5registrar 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
10decision 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
15may, 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) 20the 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) 25if 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) 30otherwise, the time at which the person vacated
office.”

(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
35whether the person should have his release must be made by a
qualifying decision procedure.”

45 (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) 40In 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
45decision 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
5decision 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
10(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
15Secretary 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) 20Where 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.”

46 Omit section 194 (resolutions passed at adjourned meetings).

47 (1) 25Section 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,
30and appoint a person to report the result to the court”.

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

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

(2) In subsection (1)—

(a) omit “and return”;

(b) 35after “or” insert “his final account and statement under”.

(3) In 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”.

49 40In section 202(3) (early dissolution in England and Wales) after “creditors”
insert “, other than opted-out creditors,”.

50 In section 204(2) (early dissolution: Scotland) for “meeting or meetings”
substitute “liquidator has been appointed”.

51 (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) 5after “receipt of” insert “the final account and statement or”;

(b) after “register” insert “them or”;

(c) omit the second “of the notice”.

52 In section 208(2) (misconduct in course of winding up), for “at any meeting”
substitute “in connection with any qualifying decision procedure or deemed
10consent procedure”.

53 (1) Schedule 10 (offences) is amended as follows.

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

(3) In the entry for section 95(8), in column 2, for “s. 95” substitute “s. 95(1) to
(4A)”.

(4) Omit the entry for section 98(6).

(5) 20In the entry for section 99(3), in column 2, for the words from “attend” to
“meeting” substitute “send statement in prescribed form to creditors”.

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

Other provision

54 (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
30“applies to any meeting of the members of a company summoned by the
office-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
“made”.

55 5In section 387(2) and (2A) (definition of “relevant date”) for “meetings to
consider” substitute “consideration of”.

56 In section 433(3)(a) (admissibility of evidence in statement of affairs etc)—

(a) omit “98(6),”;

(b) for “99(3)(a)” substitute “99(3)”.

57 (1) 10Section 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
Act or of rules made under it, by which a decision is sought
15from the creditors of a company, or”.

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

58 In Schedule 8, after paragraph 9 insert—

“9A Provision about how a company’s creditors may nominate a
person to be liquidator, including in the case of a voluntary
20winding up provision conferring functions on the directors of the
company.”

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

(2) In sub-paragraph (1)—

(a) 25after “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) in paragraph (b), for “a meeting of” substitute “seeking a decision
30from”.

Part 2 Individual insolvency

Introductory

60 The Insolvency Act 1986 is amended in accordance with this Part of this
35Schedule.

Individual voluntary arrangements

61 (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) In 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) 5In 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”.

62 (1) Section 256A (nominee’s report on debtor’s proposal) is amended as
10follows.

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

(3) In subsection (3)(b)—

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

(b) 15omit “, and”.

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

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

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

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

“(1) 20This 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) The nominee (or the nominee’s replacement under section 256(3) or
256A(4)) must seek a decision from the debtor’s creditors as to
25whether they approve the proposed voluntary arrangement (unless,
in the case of a report to which section 256 applies, the court
otherwise directs).

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

(2B) Notice of the creditors’ decision procedure must be given to every
30creditor 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
procedure”.

(4) For the heading substitute “Consideration of debtor’s proposal by
35creditors”.

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

(2) For subsection (1) substitute—

“(1) This section applies where under section 257 the debtor’s creditors
are asked to decide whether to approve the proposed voluntary
40arrangement.”

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

(4) In subsection (2)—

(a) after “with” insert “or without”;

(b) 5for “do so” insert “approve it with modifications”.

(5) Omit subsection (6).

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

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

(2) For subsection (1) substitute—

“(1) 10When 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
section 256(3) or 256A(4)) must—

(a) give notice of the creditors’ decision to such persons as may
15be prescribed, and

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

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

67 (1) 20Section 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) In subsection (2)—

(a) in paragraph (a) for “at the meeting” substitute “at the time the
25creditors 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
the proposal was made”.

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

68 (1) 30Section 261 (additional effect on undischarged bankrupt) is amended as
follows.

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

(3) 35In subsection (3)(a), for “decision of the creditors’ meeting” substitute
“creditors’ decision”.

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

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

(3) 40In 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
creditors’ decision procedure”.

(5) In subsection (3)(b)—

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

(b) 5for “the meeting had taken place” substitute “a decision as to
whether to approve the proposed voluntary arrangement had been
made”.

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

(7) 10For 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) any revised proposal the debtor may make, or

(ii) 15in 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
relation to”;

(b) 20for “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
approval of a voluntary arrangement by a decision of the debtor’s creditors
25pursuant 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’”.

70 In section 262B(1) (prosecution of delinquent debtors), for “creditors’
meeting summoned under” substitute “decision of the debtor’s creditors
30pursuant to”.

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

72 In section 263(1) (implementation and supervision of approved voluntary
35arrangement), for “creditors’ meeting summoned under” substitute
“decision of the debtor’s creditors pursuant to”.

Bankruptcy

73 In section 276(1)(b)(ii) (default in connection with voluntary arrangement)
for “at or in connection with a meeting summoned” substitute “in
40connection with a creditors’ decision procedure instigated”.

74 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)”.