Small Business, Enterprise and Employment Bill (HL Bill 103)

Small Business, Enterprise and Employment BillPage 240

(6) In Article 6 (disqualification for persistent default under companies
legislation), after paragraph (3A) insert—

(3B) In this Article “company” includes overseas company.

(7) In Article 8 (disqualification on summary conviction of offence), after
5paragraph (4A) insert—

(4B) In this Article “company” includes overseas company.

(8) In Article 9 (duty of High Court to disqualify unfit directors of insolvent
companies), in paragraph (2), omit “and Article 10”.

(9) In Article 10 (disqualifications under Article 9: applications and
10undertakings), after paragraph (5) insert—

(6) Paragraphs (1A) and (2) of Article 9 apply for the purposes of this
Article as they apply for the purposes of that Article.

(10) Before Article 12 insert—

“Further provision about disqualification undertakings”.

(11) 15In Article 14 (participation in wrongful trading), after paragraph (2) insert—

(3) In this Article “company” includes overseas company.

(12) In Article 20 (application for disqualification order), in paragraph (2), after
“any company” insert “or overseas company”.

(13) In Article 22 (register of disqualification orders and undertakings), in
20paragraph (3)(a), for “10 or 11” substitute “8A, 10, 11, 11C or 11E”.

(14) In Article 23 (admissibility in evidence of statements), in paragraph (1)—

(a) for “9 to 14” substitute “8A to 14, 17A”, and

(b) after “or 19” insert “to 19C”.

(15) In Article 24 (interaction with the Insolvency (Northern Ireland) Order
251989), in paragraphs (1) and (2)—

(a) for “9 to 14” substitute “8A to 14, 17A”, and

(b) after “or 19” insert “to 19C”.

(16) In Article 24D (application of Order to building societies), omit paragraph
(4).

(17) 30Omit Article 24E (application of Order to open-ended investment
companies).

(18) In Article 25 (application of Order to incorporated friendly societies)—

(a) after paragraph (3) insert—

(3A) In relation to an incorporated friendly society, this Order
35applies as if Articles 11A to 11E were omitted., and

(b) omit paragraph (4).

(19) In Article 25A (application of Order to registered societies)—

(a) omit paragraph (2)(d),

(b) after paragraph (2)(f) insert—

(g) 40Articles 11A to 11E are to be disregarded., and

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(c) omit paragraph (3).

10 Omit paragraph 65 of Schedule 2 to the Insolvency (Northern Ireland) Order
2005 (S.I. 2005/1455 (N.I. 10)S.I. 2005/1455 (N.I. 10)).

Section 126

SCHEDULE 9 5Abolition of requirements to hold meetings; opted-out creditors

Part 1 Company insolvency

Introductory

1 The Insolvency Act 1986 is amended in accordance with this Part of this
10Schedule.

Company voluntary arrangements

2 In section 2(2) (nominee’s report on company’s proposal), for paragraphs
(aa) and (b) substitute—

(b) whether, in his opinion, the proposal should be considered
15by a meeting of the company and by the company’s creditors,
and

(c) if in his opinion it should, the date on which, and time and
place at which, he proposes a meeting of the company should
be held.

3 (1) 20Section 3 (summoning of meetings) is amended as follows.

(2) In subsection (1)—

(a) for the words from “that” to “summoned” substitute “under section
2(2) that the proposal should be considered by a meeting of the
company and by the company’s creditors”;

(b) 25for the words from “directs)” to the end substitute directs)—

(a) summon a meeting of the company to consider the
proposal for the time, date and place proposed in the
report, and

(b) seek a decision from the company’s creditors as to
30whether they approve the proposal.

(3) In subsection (2), for the words from “shall” to the end substitute shall—

(a) summon a meeting of the company to consider the proposal
for such time, date and place as he thinks fit, and

(b) seek a decision from the company’s creditors as to whether
35they approve the proposal.

(4) For subsection (3) substitute—

(3) A decision of the company’s creditors as to whether they approve
the proposal is to be made by a qualifying decision procedure.

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(4) Notice of the qualifying decision procedure must be given to every
creditor of the company of whose claim and address the person
seeking the decision is aware.

(5) For the heading substitute “Consideration of proposal”.

4 (1) 5Section 4 (decisions of meetings) is amended as follows.

(2) For subsection (1) substitute—

(1) This section applies where, under section 3—

(a) a meeting of the company is summoned to consider the
proposed voluntary arrangement, and

(b) 10the company’s creditors are asked to decide whether to
approve the proposed voluntary arrangement.

(1A) The company and its creditors may approve the proposed voluntary
arrangement with or without modifications.

(3) In subsection (3) for “A meeting so summoned shall not” substitute “Neither
15the company nor its creditors may”.

(4) In subsection (4)—

(a) for “a meeting so summoned shall not” substitute “neither the
company nor its creditors may”;

(b) omit “the meeting may approve”;

(c) 20after “such a proposal or modification” insert “may be approved”.

(5) In subsection (5) for “each of the meetings” substitute “the meeting of the
company and the qualifying decision procedure”.

(6) In subsection (6) for “either” substitute “the company”.

(7) After subsection (6) insert—

(6A) 25After the company’s creditors have decided whether to approve the
proposed voluntary arrangement the person who sought the
decision must—

(a) report the creditors’ decision to the court, and

(b) immediately after reporting to the court, give notice of the
30creditors’ decision to such persons as may be prescribed.

(8) In the heading, for “meetings” substitute “the company and its creditors”.

5 (1) Section 4A (approval of arrangement) is amended as follows.

(2) In subsection (2)—

(a) in paragraph (a) for “both meetings summoned under section 3”
35substitute “the meeting of the company summoned under section 3
and by the company’s creditors pursuant to that section”;

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

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

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

(2) In subsection (2)—

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(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”.

(3) In 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) 10After subsection (1) insert—

(1A) In 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
15arrangement;

(b) references 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) 20in paragraph (a) for “either of the meetings” substitute “the meeting
of 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) 25In subsection (3)(b)—

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

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

(7) 30In subsection (4), for “one or both” substitute “any”.

(8) In 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) 35for “, a further company or (as the case may be) creditors’” substitute
“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
40(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
45a decision from the company’s creditors (using a

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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) 5In 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) 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.

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)
20is 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) 25For 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) 30A 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,

35unless 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) 40If 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
the proposed voluntary arrangement before the end of the initial

Small Business, Enterprise and Employment BillPage 245

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
5accordance 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
10has 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) 15a 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
20meeting 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
25paragraph 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
30qualifying 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) 35In 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) 40In 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

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(b) immediately 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) 5a meeting of the company is summoned to consider the
proposed voluntary arrangement, and

(b) the nominee seeks a decision from the company’s creditors
as to whether they approve the proposed voluntary
arrangement.

(1A) 10The company and its creditors may approve the proposed
voluntary 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
15“neither the company nor its creditors may”.

(17) In 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) 20for the words from “period” to “held” substitute “relevant period”;

(b) for “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
25ending with the company meeting summoned under
paragraph 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) 30Where under sub-paragraph (7) the nominee is given notice of
proposed 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) 35In paragraph 32(1), after “a” insert “company”.

(21) In 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) 40For 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).

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(23) In 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) 5In paragraph 32(4)—

(a) after “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) 10In paragraph 32(6) for “may resolve” substitute “of the company may
resolve, 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
15meeting of the company resolves, or the company’s creditors
decide, 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
20or (as the case may be) by the company’s creditors.

(2) The 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
25incurred by the committee in the exercise of the proposed
functions.

(2A) A decision of the company’s creditors that such a committee be
established is to be taken as made only if—

(a) the nominee consents, and

(b) 30the creditors by a qualifying decision procedure approve
an 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”
35substitute “the meeting of the company summoned under paragraph
29 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
40“company’s creditors”.

(30) In 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
45the qualifying decision procedure by which the creditors’ decision to
approve the voluntary arrangement was made”.

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(31) In paragraph 37(5)(a)—

(a) omit “of the meetings”;

(b) after “30(3)” insert “and (4)”.

(32) In paragraph 38(1)—

(a) 5in 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) 10After 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) 15references 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
20of 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) 25for “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
30the 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) 35In 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
40arrangement 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
45they approve the original proposal.

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

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

(c) 5after 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
relevant qualifying decision procedure.

(43) 10In 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) after paragraph (c) insert—

(ca) 15require 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) The appropriate regulator must be given notice of any qualifying
20decision 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
participate in (but not vote in) any qualifying decision procedure
25by 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
(8A) and”.

30Administration

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) Omit paragraph 50 and the heading before it.

(4) 35For 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
40statement made under paragraph 49(1).

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