8. Power of court to make order9. Application for order(1) Subject to this section, if the court-
(a) is satisfied that a company is or is likely to become unable to pay its debts (within the meaning given to that expression by section 123 of this Act), and
(b) considers that the making of an order under this section would be likely to achieve one or more of the purposes mentioned below, the court may make an administration order in relation to the company.
(1A) For the purposes of a petition presented by the Bank of England alone or together with any other party an authorised institution or former authorised institutition within the meaning of the Banking Act 1987 which defaults in an obligation to pay any sum due and payable in respect of a deposit within the meaning of section 92 of that Act shall be deemed to be unable to pay its debts as mentioned in subsection (1) above
(2) An administration order is an order directing that, during the period for which the order is in force, the affairs, business and property of the company shall be managed by a person (" the administrator ") appointed for the purpose by the court.
(3) The purposes for whose achievement an administration order my be made are-
(a) the survival of the company, and the whole or any part of its undertaking, as a going concern;
(b) the approval of a voluntary arrangement under Part1;
(c) the sanctioning under section 425 of the Companies Act of compromise and any such persons as are mentioned in that section; and
(d) a more advantageous realisation of the company's assets than would be effected on a winding up;
and the order shall specify the purpose or purposes for which it is made.(4) An administration order shall not be made in relation to a company after it has gone into liquidation , nor where it is-
(a) an insurance company within the meaning of the Insurance Companies Act 1982,
10. Effect of application(1) An application to the court for an administration order shall be by petition presented either by the company or the directors, or by the Bank of England or by a creditor or creditors (including any contingent or prospective creditor or creditors), or by the clerk of a magistrates' court in excercise of the power conferred by section 87A of the Magistrates' Courts Act 1980 (enforcement of fines imposed on a companies) or by all or any of these parties, together or separately.
(2) Where a petition is presented to the court-
(a) notice of the petition shall be given forthwith to any person who has appointed, or is or may be entitled to appoint, an administrative receiver of the company to the Bank of England (unless it is a petitioner), and to such other persons as may be prescribed, and
(b) the petition shall not be withdrawn except with the leave of the court.
(3) Where the court is satisfied that there is an administrative receiver of the company, the court shall dismiss the petition unless it is also satisfied either-
(a) that the person by whom or on whose behalf the receiver was appointed has consented to the making of the order, or
(b) that, if an administration order were made, any security by virtue of which the receiver was appointed would-
(i)be void against the administrator to any extent by virtue of the provisions of Part XII of the Companies Act 1985 (registration of company charges),
(ii) be liable to be released or discharged under sections 238 to 240 in part VI (transactions at an undervalue and preferences),
(iii) be avoided under section 245 in that Part (avoidance of floating charges), or
(iv) be challengeable under section 242 (gratuitous alienations) or 243 (unfair preferences) in that Part, or under any rule of law in Scotland.
(4) Subject to subsection (3), on hearing any petition the court may dismiss it, or adjourn the hearing conditionally or unconditionally, or make an interim order that it thinks fit.
(5) Without prejudice to the generality of subsection (4), an interim order under that subsection may restrict the exercise of any powers of the directors of the company (whether by reference to the consent of the court or of a person qualified to act as an insolvency practitioner in relation to the company, or otherwise).
11. Effect of order(1) During the period beginning with the presentation of a petition for an administration order and ending with the making of such an order or the dismissal of the petition-
(a) no resolution may be passed or order made for the winding up of the company;
(b) no steps may be taken to enforce any security over the company's property, or to repossess goods in the company's possession under any hire-purchase agreement, except with the leave of the court and subject to such terms as the court may impose; and
(c) no other proceedings and no execution or other legal process may be commenced or continued, and no distress may be levied, against the company and its property except with the leave of the court and subject to such terms as aforesaid.
(2) Nothing in subsection (1) requires the leave of the court -
(a) for the presentation of a petition for the winding up of the company,
(b) for the appointment of an administrative receiver of the company, or
(c) for the carrying out by such a receiver (whenever appointed) of any of his functions.
(3) Where-
(a) a petition for an administration order is presented at a time when there is an administrative receiver of the company, and
(b) that person by or on whose behalf the receiver was appointed has not consented to the making of the order,
the period mentioned in subsection (1) is deemed no to begin unless and until that person so consents.
(4) References in this section and the next hire-purchase agreements include conditional sale agreements, chattel leasing agreements and retention of title agreements.
(5) In the application of this section and the next to Scotland, references to execution being commenced or continued include references to diligence being carried out or continued, and references to distress being levied or omitted.
12. Notification of order(1) On the making of an administrative order-
(a) any petition for the winding up of the company shall be dismissed, and
(b) any administrative receiver of the company shall vacate office.
(2) Where an administration order has been made, any receiver of part of the company's property shall vacate office on being required to do so by the administrator.
(3) During the period for which an administration order is in force-
(a) no resolution may be passed or order made for the winding up of the company;
(b) no administrative receiver of the company may be appointed;
(c) no other steps may be taken to enforce any security over the company's possession under any hire-purchase agreement, except with the consent of the administrator or with leave of the court and the subject (where the court gives leave) to such terms as the courts may impose; and
(d) no other proceedings and no execution or other legal process may be commenced or continued, and no distress may be levied, against the company or its property except with the consent of the administrator or the leave of the court and subject (where the court gives leave) to terms as aforesaid.
(4) Where at any time an administrative receiver of the company has vacated office under subsection (1)(b), or a receiver or part of the company's property has vacated office under subsection (2)-
shall be charged on and (subject to subsection (3) above) paid out of any property of the company which was in his custody or under his control at that time in priority to any security held by the person by or on whose behalf he was appointed.(a) his remuneration and any expenses properly incurred by him, and
(b) any indemnity to which he is entitled out of the assets of the company,
(5) Neither an administrative receiver who vacates office under subsection (1)(b) nor a receiver who vacates office under subsection (2) is required on or after so vacating office to take any steps for the purpose of complying with any duty imposed on him by section 40 or 59 of this Act (duty to pay preferential creditors.)
(1) Every invoice, order for goods or business latter which , at a time when an administration order is in force in relation to a company, is issued by or on behalf of the company or the administrator, being a document on or in which the company's name appears, shall also contain the administrator's name and a statement that the affairs, business and property of the company are being managed by the administrator.
(2) If default is made in complying with this section, the company and any of the following persons, who without reasonable excuse authorises or permits the default, namely, the administrator and any officer of the company, is liable to a fine.
13. Appointment of administrator14. General powers(1) The administrator of a company shall be appointed Appointment either by the administration order or by an order under the new subsection.
(2) If the vacancy occurs by death, resignation or otherwise in the office of the administrator, the court may be order fill the vacancy.
(3) An application for an order under subsection (2) may be made-
(a) by any continuing administrator of the company; or
(b) where there is no such administrator, by the creditors' committee established under section 26 below; or
(c) where there is no such administrator and no such committee, by the company or the directors or by any creditor or creditors of the company or
(d) by the Bank of England.
15. Power to deal with charged property, etc.(1) The administrator of a company-
(a) may do all such things as may be necessary for the management of the affairs, business and property of the company, and
(b) without prejudice to the generality of paragraph (a), has the powers specified in Schedule 1 to this Act;
and in the application of that Schedule to the administrator of a company the words"he" and "him" refer to the administrator.(2) The administrator also has the power-
(a) to remove directors of the company and to appoint any person to be director of it, whether to fill a vacancy or otherwise, and
(b) to call any meeting of the members or creditors of the company.
(3) The administrator may apply to the court for directions in relation to any particular matter arising in connection with the carrying out of his functions.
(4) Any power conferred on the company or its officers , whether by this Act or the Companies Act or by the memorandum or articles of association, which could be exercised in such a way as to interfere with the exercise by the administrator of his powers is not exercisable except with the consent of the administrator, which may be given either generally or in relation to particular cases.
(5) In exercising his powers the administrator is deemed to act as the company's agent.
(6) A person dealing with the administrator in good faith and for value is not concerned to inquire whether the administrator is acting within this powers.
16. Operation of Section 15 in Scotland(1) The administrator of a company may dispose of or otherwise exercise his powers in relation to any property of the company which is subject to a security to which this subsection applies as if the property were not subject to the security.
(2) Where, on an application by the administrator, the court is satisfied that the disposal(with or without other assets) of-
would be likely to promote the purpose or one or more of the purposes specified in the administration order, the court may by order authorise the administrator to dispose of the property as if it were not subject to the security or to dispose of the goods as if all rights of the owner under the hire-purchase agreement were vested in the company.(a) any property of the company subject to a security to which this subsection applies, or
(b) any goods in the possession of the company under a hire-purchase agreement,
(3) Subsection(1) applies to any security which, as created, was a floating charge; and subsection (2) applies to any other security.
(4) Where property is disposed of under subsection (1), the holder of the security has the same priority in respect of any property of the company directly in respect of any property of the company directly or indirectly representing the property disposed of as he would have had in respect of the property subject to the security.
(5) It shall be a condition of an order under subsection (2) that-
shall be applied towards discharging the sums secured by the security or payable under the hire-purchase agreement.(a) the net proceeds of the disposal, and
(b) where those proceeds are less than such amount as may be determined by the court to be the net amount which would be realised on a sale of the property or goods in the open market by a willing vendor, such sums as may be required to make good the deficiency,
(6) Where a condition imposed in pursuance of subsection (5) relates to two or more securities, that condition requires the net proceeds of the disposal and, were paragraph (b) of that subsection applies, the sums mentioned in that paragraph to be applied towards discharging the sums secured by those securities in the order of their priorities.
(7) An office copy of an order under subsection (2) shall, within 14 days after the making of the order, be sent by the administrator to the registrar of companies.
(8) If the administrator without reasonable excuse fails to comply with subsection (7), he is liable to a fine and, for continued contravention, to a daily default fine.
(9) References in this section to hire-purchase agreements and include conditional sale agreements, chattel leasing agreements and retention of title agreements.
17. General duties(1)Where property is disposed of under section 15 in its Operation of application to Scotland, the administrator shall grant to the dispense an appropriate document of transfer or conveyance of the property, and
has the effect of disencumbering the property of or as the case may be, freeing the property from the security.(a) that document, or
(b) where any recording, intimation or registration of the document is a legal requirement for completion of title to the property, that recording, intimation or registration,
(2) Where goods in the possession of the company under a hire-purchase agreement, conditional sale agreement, chattel leasing agreement or retention of title agreement are disposed of under section 15 in its application to Scotland, the disposal has the effect of extinguishing, as against the disponee, all rights of the owner of the goods under the agreement.
18. Discharge of variation of administration order(1) The administrator of a company shall, on his appointment, take into his custody or under his control all the property to which the company is or appears to be entitled
(2) The administrator shall manage the affairs, business and property of the company-
(a) at any time before proposals have been approved(with or without modifications) under section 24 below, in accordance with any directions given by the court, and
(b) at any time after proposals have been so approved, in accordance with those proposals as from time to time revised, whether by him or a predecessor of his.
(3) The administrator shall summons a meeting of the company's creditors if-
(a) he is requested, in accordance with the rules, to do so by one-tenth, in value , of the company's creditors, or
(b) he is directed to do so by the court.
19. Vacation of office(1) The administrator of a company may at any time apply to the court for the administration order to be discharged, or to be varied so as to specify an additional purpose.
(2) The administrator shall make an application under this section if-
(a) it appears to him that the purpose or each of the purposes specified in the order either had been achieved or is incapable of achievement, or
(b) he is required to do so by a meeting of the company's creditors summoned for the purpose in accordance with the rules.
(3) On the hearing of an application under this section, the court may be order discharge or vary the administration order and make such consequential provisions as it thinks fit, or adjourn the hearing conditionally or unconditionally, or make an interim order or any other order it thinks fit.
(4) Where the administration order is discharges or varied the administrator shall, within 14 days after the making of the order effecting the discharge or variation, send an office copy of that order to the registrar of companies.
(5) If the administrator without reasonable excuse fails to comply with subsection (4), hie is liable to a fine and, for continues contravention, to a daily default fine.
20. Release of administrator(1) The administrator of the company may at any time be removed from office by order of the court and may, in the prescribed circumstances, resign his office by giving notice of his resignation to the court.
(2) The administrator will vacate office if-
(a) he creases to be qualified to act as an insolvency practitioner in relation to the company, or
(b) the administration order is discharges.
(3) Where at any time a person ceases to be administrator, the following subsections apply. apply.
(4) His remuneration and any expenses properly incurred by his shall be charged on and paid out of any property of the company which is in his custody or under his control at that time in priority to any security to which section 15(1) then applies.
(5) Any sums payable in respect of debts or liabilities incurred, while he was administrator, under contracts entered into ... by him or a predecessor of his in the carrying out of his or the predecessor's functions shall be charged on and paid out of any such property as is mentioned in subsection (4) in priority to any charge arising under that subsection.
(6) Any sums payable in respect of liabilities incurred, while he was administrator, under contracts of employment adopted by him or a predecessor of his in the carrying out of his or the predecessor's functions shall, to the extent that the liabilities are qualifying liabilities, be charged on and paid out of any such property as is mentioned in subsection (4) and enjoy the same priority as any sums to which subsection (5) applies.
For this purpose, the administrator is not to be taken to have adopted a contract of employment by reason of anything done or omitted to be done within 14 days after his appointment.
(7) For the purposes of subsection (6), a liability under a contract of employment is a qualifying liability if-
(a) it is a liability to pay a sum by way of wages or salary or contribution to an occupational pension scheme, and(b) it is in respect of services rendered wholly or partly after the adoption of the contract.
(8) There shall be disregarded for the purposes of subsection (6) so much of any qualifying liability as represents payment in respect of services rendered before the adoption of the contract.
(9) For the purposes of subsections (7) and (8)-
(a)wages or salary payable in respect of a period of holiday or absence from work through sickness or other good cause are deemed to be wages or (as the case may be) salary in respect of services rendered in that period, and(10) In subsection (9)(a), the reference to wages or salary payable in respect of a period of holiday includes any sums which, if they had been paid, would have been treated for the purposes of the enactments relating to social security as earnings in respect of that period.(b) a sum payable in lieu of holiday is deemed to be wages or (as the case may be) salary in respect of services rendered in the period by reference to which the holiday entitlement arose.
(1) A person who has ceased to be administrator of a company has his release with effect from the following time, this is to say-
(a) in the case of a person who has died, the time at which notice is given to the court in accordance with the rules that he has ceased to hold office;
(b) in any other case, such as the court may determine.
(2) Where a person has his release under this section, he is, with effect from the time specified above, discharge from all liability both in respect or omissions of his in the administration and otherwise in relation to his conduct as administrator.
(3) However, nothing in this section prevents the exercise, in relation to a person who has had his release as above, of the court's powers under section 212 in Chapter X of Part IV (summary remedy against delinquent Directors, liquidators, etc.).
21. Information to be given by administator22. Statement of affairs to be submitted to administrator(1) Where an administration order has been made, the administrator shall-
(a) forthwith send to the company and publish in the prescribed manner a notice of the order, and(b) within 28 days after the making of the order, unless the court otherwise directs, send such notice to all creditors of the company (so far as he is aware of their addresses).
(2) Where an administration order has been made, the administrator shall also, within 14 days after the making of the order, send an office copy of the order to the registrar of companies and to such persons as may be prescribed.
(3) If the administrator without reasonable excuse fails to comply with this section, he is liable to a fine and, for continues contravention, to a daily default fine.
23. Statement of proposals(1) Where an administration order has been made, the administrator shall forthwith require some or all of the persons mentioned below to make out and submit to him a statement in the prescribed form as to the affairs of the company.
(2) The statement shall be verified by affidavit by the persons required to submit it and shall show-
(a) particulars of the company's assets, debts and liabilities;
(b) the names and addresses of its creditors;
(c) the securities held by them respectively;
(d) the dates when the securities were respectively given; and
(e) such further or other information as may be prescribed.
(3) The persons referred to in subsection (1) are-
(a) those who are or have been officers of the company;
(b) those who are or have part in the company's formation at any time within one year before the date of the administration order;
(c) those who are in the company's employment or have been in its employment within that year, and are in the administrator's opinion capable of giving the information required;
(d) those who are or have been within that year officers of or in the employment of a company which is, or within that year was, an officer of the company.
In this subsection "employment" includes employment under a contract for services.(4) Where any persons are required under this section to submit a statement of affairs to the administrator, they shall do so (subject to the next subsection) before the end of the period of 21 days beginning with the day after that on which the prescribed notice of the requirement is given to them by the administrator.
(5) The administrator, if he thinks fit, may-
(a) at any time release a person from an obligation imposed on him under subsection (1) or (2), or
(b) either when giving notice under subsection (4) or subsequently, extend the period so mentioned;
and where the administrator has refused to exercise a power conferred by this subsection, the court, if it thinks fit, may exercise it.(6) If a person without reasonable excuse fails to comply with any obligation imposed under this section, he is liable to a fine and, for continued contravention, to a daily default fine.
24. Consideration of proposals by creditors' meeting(1) Where an administration order has been made, the Statement of administrator shall, within 3 months(or such longer period as the court may allow)after the making of the order-
(a) send to the registrar of companies, the Bank of England and (so far as he is aware of their addresses) to all creditors a statement of his proposals for achieving the purpose or purposes specified in the order, and
(b) lay a copy of the statement before a meeting of the company's creditors summoned for the purpose on not less than 14days' notice.
(2) The administrator shall also, within 3 months(or such longer period as the court may allow) after the making of the order, either-
(a) send a copy of the statement(so far as he is aware of their addresses)to all members of the company, or
(b) publish in the prescribed manner a notice stating an address to which members of the company should write for copies of the statement to be sent to them free of charge
(3) If the administrator without reasonable excuse fails to comply with this section, he is liable to a fine and, for continues contravention, to a daily default fine.
25. Approval of substantial revisions(1) A meeting of creditors summoned under section 23 shall decide whether to approve the administrator's proposals.
(2) The meeting may approve the approvals with modifications, but shall not do so unless the administrator consents to each modification.
(3) Subject as above, the meeting shall be conducted in accordance with the rules.
(4) After the conclusion of the meeting in accordance with the rules, the administrator shall report the result of the meeting to the court and shall give notice of that result to the registrar of companies and to such persons as may be prescribed.
(5) If a report is given to the court under subsection (4) that the meeting had declined to approve the administrator's proposals (with or without modifications), the court may by order discharge the administration order and make such consequential provision as it thinks fit, or adjourn the hearing conditionally or unconditionally, or make an interim order or any other order that it thinks fit.
(6) Where the administration order is discharged, the administrator shall, within 14 days after the making of the order effecting the discharge, send an office copy of that order to the registrar of companies.
(7) If the administrator without reasonable excuse fails to comply with subsection (6), he is liable to a fine and, for continues contravention, to a daily default fine.
26. Creditors' committee(1) This section applies where-
(a) proposals have been approved (with or without modifications)under section 24, and
(b) the administrator proposes to make revisions of those proposals which appear to him to be substantial.
(2) The administrator shall-
(a) send to all creditors of the company (so far as he is aware of their addresses) a statement in the prescribed form of his proposed revisions, and
(b) lay a copy of the statement before a meeting of the company's creditors summoned for the purpose on not less that 14 days' notice;
and he shall not make the proposed revisions unless they are approved by the meeting.(3) The administrator shall also either-
(a) send a copy of the statement (so far as he is aware of their addresses) to all members of the company, or
(b) publish in the prescribed manner a notice stating an address to which members of the company should write for copies of the statement to be sent to them free of charge.
(4) The meeting of creditors may approve the proposed revisions with modifications, but shall not do so unless the administrator consents to each modification.
(5) Subject as above, the meeting shall be conducted in accordance with rules.
(6) After the conclusion of the meeting in accordance with the rules, the administrator shall give notice of the results of the meeting to the registrar of companies and to such persons as may be prescribed.
27. Protection of interests of creditors and members(1) Where a meeting of creditors summoned under section 23 has approved the administrator's proposals (with or without modifications), the meeting may, if it thinks fit, establish a committee ("the creditor's committee") to exercise the functions conferred on it by or under this Act.
(2) If such a committee is established, the committee may, on giving not less that 7 days' notice, require the administrator to attend before it at any reasonable time and furnish it with such information relating to the carrying out of his functions as it may reasonably require.
(1) At any time when an administration order is in force the Bank of England, the Deposit Protection Board, or a creditor or member of the company may apply to the court by petition for an order under this section on the ground-
(a) that the company's affairs, business and property are being or have been managed by the administrator in a manner which is unfairly prejudicial to the interests of its creditors or members generally, or of some part of its creditors or members generally, or of some part of its creditors or members (including, where the applicant is a creditor or a member, at least himself), or
(b)that any actual or proposed act or omission of the administrator is or would be so prejudicial.
(2) On an application for an order under this section the court may, subject as follows, make such order as it thinks fit for giving relief in respect of the matters complained of, or adjourn the hearing conditionally or unconditionally, or make an interim order or any other order that it thinks fit.
(3) An order under this section shall not prejudice or prevent-
(a) the implementation of a voluntary arrangement approved under section 4 in Part I, or any compromise or arrangement sanctioned under section 425 of the Companies Act; or
(b) where the application for the order was made more than 28 days after the approval of any proposals or revised proposals under section 24 or 25, the implementation of those proposals or revised proposals.
(4) Subject as above, an order under this section may in particular-
(a) regulate the future management by the administrator of the company's affairs, business and property;
(b) require the administrator to refrain from doing or continuing an act complained of by the petitioner, or to do an act which the petitioner has complained he has omitted to do;
(c) require the summoning of the meeting of creditors or members for the purpose of considering such matters as the court may direct;
(d) discharge the administration order and make such consequential provision as the court thinks fit.
(5) Nothing in section 15 or 16 is to be taken as prejudicing applications to the court under this section.
(6) Where the administration order is discharged, the administrator shall, within 14 days after the making of the order effecting the discharge, send an office copy of that order to the registrar of companies; and if without reasonable excuse he fails to comply with this subsection, he is liable to a fine and, for continues contravention, to a daily default fine.
28. Extent of this ChapterThis chapter does not apply to receivers appointed under Chapter II of this Part (Scotland).
29. Definitions(1) It is herby declared that, except where the context otherwise requires;30. Disqualification of body corporate from acting as receiver(a) any reference in the Companies Act or this Act to a receiver or manager of the property of a company, or to a receiver of it, includes a receiver or manager, or (as the case may be) a receiver of part only of that property and a receiver only if the income arising from the property or from part of it, and;
(b) any reference in the Companies Act to the appointment of a receiver or manager under powers contained in an instrument includes an appointment made under powers which, by virtue of any enactment, are implied in and have effect as if contained in an instrument.
(2) In this Chapter "administrative receiver" means;
(a) a receiver or manager of the whole (or substantially the whole) of a company's property appointed by or on behalf of the holders of any debentures of the company secured by a charge which, as created, was a floating charge, or by such a charge and one or more other securities; or
(b) a person who would be such a receiver or manager but for the appointment of some other person as the receiver of part of the company's property.
31. Disqualification of undischrged bankruptA body corporate is not qualified for appointment as receiver of the property of a company, and any body corporate which acts as such a receiver is liable to a fine.
32. Power for court to appoint official receiverIf a person being an undischarged bankrupt acts as receiver or manager of the property of a company on behalf of debenture holders, he is liable to imprisonment or a fine, or both.
This does not apply to a receiver or a manager acting under an appointment made by the court.
Where the application is made to the court to appoint a receiver on behalf of the debenture holders or other creditors of a company which is being wound up by the court, the official receiver may be appointed.
33. Time from which appointment is effective
Receivers and managers appointed out of court (1) The appointment of a person as a receiver or manager of a company's property under powers contained in an instrument;34. Liability for invalid appointment(a) is of no effect unless it is accepted by that person before the end of the business day next following that on which the instrument of appointment is received by him or on his behalf, and
(b) subject to this, is deemed to be made at the time at which the instrument is so received.
(2) This section applies to the appointment of two or more persons as joint receivers or managers of a company's property under powers contained in an instrument, subject to such modifications as may be prescribed by the rules.
Where the appointment of a person as the receiver or manager of a company's property under powers contained in an instrument is discovered to be invalid (whether by virtue of the invalidity of the instrument or otherwise), the court may order the person by whom or on whose behalf the appointment was made to indemnify the person appointed against any liability which arises solely by reason of the invalidity of the appointment.
35. Application to court for directions(1) A receiver or manager of the property of the company appointed under powers contained in an instrument, or the persons by whom or on whose behalf a receiver or manager has been so appointed, may apply to the court for directions in relation to any particular matter arising in connection with the performance of the functions of the receiver or manager.36. Court's power to fix remuneration(2) On such an application, the court may give such directions, or may make such order declaring the rights of persons before the court or otherwise, as it thinks fit.
(1) The court may, on an application made by the liquidator of a company, by order fix the amount to be paid by way of remuneration to a person who, under powers contained in an instrument, has been appointed receiver or manager of the company's property.37. Liability for contracts, etc.(2) The court's power under subsection (1), where no previous order has been made with respect thereto under the subsection;
(a) extends to fixing the remuneration for any period before the making of the order or the application for it,
(b) is exercisable notwithstanding that the receiver or manager has died or ceased to act before the making of the order or the application, and
(c) where the receiver or manager has been paid or has retained for his remuneration for any period before the making of the order any amount in excess of that so fixed for that period, extends to requiring him or his personal representatives to account for the excess or such part of it as may be specified in the order.
But the power conferred by paragraph (c) shall not be exercised as respects any period before the making of the application for the order under this section, unless in the court's opinion there are special circumstances making it proper for the power to be exercised.
(3) The court may from time to time on an application made either by the liquidator or by the receiver or manager, vary or amend an order made under subsection (1).
(1) A receiver or manager appointed under powers contained in an instrument (other than an administrative receiver) is, to the same extent as if he had been appointed by order of the court;38. Receivership accounts to be delivered to registrar(a) personally liable on any contract entered into by him in performance of his functions (except in so far as the contract otherwise provides) and on any contract of employment adopted by him in the performance of those functions, and
(b) entitled in respect of that liability to indemnity out of the assets.
(2) For those purposes of subsection (1)(a), the receiver or manager is not to be taken to have adopted a contract of employment by reason of anything done or omitted to be done within 14 days after his appointment.
(3) Subsection (1) does not limit any right to indemnity which the receiver or manager would have apart from it, nor limit his liability on contracts entered into without authority, nor confer any right to indemnity in respect of that liability.
(4) Where at any time the receiver or manager so appointed vacates office;
(a) his remuneration and any expenses properly incurred by him, and
(b) any indemnity to which he is entitles out of the assets of the company, shall be charges on and paid out of any property of the company which is in his custody or under his control at that time in priority to any charge or other security held by the person by or on whose behalf he was appointed.
(1) Except in the case of an administrative receiver, every receiver or manager of a company's property who has been appointed under powers contained in an instrument shall deliver to the registrar of companies for registration the requisite accounts of his receipts and payments.(2) The accounts shall be delivered within one month (or such longer periods as the registrar may allow) after the expiration of 12 months from the date of his appointment and of every subsequent period of 6 months, and also within one month after he ceases to act as receiver or manager.
(3) The requisite accounts shall be an abstract in the prescribed form showing;
(a) receipts and payments during the relevant period of 12 or 6 months, or
(b) where the receiver or manager ceases to act, receipts and payments during the period from the end of the period of 12 or 6 months to which the last preceding abstract related (or, if no preceding abstract has been delivered under this section, from the date of his appointment) up to the date of his so ceasing, and the aggregate amount of receipts and payments during all preceding periods since his appointment.
(4) In this section "prescribed" means prescribed by regulations made by statutory instrument by the Secretary of State.
(5) A receiver or manager who makes default in complying with this section is liable to a fine and, for continued contravention, to a daily default fine.
39. Notification that receiver of manager appointed(1) When a receiver or manager of the property of a company has been appointed , every invoice, order for goods or business letter issued by or on behalf of the company or the receiver or manager or the liquidator of the company, being a document on or in which the company's name appears, shall contain a statement that a receiver or manager has been appointed.40. Payment of debts out of assets subject to floating charge(1) The following applies, in the case of a company, where a receiver is appointed on behalf of the holders of any debentures of the company secured by a charge which, as created, was a floating charge.41. Enforcement of duty to make returns(2) If the company is not at the time in course of being wound up, its preferential debts (within the meaning given to that expression by section 386 in Part XII) shall be paid out of the assets coming to the hands of the receiver in priority to any claims for principal or interest in respect of the debentures.
(3) Payments made under this section shall be recouped, as far as may be, out of the assets of the company available for payment of general creditors.
(1) If a receiver or manager of a company's property;the court may, on application made for the purpose, make an order directing the receiver or manager (as the case may be) to make good the default within such time as may be specified in the order.(a) having made default in filing, delivering or making any return, account or other document , or in giving any notice, which a receiver or manager is by law required to file, deliver, make or give, fails to make good the default within 14 days after the service on him of a notice requiring him to do so, or
(b) having been appointed under powers contained in an instrument, has, after being required at any time by the liquidator of the company to do so, failed to render proper accounts of his receipts and payments and to vouch them and pay over to the liquidator the amount properly payable to him,
(2) In the case of the default mentioned in subsection (1)(a), the application to the court may be made by any member or creditor of the company or by the registrar of companies; and in the case of the default mentioned in subsection (1)(b), the application shall be made by the liquidator. In either case the court's order may provide that all costs of and incidental to the application shall be borne by the receiver or manager, as the case may be.
(3) Nothing in this section prejudices the operation of any enactment imposing penalties on receivers in respect of any such default as is mentioned in subsection (1).
42. General powers Administrative receivers: general
(1) The powers conferred on the administrative receiver of a company by the debentures by virtue of which he was appointed are deemed to include (except in so far as they are inconsistent with any of the provisions of those debentures) the powers specified in Schedule 1 to this Act.43. Power to dispose of charged property, etc.(2) In application of Schedule 1 to the administrative receiver of a company;
(a) the words "he" and "him" refer to the administrative receiver, and
(b) references to the property of the company are to the property of which he is or, but for the appointment of some other person as the receiver of part of the company's property, would be the receiver or manager.
(3) A person dealing with the administrative receiver in good faith and for value is not concerned to inquire whether the receiver is acting within his powers.
(1) Where, on an application by the administrative receiver, the court is satisfied that the disposal (with or without other assets) of any relevant property which is subject to a security would like to promote a more advantageous realisation of the company's assets than would otherwise be effected, the court may by order authorise the administrative receiver to dispose of the property as if it were not subject to the security.44. Agency and liability for contracts(2) Subsection (1) does not apply in the case of any security held by the person by or on whose behalf the administrative receiver was appointed, or of any security so he has priority.
(3) It shall be a condition of an order under this section that;
shall be applied towards discharging the sums secured by the security.(a) the net proceeds of the disposal, and
(b) where those proceeds are less than such amount as may be determined by the court to be the net amount which would be realised on a sale of the property in the open market by a willing vendor, such sums as may be required to make good the deficiency,
(4) Where a condition imposed in pursuance of subsection (3) relates to two or more securities, that condition shall require the net proceeds of the disposal and, where paragraph (b) of that subsection applies, the sums mentioned in that paragraph to be applied towards discharging the sums secured by those securities in the order of their priorities.
(5) An office copy of an order under this section shall, within 14 days of the making of the order, be sent by the administrative receiver to the registrar of companies.
(6) If the administrative receiver without reasonable excuse fails to comply with subsection 95), he is liable to a fine and, for continued contravention, to a daily default fine.
(7) In this section "relevant property", in relation to the administrative receiver, means the property of which he is or, but for the appointment of some other person as the receiver of part of the company's property, would be the receiver or manager.
(1) The administrative receiver of a company;45. Vacation of office(a) is deemed to be the company's agent, unless and until the company goes into liquidation;
(b) is personally liable on any contract entered into by him in the carrying out of his functions (except in so far as the contract otherwise provides) and on any contract of employment adopted by him in the carrying out of those functions; and
(c) is entitled in respect of that liability to an indemnity out of those assets of the company.
(2) For the purposes of subsection (1)(b) the administrative receiver is not to be taken to have adopted a contract of employment by reason of anything done or omitted to be done within 14 days after his appointment.
(2A) For the purposes of subsection (1)(b) a liability under a contract of employment is a qualifying liability if-
(a) it is a liability to pay a sum by way of wages or salary or contribution to an occupational pension scheme,(b) it is incurred while the administrative receiver is in office, and
(c) it is in respect of services rendered wholly or partly after the adoption of the contract.
(2B) Where a sum payable in respect of a liability which is a qualifying liability for the purposes fo subsection (1)(b) is payable in respect of services rendered partly before and partly after the adoption of the contract, liability under subsection (1)(b) shall only extend to so much of the sum as is payable in respect of services rendered after adoption of the contract.
(2C) For the purposes of subsections (2A) and (2B) -
(a) wages or salary payble in respect of a period of holiday or absence from work through sickness or other good cause are deemed to be wages or (as the case may be) salary in respect of services rendered in that period, and(b) a sum payable in lieu of holiday is deemed to be wages or (as the case may be) salary in respect of services rendered in the period by reference to which the holiday entitlement arose.
(2D) In subsection (2C)(a), the reference to wages or salary payable in respect to a period of holiday includes any sums which, if they had been paid, would have been treated for the purposes of the enactments relating to social security as earnings in respect of that period.
(3) This section does not limit any right to indemnity which the administrative receiver would have apart from it, nor limit his liability on contracts entered into or adopted without authority, nor confer any right to indemnity in respect of that liability.
(1) An administrative receiver of a company may at any time be removed from office by order of the court (but not otherwise) and may resign his office by giving notice of his resignation in the prescribed manner to such persons as may be prescribed.(2) An administrative receiver shall vacate office if he ceases to be qualified to act as an insolvency practitioner in relation to the company.
(3) Where at any time an administrative receiver vacates office;
(a) his remuneration and any expenses properly incurred by him, and
(b) any indemnity to which he is entitled out of the assets of the company, shall be charged on and paid out of any property of the company which is in his custody or under his control at that time in priority to any security held by the person by or on whose behalf he was appointed.
(4) Where an administrative receiver vacates office otherwise than by death, he shall, within 14 days after his vacation of office, send a notice to that effect to the registrar of companies.
(5) If an administrative receiver without reasonable excuse fails to comply with subsection (4), he is liable to a fine, and for continued contravention, to a daily default fine.
(Sub-s 5: words in italics repealed by the Companies Act 1989 , ss107, 212 Sch 16, para 3(1),(3),Sch 24, as from day to be appointed.)
46. Information to be given by administrative receiver Administrative receiver: ascertainment and investigation of company's affairs
(1) Where an administrative receiver is appointed, he shall;47. Statement of affairs to be submitted(a) forthwith send to the company and publish in the prescribed manner a notice of his appointment, and
(b) within 28 days after his appointment, unless the court otherwise directs, send such a notice to all creditors of the company (so far as he is aware of their addresses).
(2) This section and the next do not apply in relation of the appointment of an administrative receiver to act;
(a) with an existing administrative receiver, or
(b) in place of an administrative receiver dying or ceasing to act, except that, where they apply to an administrative receiver who dies or ceases to act before they have been fully complied with, the references in this section and the next to the administrative receiver include (subject to the next subsection) his secession and any continuing administrative receiver.
(3) If the company is being wound up, this section and the next apply notwithstanding that the administrative receiver and the liquidator are the same person, but with any necessary modifications arising from that fact.
(4) If the administrative receiver without reasonable excuse fails to comply with this section, he is liable to a fine and for continued contravention, to a daily default fine.
(1) Where an administrative receiver is appointed, he shall forthwith require some or all of the persons mentioned below to make out and submit to him a statement in the prescribed form as to the affairs of the company.48. Report by administrative receiver(2) A statement submitted under this section shall be verified by affidavit by the persons required to submit it and shall show;
(a) particulars of the company's assets, debts and liabilities;
(b) the names and addresses of its creditors;
(c) the securities held by them respectively;
(d) the dates when the securities were respectively given; and
(e) such further or other information as may be prescribed.
(3) The persons referred to in subsection (1) are;
(a) those who are or have been officers of the company;
(b) those who have taken part in the company's formation at any time within one year before the date of the appointment of the administrative receiver;
(c) those who are in the company's employment, or have been in its employment within that year, and are in the administrative receiver's opinion capable of giving the information required;
(d) those who are or have been within that year officers of or in the employment of a company which is, or within that year was, an officer of the company.
In this subsection "employment" includes employment under a contract for services.
(4) Where any persons are required under this section to submit a statement of affairs to the administrative receiver, they shall do so (subject to the next subsection) before the end of the period of 21 days beginning with the day after that on which the prescribed notice of the requirement is given to them by the administrative receiver.
(5) The administrative receiver, if he thinks fit, may;
and where the administrative receiver has refused to exercise a power conferred by this subsection, the court, if it thinks fit, may exercise it.(a) at any time release a person from an obligation imposed on him under subsection (1) or (2), or
(b) either when giving notice under subsection (4) or subsequently, extend the period so mentioned,
(6) If a person without reasonable excuse fails to comply with any obligation imposed under this section, he is liable to a fine and, for continued contravention, to a daily fine.
(1) Where an administrative receiver is appointed, he shall, within 3 months (or such longer period as the court may allow) after his appointment, send to the registrar of companies, to any trustees for secured creditors of the company and (so far as he is aware of their addresses) to all such creditors a report as to the following matters, namely;49. Committee of creditors(a) the events leading up to his appointment, so far as he is aware of them;
(b) the disposal or proposed disposal by him of any property of the company and the carrying on or proposed carrying on by him of any business of the company;
(c) the amounts of principal and interest payable to the debenture holders by whom or on whose behalf he was appointed and the amounts payable to preferential creditors; and
(d) the amount (if any) likely to be available for the payment of other creditors.
(2) The administrative receiver shall also, within 3 months (or such longer period as the court may allow) after his appointment, either;
(a) send a copy of the report (so far as he is aware of their addresses) to all unsecured creditors of the company; or
(b) publish in the prescribed manner a notice stating an address to which unsecured creditors of the company should write for copies of the report to be sent to them free of charge, and (in either case), unless the court otherwise directs, lay a copy of the report before a meeting of the company's unsecured creditors summoned for the purpose on not less than 14 days notice.
(3) The court shall not give a direction under subsection (2) unless;
(a) the report states the intention of the administrative receiver to apply for the direction, and
(b) a copy of the report is sent to the persons mentioned in paragraph (a) of that subsection, or a notice is published as mentioned in paragraph (b) of that subsection, not less than 14 days before the hearing of the application.
(4) Where the company has gone or goes into liquidation, the administrative receiver;
(a) shall, within 7 days after his compliance with subsection (1) or, if later, the nomination or appointment of the liquidator, send a copy of the report to the liquidator, and
(b) where he does so within the time limited for compliance with subsection (2), is not required to comply with that subsection.
(5) A report under this section shall include a summary of the statement of affairs made out and submitted to the administrative receiver under section 47 and of his comments (if any) upon it.
(6) Nothing in this section is to be taken as requiring any such report to include any information the disclosure of which would seriously prejudice the carrying out by the administrative receiver of his functions.
(7) Section 46 (2) applies for the purposes of this section also.
(8) If the administrative receiver without reasonable excuse fails to comply with this section, he is liable to a fine and, for continued contravention, to a daily default fine.
(1) Where a meeting of creditors is summoned under section 48 the meeting may, if it thinks fit, establish a committee ("the creditors' committee") to exercise the functions conferred on it by or under this Act.(2) If such a committee is established, the committee may, on giving not less than 7 days' notice, require the administrative receiver to attend before it at any reasonable time and furnish it with such information relating to the carrying out by him of his functions as it may reasonably require.
50. Extent of this Chapter51. Power to appoint receiverThis Chapter extends to Scotland only.
52. Circumstances justifying appointment(1) It is competent under the law of Scotland for the holder of a floating charge over all or any part of the property (including uncalled capital), which may from time to time be comprised in the property and undertaking of an incorporated company (whether a company within the meeting of the Companies Act or not) which the Court of Session has jurisdiction to wind up, to appoint a receiver of such part of the property of the company as is subject to the charge.
(2) It is competent under the law of Scotland for the court, on the application of the holder of such a floating charge, to appoint a receiver of such part of the property of the company as is subject to the charge.
(3) The following are disqualified from being appointed as receiver -
(a) a body corporate;
(b) an undischarged bankrupt; and
(c) a firm according to the law of Scotland.
(4) A body corporate or a firm according to the law of Scotland which acts as a receiver is liable to a fine.
(5) An undischarged bankrupt who so acts is liable to imprisonment or a fine, or both.
(6) In this section, "receiver" includes joint receivers.
53. Mode of appointment by holder of charge(1) A receiver may be appointed under section 51(1) by the holder of the floating charge on the occurrence of any event which by the provisions of the instrument creating the charge, entitles the holder of the charge to make that appointment and, in so far as not otherwise provided for by the instrument, on the occurrence of any of the following events, namely -
(a) the expiry of a period of 21 days after the making of a demand for payment of the whole or any part of the principal sum secured by the charge, without payment having been made;
(b) the expiry of a period of 2 months during the whole of which interest due and payable under the charge has been in arrears;
the making of an order or the passing of a resolution to wind up the company;
(d) the appointment of a receiver by virtue of any other floating charges created by the company.
(2) A receiver may be appointed by the court under section 51(2) on the occurrence of any event which, by the provisions of the instrument creating the floating charge, entitles the holder of the charge to make that appointment and, in so far as not otherwise provided for by the instrument, on the occurrence of any of the following events, namely -
(a) where the court, on the application of the holder of the charge, pronounces itself satisfied that the position of the holder of the charge is likely to be prejudiced if no such appointment is made;
(b) any of the events referred to in paragraphs (a) to of subsection (1).
54. Appointment by court(1) The appointment of a receiver by the holder of the floating charge under section 51(1) shall be by means of an instrument subscribed in accordance of the Requirements of Writing (Scotland) Act 1995 ("the instrument of appointment"), a copy (certified in the prescribed manner to be a correct copy) whereof shall be delivered by or on behalf of the person making the appointment to the registrar of companies for registration within 7 days of its execution and shall be accompanied by a notice in the prescribed form.
(2) If any person without reasonable excuse makes default in complying with the requirements of subsection (1), he is liable to a fine and, for continued contravention, to a daily default fine.
(Sub-s 5: words in italics repealed by the Companies Act 1989 , ss107, 212 Sch 16, para 3(1),(3),Sch 24, as from day to be appointed.)
(3) ...
(Sub-s (3): repealed by the Law Reform (Miscellaneous Provisions) (Scotland) Act 1990, s74, Sch 8, Pt II, para 35, Sch 9, as from 1 December 1990.)
(4) If the receiver is to be appointed appointed by the holders of a series of secured debentures, the instrument of appointement may be executed on behalf of the holders of the floating charge by any person authorised by resolution of the debenture-holders to execute the instrument.
(Sub-s (4): substituted by the Requirements of Writing (Scotland) Act 1995, s 14(1), Sch4, para 58(b), as from 1 August 1995.)
(a) by any person duly authorised in writing by the holder to execute the instrument, and
(b) in the case of an appointment of a receiver by the holders of a series of secured debentures, by any person authorised by resolution of the debenture holders to execute the instrument.
(5) On receipt of the certified copy of the instrument of appointment in accordance with subsection (1), the registrar shall, on payment of the prescribed fee, enter the particulars of the appointment in the register of charges.
(6) The appointment of a person as a receiver by an instrument of appointment in accordance with subsection (1) -
(a) is of no effect unless it is accepted by that person before the end of the business day next following that on which the instrument of appointment is received by him or on his behalf, and
(b) subject to paragraph (a), is deemed to be made on the day on and at the time at which the instrument of appointment is so received, as evidenced by a written docquet by that person or on his behalf;
and this subsection applies to the appointment of joint receivers subject to such modifications as may be prescribed.
(7) On the appointment of a receiver under this section, the floating charge by virtue of which he was appointed attaches to the property then subject to the charge; and such attachment has effect as if the charge was a fixed security over the property to which it has attached.
55. Powers of receiver(1) Application for the appointment of a receiver by the court under section 51(2) shall be by petition to the court, which shall be served on the company.
(2) On such an application, the court shall, of it thinks fit, issue an interlocutor making the appointment of the receiver.
(3) A copy (certified by the clerk of the court to be a correct copy) of the court's interlocutor making the appointment shall be delivered by or on behalf of the petitioner to the registrar of companies for registration, accompanied by a notice in the prescribed form, within 7 days of the date of the interlocutor or such longer period as the court may allow.
If any person without reasonable excuse makes default in complying with the requirements of this subsection, he is liable to a fine and, for continued contravention, to a daily default fine.
(4) On receipt of the certified copy interlocutor in accordance with subsection (3), the registrar shall, on payment of the prescribed fee, enter the particulars of the appointment in the register of charges.
(5) The receiver is to be regarded as having been appointed on the date of his being appointed by the court.
(6) On the appointment of a receiver under this section, the floating charge by virtue of which he was appointed attaches to the property then subject to the charge; and such attachment has effect as if the charge were a fixed security over the property to which it has attached.
(7) In making rules of court for the purposes of this section, the Court of Session shall have regard to the need for special provision for cases which appear to the court to require to be dealt with as a matter of urgency.
56. Precedence among receivers(1) Subject to the next subsection, a receiver has in relation to such part of the property of the company as is attached by the floating charge by virtue of which he was appointed, the powers, if any, given to him by the instrument creating that charge.
(2) In addition, the receiver has under this Chapter the powers as respects that property (in so far as these are not inconsistent with any provision contained in that instrument) which are specified in Schedule 2 to this Act.
(3) Subsections (1) and (2) apply -
(a) subject to the rights of any person who has effectually executed diligence on all or part of the property of the company prior to the appointment of the receiver, and
(b) subject to the rights of any person who holds over all or any part of the property of the company a fixed security or floating charge having priority over, or ranking pari passu with, the floating charge by virtue of which the receiver was appointed.
(4) A person dealing with a receiver in good faith and for value is not concerned to enquire whether the receiver is acting within his powers.
57. Agency and liability of receiver for contracts(1) Where there are two or more floating charges subsisting over all or any part of the property of the company, a receiver may be appointed under this Chapter by virtue of each such charge; but a receiver appointed by, or on the application of, the holder of a floating charge having priority of ranking over any other floating charge by virtue of which a receiver has been appointed has the powers given to a receiver by section 55 and Schedule 2 to the exclusion of any other receiver.
(2) Where two or more floating charges rank with one another equally, and two or more receivers have been appointed by virtue of such charges, the receivers so appointed are deemed to have been appointed as joint receivers.
(3) Receivers appointed, or deemed to have been appointed, as joint receivers shall act jointly unless the instrument of appointment or respective instruments of appointment otherwise provide.
(4) Subject to subsection (5) below, the powers of a receiver appointed by, or on the application of, the holder of a floating charge are suspended by, and as from the date of, the appointment of a receiver by, or on the application of, the holder of a floating charge having priority of ranking over that charge to such extent as may be necessary enable the receiver second mentioned to exercise his powers under section 55 and Schedule 2; and any powers so suspended take effect again when the floating charge having priority of ranking ceases to attach to the property then subject to the charge, whether such cessation is by virtue of section 62(6) or otherwise.
(5) The suspension of the powers of a receiver under subsection (4) does not have the effect of requiring him to release any part of the property (including any letters or documents) of the company from his control until he receives from the receiver superseding him a valid indemnity (subject to the limit of the value of such part of the property of the company as is subject to the charge by virtue of which he was appointed) in respect of any expenses, charges, and liabilities he may have incurred in the performance of his functions as receiver.
(6) The suspension of the powers of a receiver under subsection (4) does not cause the floating charge by virtue of which he was appointed to cease to attach to the property to which it attached by virtue of section 53(7) or 54(6).
(7) Nothing in this section prevents the same receiver being appointed by virtue of two or more floating charges.
58. Remuneration of receiver(1) A receiver is deemed to be the agent of the company in relation to such property of the company as is attached by the floating charge by virtue of which he was appointed.
(1A) Without prejudice to subsection (1), a receiver is deemed to be the agent of the company in relation to any contract of employment adopted by him in the carrying out of his functions.
(2) A receiver (including a receiver whose powers are subsequently suspended under section 56) is personally liable on any contract entered into by him in the performance of his functions, except in so far as the contract otherwise provides, and, to the extent of any qualifying liability on any contract of employment adopted by him in the carrying out of those functions.
(2A) For the purposes of subsection (2) a liability under a contract of employment is a qualifying liability if-
(a) it is a liability to pay a sum by way of wages or salary or contribution to an occupational pension scheme,
(b) it is incurred while the receiver is in office, and
(c) it is in respect of services rendered wholly or partly after the adoption of the contract.
(2B) Where a sum payable in respect of a liability which is a qualifying liability for the purposes of subsection (2) is payable in respect of services rendered partly before and partly after the adoption of the contract, liability under that subsection shall only extend to so much of the sum as is payable in respect of services rendered after the adoption of the contract.
(2C) For the purposes of subsections (2A) and (2B)-
(a) wages or salary payable in respect of a period of holiday or absence from work through sickness or other good cause are deemed to be wages or (as the case may be) salary in respect of services rendered in that period, and
(b) a sum payable in lieu of holiday is deemed to be wages or (as the case may be) salary in respect of services rendered in the period by reference to which the holiday entitlement arose.
(2D) In subsection (2C)(a), the reference to wages or salary payable in respect of a period of holiday includes any sums which, if they had been paid, would have been treated for the purposes of the enactments relating to social security as earnings in respect of that period.
(3) A receiver who is personally liable by virtue of subsection (2) is entitled to be indemnified out of the property in respect of which he was appointed.
(4) Any contract entered into by or on behalf of the company prior to the appointment of a receiver continues in force (subject to its terms) notwithstanding that appointment, but the receiver does not by virtue only of his appointment incur any personal liability on any such contract.
(5) For the purposes of subsection (2), a receiver is not to be taken to have adopted a contract of employment by reason of anything done or omitted to be done within 14 days after his appointment.
(6) This section does not limit any right to indemnity which the receiver would have apart from it, nor limit his liability on contracts entered into or adopted without authority, nor confer any rights to indemnity in respect of that liability.
(7) Any contract entered into by a receiver in the performance of his functions continues in force (subject to its terms) although the powers of the receiver are subsequently suspended under section 56.
59. Priority of debts(1) The remuneration to be paid to a receiver is to be determined by agreement between the receiver and the holder of the floating charge by virtue of which he was appointed.
(2) Where the remuneration to be paid to the receiver has not been determined under subsection (1), or where it has been so determined but is disputed by any of the persons mentioned in paragraphs (a) to (d) below, it may be fixed instead by the Auditor of the Court of Session on application made to him by -
(a) the receiver;
(b) the holder of any floating charge or fixed security over all or any part of the property of the company;
(c) the company; or
(d) the liquidator of the company.
(3) Where the receiver has been paid retained for his remuneration for any period before the remuneration has been fixed by the Auditor of the Court of Session under subsection (2) any amount in excess of the remuneration so fixed for that period, the receiver or his personal representatives shall account for the excess.
60. Distribution of moneys(1) Where a receiver is appointed and the company is not at the time of the appointment in course of being wound up, the debts which fall under subsection (2) of this section shall be paid out of any assets coming to the hands of the receiver in priority to any claim for principal or interest by the holder of the floating charge by virtue of which the receiver was appointed.
(2) Debts falling under this section are preferential debts (within the meaning given by section 386 Part XII) which, by the end of a period of 6 months after advertisement by the receiver for claims in the Edinburgh Gazette and in a newspaper circulating in the district where the company carries on business either -
(i) have been intimated to him, or
(ii) have become known to him.
(3) Any persons made under this section shall be recouped as far as may be out of the assets of the company available for payment of ordinary creditors.
(1) Subject to the next subsection, and to the rights of any of the following categories of persons (which rights shall, except to the extent otherwise provided in any instrument, have the following order of priority), namely -
(a) the holder of any fixed security which is over property subject to the floating charge and which ranks prior to, or pari passu with, the floating charge;
(b) all persons who have effectually executed diligence on any part of the property of the company which is subject to the charge by virtue of which the receiver was appointed;
creditors in respect of all liabilities, charges and expenses incurred by him on behalf of the receiver;
(d) the receiver in respect of his liabilities, expenses and remuneration, and any indemnity to which he is entitled out of the property of the company; and
(e) the preferential creditors entitled to payment under section 59,
the receiver shall pay moneys received by him to the holder of the floating charge by virtue of which the receiver was appointed in or towards satisfaction of the debt secured by the floating charge.
(2) Any balance of moneys remaining after the provisions of sub- section (1) and section 61 below have been satisfied shall be paid in accordance with their respective rights and interests to the following persons, as the case may require -
(a) any other receiver;
(b) the holder of a fixed security which is over property subject to the floating charge;
(c) the company or its liquidator, as the case may be.
(3) Where any question arises as to the person entitled to a payment under this section, or where a receipt or a discharge of a security cannot be obtained in respect of any such payment, the receiver shall consign the amount of such payment in any joint stock bank of issue in Scotland in name of the Accountant of Court for behoof of the person or persons entitled thereto.
61. Disposal of interest in property62. Cessation of appointment of receiver(1) Where the receiver sells or disposes, or is desirous of selling or disposing, of any property or interest in property of the company which is subject to the floating charge by virtue of which the receiver was appointed and which is -
(a) subject to any security or interest of, or burden or encumbrance in favour of, a creditor the ranking of which is prior to, or pari passu with, or postponed to the floating charge, or
(b) property or an interest in property affected or attached by effectual diligence executed by any person,
and the receiver is unable to obtain the consent of such creditor or, as the case may be, such person to such a sale or disposal, the receiver may apply to the court for authority to sell or dispose of the property or interest in property free of such security, interest, burden, encumbrance or diligence.
(2) Subject to the next subsection on such an application the court may, if it thinks fit, authorise the sale or disposal of the property or interest in question free of such security, interest, burden, encumbrance or diligence, and such authorisation may be on such terms or conditions as the court thinks fit.
(3) In the case of an application where a fixed security over the property or interest in question which ranks prior to the floating charge has not been met or provided for in full, the court shall not authorise the sale or disposal of the property or interest in question unless it is satisfied that the sale or disposal would be likely to provide a more advantageous realisation of the company's assets than would otherwise be effected.
(4) It shall be a condition of an authorisation to which subsection (3) applies that -
(a) the net proceeds of the disposal, and
(b) where those proceeds are less than such amount as may be determined by the court to be the net amount which would be realised on a sale of the property or interest in the open market by a willing seller, such sums as may be required to make good the deficiency,
shall be applied towards discharging the sums secured by the fixed security.
(5) Where a condition imposed in pursuance of subsection (4) relates to two be more such fixed securities, that condition shall require the net proceeds of the disposal and, where paragraph (b) of that subsection applies, the sums mentioned in that paragraph to be applied towards discharging the sums secured by those fixed securities in the order of their priorities.
(6) A copy of an authorisation under subsection (2) certified by the clerk of court shall, within 14 days of the granting of the authorisation, be sent by the receiver to the registrar of companies.
(7) If the receiver without reasonable excuse fails to comply with subsection (6), he is liable to a fine and, for continued contravention, to a daily default fine.
(8) Where any sale or disposal is effected in accordance with the authorisation of the court under subsection (2), the receiver shall grant to the purchaser or disponee an appropriate document of transfer or conveyance of the property or interest in question, and that document has the effect, or, where recording, intimation or registration of that document is a legal requirement for completion of title to the property or interest, then that recording, intimation or registration (as the case may be) has the effect, of -
(a) disencumbering the property or interest of the security, interest, burden or encumbrance affecting it, and
(b) freeing the property of interest from the diligence executed upon it.
(9) Nothing in this section prejudices the right of any creditor of the company to rank for his debt in the winding up of the company.
63. Powers of court(1) A receiver may be removed from office by the court under sub- section (3) below and may resign his office by giving notice of his resignation in the prescribed manner to such persons as may be prescribed.
(2) A receiver shall vacate office if he ceases to be qualified to act as an insolvency practitioner in relation to the company.
(3) Subject to the next subsection, a receiver may, on application to the court by the holder of the floating charge by virtue of which he was appointed, be removed by the court on cause shown.
(4) Where at any time a receiver vacates office -
(a) his remuneration and any expenses properly incurred by him, and
(b) any indemnity to which he is entitled out of the property of the company,
shall be paid out of the property of the company which is subject to the floating charge and shall have priority as provided for in section 60(1).
(5) When a receiver ceases to act as such otherwise than by death he shall, and, when a receiver is removed by the court, the holder of the floating charge by virtue of which he was appointed shall, within 14 days of the cessation or removal (as the case may be) give the registrar of companies notice to that effect, and the registrar shall enter the notice in the registrar of charges.
If the receiver or the holder of the floating charge (as the case may require) makes default in complying with the requirements of this subsection, he is liable to a fine.
(6) If by the expiry of a period of one month following upon the removal of the receiver or his ceasing to act as such no other receiver has been appointed, the floating charge by virtue of which the receiver was appointed -
(a) thereupon cease to attach to the property then subject to the charge, and
(b) again subsists as a floating charge;
and for the purposes of calculating the period of one month under this subsection no account shall be taken of any period during which an administration order under Part II of this Act is in force.
64. Notification that receiver appointed(1) The court on the application of -
(a) the holder of a floating charge by virtue of which a receiver was appointed, or
(b) a receiver appointed under section 51,
may give directions to the receiver in respect of any matter arising in connection with the performance by him of his functions.
(2) Where the appointment of a person as a receiver by the holder of a floating charge is discovered to be invalid (whether by virtue of the invalidity of the instrument or otherwise), the court may order the holder of the floating charge to indemnify the person appointed against any liability which arises solely by reason of the invalidity of the appointment.
(1) Where a receiver has been appointed, every invoice, order for goods or business letter issued by or on behalf of the company or the receiver or the liquidator of the company, being a document on or in which the name of the company appears, shall contain a statement that a receiver has been appointed.
(2) If default is made in complying with the requirements of this section, the company and any of the following persons who knowingly and willfully authorises or permit the default, namely any officer of the company, any liquidator of the company and any receiver, is liable to a fine.
65. Information to be given by receiver66. Company's statement of affairs(1) Where a receiver is appointed, he shall -
(a) forthwith send to the company and publish notice of his appointment, and
(b) within 28 days after his appointment, unless the court otherwise directs, send such notice to all the creditors of the company (so far as he is aware of their addresses).
(2) This section and the next do not apply in relation to the appointment of a receiver to act -
except that, where they apply to a receiver who dies or ceases to act before they have been fully complied with, the references in this section and the next to the receiver include (subject to subsection (3) of this section) his successor and any continuing receiver.(a) with an existing receiver, or
(b) in place of a receiver who has died or ceased to act,
(3) If the company is being wound up, this section and the next apply notwithstanding that the receiver and the liquidator are the same person, but with any necessary modifications arising from that fact.
(4) If a person without reasonable excuse fails to comply with this section, he is liable to a fine and, for continued contravention, to a daily default fine.
67. Report by receiver(1) Where a receiver of a company is appointed, the receiver shall forthwith require some or all of the persons mentioned in subsection (3) below to make out and submit to him a statement in the prescribed form as to the affairs of the company.
(2) A statement submitted under this section shall be verified by affidavit by the persons required to submit it and shall show -
(a) particulars of the company's assets, debts and liabilities;
(b) the names and addresses of its creditors;
(c) the securities held by them respectively;
(d) the date when the securities were respectively given; and
(e) such further or other information as may be prescribed.
(3) The persons referred to in subsection (1) are -
(a) those who are or have been officers of the company;
(b) those who have taken part in the company's formation at any time within one year before the date of the appointment of the receiver;
(c) those who are in the company's employment or have been in its employment within that year, and are in the receiver's opinion capable of giving the information required;
(d) those who are or have been within that year officers of or in the employment of a company which is, or within that year was, an officer of the company.
In this subsection "employment" includes employment under a contract for services.
(4) Where any persons are required under this section to submit a statement of affairs to the receiver they shall do so (subject to the next subsection) before the end of the period of 21 days beginning with the day after that on which the prescribed notice of the requirement is given to them by the receiver.
(5) The receiver, if he thinks fit, may -
(a) at any time release a person from an obligation imposed on him under subsection (1) or (2), or
(b) either when giving the notice mentioned in subsection (4) or subsequently extend the period so mentioned,
and where the receiver has refused to exercise a power conferred by this subsection, the court, if it thinks fit, may exercise it.
(6) If a person without reasonable excuse fails to comply with any obligation imposed under this section, he is liable to a fine and, for continued contravention to a daily default fine.
68. Committee of creditors(1) Where the receiver is appointed under section 51, he shall within 3 months (or such longer period as the court may allow) after his appointment, send to the registrar of companies, to the holder of the floating charge by virtue of which he was appointed and to any trustees for secured creditors of the company and (so far as he is aware of their addresses) to all such creditors a report as to the following matters, namely -
(a) the events leading up to his appointment, so far as he is aware of them;
(b) the disposal or proposed disposal by him of any property of the company and the carrying on or proposed carrying on by him of any business of the company;
(c) The amounts of principal and interest payable to the holder of the floating charge by virtue of which he was appointed and the amounts payable to preferential creditors; and
(d) the amount (if any) likely to be available for the payment of other creditors.
(2) The receiver shall also, within 3 months (or such longer period as the court may allow) after his appointment, either -
(a) send a copy of the report (so far as he is aware of their addresses) to all unsecured creditors of the company, or
(b) publish in the prescribed manner a notice stating an address to which unsecured creditors of the company should write for copies of the report to be sent to them free of charge,
(c) and (in either case), unless the court otherwise directs, lay a copy of the report before a meeting of the company's unsecured creditors summoned for the purpose on not less than 14 days' notice.
(3) The court shall not give a direction under subsection (2) unless -
(a) the report states the intention of the receiver to apply for the direction, and
(b) a copy of the report is sent to the persons mentioned in paragraph (a) of that subsection, or a notice is published as mentioned in paragraph (b) of that subsection, not less than 14 days before the hearing of the application.
(4) Where the company has gone or goes into liquidation, the receiver -
(a) shall, within 7 days after his compliance with subsection (1) or, if later, the nomination or appointment of the liquidator, send a copy of the report to the liquidator, and
(b) Where he does so within the time limited for compliance with subsection (2), is not required to comply with that subsection.
(5) A report under this section shall include a summary of the statement of affairs made out and submitted under section 66 and of his comments (if any) on it.
(6) Nothing in this section shall be taken as requiring any such report to include any information the disclosure of which would seriously prejudice the carrying out by the receiver of his functions.
(7) Section 65(2) applies for the purposes of this section also.
(8) If a person without reasonable excuse fails to comply with this section, he is liable to a fine and, for continued contravention, to a daily default fine.
(9) In this section "secured creditor", in relation to a company, means a creditor of the company who holds in respect of his debt a security over property of the company, and "unsecured creditor" shall be construed accordingly.
69. Enforcement of receiver's duty to make returns, etc(1) Where a meeting of creditors is summoned under section 67, the meeting may, if it thinks fit, establish a committee ("the creditors' committee") to exercise the functions conferred on it by or under this Act.
(2) If such a committee is established, the committee may on giving not less than 7 days' notice require the receiver to attend before it at any reasonable time and furnish it with such information relating to the carrying out by him of his functions as it may reasonably require.
70. Interpretation for Chapter II(1) If any receiver -
(a) having made default in filing, delivering or making any return, account or other document, or in giving any notice, which a receiver is by law required to file, deliver, make or give, fails to make good the default within 14 days after the service on him of a notice requiring him to do so; or
(b) has, after being required at any time by the liquidator of the company so to do, failed to render proper accounts for his receipts and payments and to vouch the same and to pay over to the liquidator the amount properly payable to him,
the court may, on an application made for the purpose, make an order directing the receiver to make good the default within such time as may be specified in the order.
(2) In the case of any such default as is mentioned is subsection (1)(a), an application for the purposes of this section may be made by any member or creditor of the company or by the registrar of companies; and, in the case of any such default as is mentioned in subsection (1)(b), the application shall be made by the liquidator; and in either case, the order may provide that all expenses of and incidental to the application shall be borne by the receiver.
(3) Nothing in this section prejudices the operation of any enactments imposing penalties on receivers in respect of any such default as is mentioned in subsection (1).
71. Prescription of forms, etc.; regulations(1) In this Chapter, unless the contrary intention appears, the following expressions have the following meanings respectively assigned to them -
"company" means an incorporated company (whether or not a company within the meaning of the Companies Act) which the Court of Session has jurisdiction to wind up;
"fixed security", in relation to any property of a company, means any security, other than a floating charge or a charge having the nature of a floating charge, which on the winding up of the company in Scotland would be treated as an effective security over that property, and (without prejudice to that generality) includes a security over that property, being a heritable security within the meaning of the conveyancing and Feudal Reform (Scotland) Act 1970;
"instrument of appointment" has the meaning given by section 53(1);
"prescribed" means prescribed by regulations made under this Chapter by the Secretary of State;
"receiver" means a receiver of such part of the property of the company as is subject to the floating charge by virtue of which he has been appointed under section 51;
"register of charges" means the register kept by the registrar of companies for the purposes of Chapter II of Part XII of the Companies Act;
"secured debenture" means a bond, debenture, debenture stock or other security which, either itself or by reference to any other instrument, creates a floating charge over all or any part of the property of the company, but does not include a security which creates no charge other than a fixed security; and
"series of secured debentures" means two or more secured debentures created as a series by the company in such a manner that the holders thereof are entitled pari passu to the benefit of the floating charge.
(2) Where a floating charge, secured debenture or series of secured debentures has been created by the company, then, except where the context otherwise requires, any reference in this Chapter to the holder of the floating charge shall -
(a) where the floating charge, secured debenture or series of secured debentures provides for a receiver to be appointed by any person or body, be construed as a reference to that person or body;
(b) where, in the case of a series of secured debentures, no such provision has been made therein but -
(i) there are trustees acting for the debenture-holders under and in accordance with a trust deed, be construed as a reference to those trustees, and
(ii) where no such trustees are acting, be construed as a reference to -
(aa) a majority in nominal value of those present or represented by a proxy and voting at a meeting of debenture-holders at which the holders of at least one-third in nominal value of the outstanding debentures of the series are present or so represented, or
(bb) where no such meeting is held, the holders of at least one-half in nominal value of the outstanding debentures of the series.
(3) Any reference in this Chapter to a floating charge, secured debenture, series of secured debentures or instrument creating a charge includes, except where the context otherwise requires, a reference to that floating charge, debenture, series of debentures or instrument as varied by any instrument.
(4) References in this Chapter to the instrument by which a floating charge was created are, in the case of a floating charge created by words in bond or other written acknowledgement, references to the bond or, as the case may be, the other written acknowledgement.
(1) The notice referred to in section 62(5), and the notice referred to in section 65(1)(a) shall be in such form as may be prescribed.
(2) Any power conferred by this Chapter on the Secretary of State to make regulations is exercisable by statutory instrument; and a statutory instrument made in the exercise of the power so conferred to prescribe a fee is subject to annulment in pursuance of a resolution of either House of Parliament.
72. Cross-border operation of receivership provisions(1) A receiver appointed under the law of either part of Great Britain in respect of the whole or any part of any property or undertaking of a company and in consequence of the company having created a charge which, as created, was a floating charge may exercise his powers in the other part of Great Britain so far as their exercise is not inconsistent with the law applicable there.
(2) In subsection (1) "receiver" includes a manager and a person who is appointed both receiver and manager.
73. Alternative modes of winding up Modes for Winding Up
(1) The winding up of a company, within the meaning given to that expression by section 735 of the Companies Act, may be either voluntary (Chapters II, IV and V in this Part), or by the court (Chapter VI).(2) This Chapter, and Chapters VII to X, relate to winding up generally, except where otherwise stated.
74. Liability as contributories of past and present members Contributories
(1) When a company is wound up, every present and past member is liable to contribute to its assets to any amount sufficient for payment of its debts and liabilities, and the expenses of the winding up, and for the adjustment of the rights of the contributories among themselves.75. Directors, etc with unlimited liability(2) This is subject to as follows:
(a) a past member is not liable to contribute if he has ceased to be a member for one year or more before the commencement of the winding up;
(b) a past member is not liable to contribute in respect of any debt or liability of the company contracted after he ceased to be a member;
(c) a past member is not liable to contribute, unless it appears to the court that the existing members are unable to satisfy the contributions required to be made by them in pursuance of the Companies Act and this Act;
(d) in the case of a company limited by shares, no contribution is required from any member exceeding the amount (if any) unpaid on the shares in respect of which he is liable as a present or past member;
(e) nothing in the Companies Act or this Act invalidates any provision contained in a policy of insurance or other contract whereby the liability of individual members on the policy or contract is restricted, or whereby the funds of the company are alone made liable in respect of the policy or contract;
(f) a sum due to any member of the company (in his character of a member) by way of dividends, profits or otherwise is not deemed to be a debt of the company, payable to that member in a case of competition between himself and any other creditor not a member of the company, but any such sum may be taken into account for the purpose of the final adjustment of the rights of the contributories among themselves.
(3) In the case of a company limited by guarantee, no contribution is required from any member exceeding the amount undertaken to be contributed by him to the company's assets in the event of its being wound up; but if it is a company with a share capital, every member of it is liable (in addition to the amount so undertaken to be contributed to the assets), to contribute to the extent of any sums unpaid on shares held by him.
(1) In the winding up of a limited company, any director or manager (whether past or present) whose liability is under the Companies Act unlimited is liable, in addition to his liability (if any) to contribute as an ordinary member, to make a further contribution as if he were at the commencement of the winding up a member of an unlimited company.76. Liability of past directors and shareholders(2) However -
(a) a past director or manager is not liable to make such further contribution if he has ceased to hold office for a year or more before the commencement of the winding up;
(b) a past director or manager is not liable to make such further contribution in respect of any debt or liability of the company contracted after he ceased to hold office;
(c) subject to the company's articles, a director or manager is not liable to make such further contribution unless the court deems it necessary to require that contribution in order to satisfy the company's debts and liabilities, and the expenses of the winding up.
(1) This section applies where a company is being wound up and -77. Limited company formerly unlimited(a) it has under Chapter VII of Part V of the Companies Act (redeemable shares; purchase by a company of its own shares) made a payment out of capital in respect of the redeption or purchase of any of its own shares (the payment being referred to below as "the relevant payment"), and
(b) the aggregate amount of the company's assets and the amounts paid by way of contribution to its assets (apart from this section) is not sufficient for payment of its debts and liabilities, and the expenses of the winding up.
(2) If the winding up commenced within one year of the date on which the relevant payment was made, then -
(a) the person from whom the shares were redeemed or purchased, and
(b) the directors who signed the statutory declaration made in accordance with section 173(3) of the Companies Act for the purposes of the redemption or purchase (except a director who shows that he had reasonable grounds for forming the opinion set out in the declaration),
are, so to enable that insufficiency to be met, liable to contribute to the following extent to the company's assets.
(3) A person from whom any of the shares were redeemed or purchased is liable to contribute an amount not exceeding so much of the relevant payment as was made by the company in respect of his shares; and the directors are jointly and severally liable with that person to contribute that amount.
(4) A person who has contributed any amount to the assets in pursuance of this section may apply to the court for an order directing any other person jointly and severally liable in respect of that amount to pay him such amount as the court thinks just and equitable.
(5) Sections 74 and 75 do not apply in relation to liability accruing by virtue of this section.
(6) This section is deemed included in Chapter VII of Part V of the Companies Act for the purposes of the Secretary of State's power to make regulations under section 179 of the Act.
(1) This section applies in the case of a company being wound up which was at some former time registered as unlimited but has re-registered -78. Unlimited company formerly limited(a) as a public company under section 43 of the Companies Act (or for the former corresponding provision, section 5 of the Companies Act 1980), or
(b) as a limited company under section 51 of the Companies Act (or the former corresponding provision, section 44 of the Companies Act 1967).
(2) Notwithstanding section 74(2)(a) above, a past member of the company who was a member of it at the time of re-registration, if the winding up commences within the period of 3 years beginning with the day on which the company re-registered, is liable to contribute to the assets of the company in respect of debts and liabilities contracted before that time.
(3) If no persons who were members of the company at that time are existing members of it, a person who at that time was a present or past member is liable to contribute as above notwithstanding that the existing members have satisfied the contributions required to be made by them under the Companies Act and this Act.
This applies subject to section 74(2)(a) above and to subsection (2) of this section, but notwithstanding section 74(2)(c).
(4) Notwithstanding section 74(2)(d) and (3), there is no limit of the amount which a person who, at that time, was a past or present member of the company is liable to contribute as above.
(1) This section applies in the case of a company being wound up which was at some former time registered as limited but has not been re-registered as unlimited under section 49 of the Companies Act (or the former corresponding provision, section 43 of the Companies Act 1967).79. Meaning of "contributory"(2) A person who, at the time when the application for the company to be re-registered was lodged, was a past member of the company and did not after that again become a member of it is not liable to contribute to the assets of the company more than he would have been liable to contribute had the company not been re-registered.
(1) In this Act and the Companies Act the expression "contributory" means every person liable to contribute to the assets of the company in the event of its being wound up, and for the purposes of all proceedings for determining, and all proceedings prior to the final determination of, the persons who are to de deemed contributories, includes any person alleged to be a contributory.80. Nature of contributory's liability(2) The references in subsection (1) to persons liable to contribute to the assets does not include a person so liable by virtue of a declaration by the court under section 213 (imputed responsibility for company's fraudulent trading) or section 214 (wrongful trading) in Chapter X of this Part.
(3) A reference in a company's articles to a contributory does not (unless the context requires) include a person who is a contributory only by virtue of section 76.
This subsection is deemed included in Chapter VII Part V of the Companies Act for the purposes of the Secretary of State's power to make regulations under section 179 of that Act.
The liability of a contributory creates a debt (in England and Wales in the nature of a speciality) accruing due from him at the time when his liability commenced, but payable at the times when calls are made for enforcing the liability.81. Contributories in case death of a member(1) If a contributory dies either before or after he has been placed on the list of contributories, his personal representatives, and their heirs and legatees of heritage of his heritable estate in Scotland, are liable in due course of administration to contribute to the assets of the company in discharge of his liability and are contributories accordingly.82. Effect of contributory's bankruptcy(2) Where the personal representatives are placed on the list of contributories, the heirs or legatees of heritage need not be added, but they may be added as and when the court thinks fit.
(3) If in England and Wales the personal representatives make default in paying any money ordered to be paid by them, proceedings may be taken for administering the estate of the deceased contributory and for compelling payment out of it of the money due.
(1) The following applies if a contributory becomes bankrupt, either before of after he has been placed on the list of contributories.83. Companies registered under Companies Act(2) His trustee in bankruptcy represents him for all purposes of the winding up, and is a contributory accordingly.
(3) The trustee may be called on to admit to proof against the bankrupt's estate, or otherwise allow to be paid out of the bankrupt's assets in due course of law, any money due from the bankrupt in respect of his liability to contribute to the company's assets.
(4) There may be proved against the bankrupt's estate the estimated value of his liability to future calls as well as calls already made.
(1) The following applies in the event of a company being wound up which has been registered under section 680 of the Companies Act (or previous corresponding provisions in the Companies Act 1948 or earlier Acts).(2) Every person is a contributory, in respect of the company's debts and liabilities contracted before registration, who is liable -
(a) to pay, or contribute to the payment of, any debt of liability so contracted, or
(b) to pay, or contribute to the payment of, any sum for the adjustment of the rights of the members among themselves in respect of any such debt or liability, or
(c) to pay, or contribute to the amount of, the expenses of winding up the company, so far as relates to the debts or liabilities above mentioned.
(3) Every contributory is liable to contribute to the assets of the company, in the course of the winding up, all sums due from him in respect of any such liability.
(4) In the event of the death, bankruptcy or insolvency of any contributory, provisions of this Act, with respect to the personal representatives, to the heirs and legatees of heritage of the heritable estate in Scotland of deceased contributories and to the trustees of bankrupt or insolvent contributories respective, apply.
Resolutions for, and commencement of, voluntary winding up
84. Circumstances in which company may be wound up voluntarily
85. Notice of resolution to wind up(1) A company may be wound up voluntarily-
(a) when the period (if any) fixed for the duration of the company by the articles expires, or the event (if any) occurs, on the occurrence of which the articles provide that the company is to be dissolved, and the company in general meeting has passed a resolution requiring it to be wound up voluntarily;
(b) if the company resolves by special resolution that it be wound up voluntarily;
(c) if the company resolves by extraordinary resolution to the effect that it cannot by reason of its liabilities continue its business, and that it is advisable to wind up.
(2) In this Act the expression "a resolution for voluntary winding up" means a resolution passed under of the paragraphs of subsection (1).
(3) A resolution passed under paragraph (a) of subsection (1), as well as a special resolution under paragraph (b) and an extraordinary resolution under paragraph (c), is subject to section 380 of the Companies Act (copy of resolution to be forwarded to registrar of companies within 15 day).
(1) When a company has passed a resolution for voluntary winding up, it shall, within 14 days after the passing of the resolution, give notice of the resolution by advertisement in the Gazette.
(2) If the default is made in complying with this section, the company and every offices of it who is in default is liable to a fine and, for continues contravention, to a daily default fine.
For the purposes of this subsection the liquidator is deemed an offices of the company.
86. Commencement of winding up
A voluntary winding up is deemed to commence at the time of the passing of the resolution for voluntary winding up.87. Effect on business and status of company Consequences of resolution to wind up
88. Avoidance of share tranfers, etc. after winding-up resolution(1) In case of a voluntary winding up, the company shall from the commencement of the winding up cease to carry on its business, except so far as may be required for its beneficial winding up.
(2) However, the corporate state and corporate powers of the company, notwithstanding anything to the contrary in its articles, continue until the company is dissolved.
Any transfer of shares, not being a transfer made to or with the sanction of the liquidator, and any alteration in the status of the company's members, made after the commencement of a voluntary winding up, is void.Declaration of solvency 89. Statutory declaration of solvency
90. Distinction between "members"and "creditors" voluntary winding up(1) Where it is proposed to wind up a company voluntarily, the directors (or, in the case of a company having more than two directors, the majority of them) may at a directors' meeting make a statutory declaration to the effect that they have made a full inquiry into the company's affairs and that having done so, they have formed the opinion that the company will be able to pay its debts in full, together with interest at the official rate (as defined in section 251), within such period not exceeding 12 months from the commencement of the winding up, as may be specified in the declaration.
(2) Such a declaration by the directors has no effect for purposes of this Act unless-
(a) it is made within the 5 weeks immediately preceding the date of the passing of the resolution for winding up, or on that date but before the passing of the resolution, and,
(b) it embodies a statement of the company's assets and liabilities as at the latest practicable date before the making of the declaration.
(3) The declaration shall be delivered to the registrar of companies before the expiration of 15 days immediately following the date on which the resolution for winding up is passed.
(4) A director making a declaration under this section without having reasonable grounds for the opinion that the company will be able to pay its debts in full, together with the interest at the official rate, within the period specified is liable to a imprisonment or a fine, or both.
(5) If the company is wound up in pursuance of a resolution passed within 5 weeks after the making of the declaration, and its debts (together with interest at the official rate) are not paid or provided for in full within the period specified, it is to be presumed (unless the contrary is shown) that the director did not have reasonable grounds for his opinion.
(6) If the declaration required by subsection (3) to be delivered to the registrar is not so delivered within the time prescribed by that subsection, the company and every offices in default is liable to a fine and, for continued contravention, to a daily default fine.
A winding up in the case of which a director's statutory declaration under section 89 has been made is a "members' voluntary winding up"; and a winding up in the case of which such a declaration had not been made is a "creditors' voluntary winding up".
CHAPTER III - MEMBERS' VOLUNTARY WINDING UP
92. Power to fill vacancy in office of liquidator(1) In a members' voluntary winding up, the company in general meeting shall appoint one or more liquidators for the purpose of winding up the company's affairs and distributing its assets.
(2) On appointment of a liquidator all the powers of the directors cease, except so far as the company in general meeting or the liquidator sanctions their continuance.
93. General company meeting at each year's end(1) If the vacancy occurs by death, resignation or otherwise in the office of liquidator appointed by the company, the company in general meeting may, subject to any arrangement with its creditors, fill the vacancy.
(2) For that purpose a general meeting may be convened by any contributory or, if there were more liquidators than one, by the continuing liquidators.
(3) The meeting shall be held in manner provided by this Act or by the articles, or in such a manner as may, on application by any contributory or by the continuing liquidators, be determined by the court.
94. Final meeting prior to dissolution(1) Subject to sections 96 and 102, in the event of the winding up continuing for more that one year, the liquidator shall summon a general meeting of the company at the end of the first year from the commencement of the winding up, and of each succeeding year, or at the first convenient date within 3 months from the end of the year or such longer period as the Secretary of State may allow.
(2) The liquidator shall lay before the meeting an account of his acts and dealings, and of the conduct of the winding up, during the proceeding year.
(3) If the liquidator fails to comply with this section, he is liable to a fine.
95. Effect of company's insolvency(1) As soon as the company's affairs are fully wound up, the liquidator shall make up an account of the winding up, showing how it has been conducted and the company's property has been disposed of, and thereupon shall call a general meeting of the company for the purpose of laying before it the account, and giving an explanation of it.
(2) The meeting shall be called by advertisement in the Gazette, specifying its time, place and object and published at least one month before the meeting.
(3) Within one week after the meeting, the liquidator shall send to the registrar of companies a copy of the account, and shall make a return to him of the holding of the meeting and of its date.
(4) If the copy is not sent or the return is not made in accordance with subsection (3), the liquidator is liable to a fine and, for continued contravention, to a daily default fine.
(5) If the quorum is not present at the meeting, the liquidator shall, in lieu of the return mentioned above, make a return that the meeting was duly summoned and that no quorum of subsection (3) as to the making of the return are deemed complied with.
(6) If the liquidator fails to call a general meeting of the company as required by subsection (1) he is liable to a fine.
96. Conversion to creditors' voluntary winding up(1) This section applies where the liquidator is of the opinion that the company will be unable to pay it debts in full (together with interest at the official rate) within the period stated in the directors' declaration section 89.
(2) The liquidator shall-
(a) summon a meeting of creditors for a day not later than the 28th day after the day on which he formed that opinion;
(b) send notices of the creditors' meeting to the creditors by post not less that 7 days before the day on which that meeting is to be held;
(c) cause notice of the creditors' meeting to be advertised once in the Gazette and once at least in 2 newspapers circulating in the relevant locality (that is to say the locality in which the company's principal place of business in Great Britain was situated during the relevant period);and
(d) during the period before the day on which the creditors' meeting is to be held, furnish creditors free of charge with such information concerning the affairs of the company as they may reasonable require;
and the notice of the creditors' meeting shall state the duty imposed by paragraph (d) above.(3) The liquidator shall also-
(a) make out a statement in the prescribed form as to the affairs of the company;
(b) lay that statement before the creditors' meeting; and
(c) attend and prescribe at that meeting.
(4) The statement as to the affairs of the company shall be verified by affidavit by the liquidator and shall show;
(a) particulars of the company's assets, debts and liabilities;
(b) the names and addresses of the company's creditors;
(c) the securities held by them respectively;
(d) the dates when the securities were respectively given; and
(e) such further or other information as may be prescribed.
(5) Where the company's principal place of business in Great Britain was situated in different localities at different times during the relevant period, the duty imposed by subsection (2)(c) applies separately in relation to each of those localities.
(6) Where the company had no place of business in Great Britain during the relevant period, references in subsections (2)(c) and (5) to the company's principal place of business in Great Britain are replaced by references to its registered office.
(7) In this section "the relevant period" means the period of 6 months immediately preceding the day on which were sent the notices summoning the company meeting at which it was resolved that the company be wound up voluntarily.
(8) If the liquidator without reasonable excuse fails to comply wit6h this section, he is liable to a fine.
As from the day on which the creditors' meeting is held under section 95, this Act has effect as if;
(a) the directors' declaration under section 89 had not been made, and
(b) the creditors' meeting and the company meeting at which it was resolved that the company be wound up voluntarily were the meetings summoned in section 98 in the next Chapter;
and accordingly the winding up becomes a creditors' voluntary winding up.
97. Application of this Chapter
98. Meetings of creditors(1) Subject as follows, this Chapter applies in relation to a creditors' voluntary winding up.
Sections 98 and 99 do not apply where, under section 96 in Chapter III, a members' voluntary winding up has become a creditors' voluntary winding up.
(1) The company shall;99. Directors to lay statement of affairs before creditors(a) cause a meeting of its creditors to be summoned for a day not later than the 14th day after the day on which there is to be held the company meeting at which the resolution for voluntary winding up is to be proposed;
(b) cause the notices of the creditors' meeting to be sent by post to the creditors not less than 7 days before the day on which that meeting is to be held; and
(c) cause notice of the creditors' meeting to be advertised once in the Gazette and once at least in two newspapers circulating in the relevant locality (that is to say the locality in which the company's principal place of business in Great Britain was situated during the relevant period).
(2.) The notice of the creditors' meeting shall state either
(a) the name and address of a person qualified to act as an insolvency practitioner in relation to the company who, during the period before the day on which that meeting is to be held, will furnish creditors free of charge with such information concerning the company's affairs as they may reasonably require; or
(b) a place in the relevant locality where, on the two business days falling next before the day on which that meeting is to be held, a list of creditors will be available for inspection free of charge.
(3) Where the company's principal place of business in Great Britain was situated in different localities at different times during the relevant period, the duties imposed by subsections (1)(c) and (2)(b) above apply separately in relation to each of those localities.
(4) Where the company had no place of business in Great Britain during the relevant period, references in subsections (1)(c) and (3) to the company's principal place of business in Great Britain are replaced by references to its registered office.
(5) In this section "the relevant period" means the period of 6 months immediately preceding the day on which were sent the notices summoning the company meeting at which it was resolved that the company be wound up voluntarily.
(6) If the company without reasonable excuse fails to comply with subsection (1) or (2), it is guilty of an offence and liable to a fine.
100. Appointment of liquidator(1.) The directors of the company shall;
(a) Make out a statement in the prescribed form as to the affairs of the company;
(b) cause that statement to be laid before the creditors' meeting under section 98; and
(c) appoint one of their number to preside at that meeting; and it is the duty of the director so appointed to attend the meeting and preside over it.
(2) The statement as to the affairs of the company shall be verified by affidavit by some or all of the directors and shall show;
(a) particulars of the company's assets, debts and liabilities;
(b) the names and addresses of the company's creditors;
(c) the securities held by them respectively;
(d) the dates when the securities were respectively given; and
(e) such further or other information as may be prescribed.
(3) If;
(a) the directors without reasonable excuse fail to comply with subsection (1) or (2); or
(b) any director without reasonable excuse fails to comply with subsection (1), so far as requiring him to attend and preside at the creditors' meeting, the directors are or (as the case may be) the director is guilty of an offence and liable to a fine.
101. Appointment of liquidation committee(1) The creditors and the company at their respective meetings mentioned in section 98 may nominate a person to be liquidator for the purpose of winding up the company's affairs and distributing its assets.
(2) The liquidator shall be the person nominated by the creditors or, where no person has been so nominated, the person (if any) nominated by the company.
(3) In the case of different persons being nominated, any director, member or creditor of the company may, within 7 days after the date on which the nomination was made by the creditors, apply to the court for an order either;
(a) directing that the person nominated as liquidator by the company shall 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.
102. Creditors' meeting where winding up converted under Section 96(1) The creditors at the meeting to be held under section 98 or at any subsequent meeting may, if they think fit, appoint a committee ("the liquidation committee") of not more than 5 persons to exercise the functions conferred on it by or under this Act.
(2) If such a committee is appointed, the company may, either at the meeting at which the resolution for voluntary winding up is passed or at any time subsequently in general meeting, appoint such number of persons as they think fit to act as members of the committee, not exceeding 5.
(3) However, the creditors may, if they think fit, resolve that all or any of the persons so appointed by the company ought not to be members of the liquidation committee; and if the creditors so resolve -
(a) the persons mentioned in the resolution are not then, unless the court otherwise directs, qualified to act as members of the committee; and
(b) on any application to the court under this provision the court may, if it thinks fit, appoint other persons to act as such members in place of the persons mentioned in the resolution.
(4) In Scotland, the liquidation committee has, in addition to the powers and duties conferred and imposed on it by this Act, such of the powers and duties of commissioners on a bankrupt estate as may be conferred and imposed on liquidation committees by the rules.
103. Cesser of directors' powersWhere, in the case of a winding up which was, under section 96 in Chapter III, converted to a creditors' voluntary winding up, a creditors' meeting is held in accordance with section 95, any appointment made or committee established by a meeting held in accordance with section 98 in this Chapter.
104. Vacancy in office of liquidatorOn the appointment of a liquidator, all the powers of the directors cease, except so far as the liquidation committee (or, if there is no such committee, the creditors) sanction their continuance.
105. Meetings of company and creditors at each year's endIf a vacancy occurs, by death, resignation or otherwise, in the office of a liquidator (other than a liquidator appointed by, or by the direction of, the court), the creditors may fill the vacancy.
106. Final meeting prior to dissolution(1) If the winding up continues for more than one year, the liquidator shall summon a general meeting of the company and a meeting of the creditors at the end of the first year from the commencement of the winding up, and of each succeeding year, or at the first convenient date within 3 months from the end of the year or such longer period as the Secretary of State may allow.
(2) The liquidator shall lay before each of the meetings an account of his acts and dealings and of the conduct of the winding up during the preceding year.
(3) If the liquidator fails to comply with this section, he is liable to a fine.
(4) Where under section 96 a members' voluntary winding up has become a creditors' winding up, and the creditors' meeting under section 95 is held 3 months or less before the end of the first year from the commencement of the winding up, the liquidator is not required by this section to summon a meeting of creditors at the end of that year.
(1) As soon as the company's affairs are fully wound up, the liquidator shall make up an account of the winding up, showing how it has been conducted and the company's property has been disposed of, and thereupon shall call a general meeting of the creditors for the purpose of laying the account before the meetings and giving explanation of it.
(2) Each such meeting shall be called by advertisement in the Gazette specifying the time, place and object of the meeting, and published at least once a month before it.
(3) Within one week after the date of the meetings (or, if they are not held on the same date, after the date of the later one) the liquidator shall send to the registrar of companies a copy of the account, and shall make a return to him of the holding of the meetings and of their dates.
(4) If the copy is not sent or the return is not made in accordance with subsection (3), the liquidator is liable to a fine, for continued contravention, to a daily default fine.
(5) However, if a quorum is not present at either such meeting, the liquidator shall, in lieu of the return required by subsection (3), make a return that the meeting was duly summoned and that no quorum was present; and upon such return being made the provisions of that subsection as to the making of the return are, in respect of that meeting, deemed complied with.
(6) If the liquidator fails to call a general meeting of the company or a meeting of the creditors as required by this section, he is liable to a fine.
107. Distribution of company's property108. Appointment of removal of liquidator by the courtSubject to the provisions of this Act as to preferential payments, the company's property in a voluntary winding up shall on the winding up be applied in satisfaction of the company's liabilities pari passu and, subject to that application, shall (unless the articles otherwise provide) be distributed among the members according to their rights and interests in the company.
109. Notice by liquidator of his appointment(1) If from any cause whatever there is no liquidator acting, the court may appoint a liquidator.
(2) The court may, on cause shown, remove a liquidator and appoint another.
110. Acceptance of shares, etc., as consideration for sale of company property(1) The liquidator shall, within 14 days after his appointment, publish in the Gazette and deliver to the registrar of companies for registration a notice of his appointment in the form prescribed by statutory instrument made by the Secretary of State.
(2) If the liquidator fails to comply with this section, he is liable to a fine and, for continued contravention, to a daily default fine.
111. Dissent from arrangement Under Section 100(1) This section applies, in the case of a company proposed to be, or being, wound up voluntarily, where the whole or part of the company's business or property is proposed to be transferred or sold to another company ("the transferee company"), whether or not the latter is a company within the meaning of the Companies Act.
(2) With the requisite sanction, the liquidator of the company being, or proposed to be, wound up ("the transferee company") may receiver, in compensation or part compensation for the transfer or sale, shares, policies or other like interests in the transferee company for distribution among the members of the transferor company.
(3) The sanction requisite under subsection (2) is -
(a) in the case of a members' voluntary winding up, that of a special resolution of the company, conferring either a general authority on the liquidator or an authority in respect of any particular arrangement, and
(b) in the case of a creditors' voluntary winding up, that of either the court or the liquidation committee.
(4) Alternatively to subsection (2), the liquidator may (with that sanction) enter into any other arrangement whereby the members of the transferor company may, in lieu of receiving cash, shares, policies or other like interests (or in addition thereto), participate in the profits of, or receiver any other form of benefit from, the transferee company.
(5) A sale or arrangement in pursuance of this section is binding on members of the transferor company.
(6) A special resolution is not invalid for purposes of this section by reason that it is passed before or concurrently with a resolution for voluntary winding up or for appointing liquidators; but if an order is made within a year for winding up the company by the court, the special resolution is not valid unless sanctioned by the court.
112. Reference of questions to court(1) This section applies in the case of a voluntary winding up where, for the purposes of section 110(2) or (4), there has been passed a special resolution of the transferor company providing the sanction requisite for the liquidator under that section.
(2) If a member of the transferor company who did not vote in favour of the special resolution expresses his dissent from it in writing, addressed to the liquidator and left at the company's registered office within 7 days after the passing of the resolution, he may require the liquidator either to abstain from carrying the resolution into effect or to purchase his interest at a price to be determined by agreement or by arbitration under this section.
(3) If the liquidator elects to purchase the member's interest, the purchase money must be paid before the company is dissolved and be raised by the liquidator in such manner as may be determined by special resolution.
(4) For the purposes of an arbitration under this section, the provisions of the Companies Clauses Consolidation Act 1845 or, in the case of a winding up in Scotland, the Companies Clauses Consolidation (Scotland) Act 1845 with respect to the settlement of disputes by arbitration are incorporated with this Act, and -
(a) in the construction of those provisions this Act is deemed the special Act and "the company" means the transferor company, and
(b) any appointment by the incorporated provisions directed to be made under the hand of the secretary or any two of the directors may be made in writing by the liquidator (or, if there is more than one liquidator, then any two or more of them).
113. Court's power to control proceedings (Scotland)(1) The liquidator or any contributory or creditor may apply to the court to determine any question arising in the winding up of a company, or to exercise, as respects the enforcing of calls or any other matter, all or any of the powers which the court might exercise if the company were being wound up by the court.
(2) The court, if satisfied that the determination of the question or the required exercise of power will be just and beneficial, may accede wholly or partially to the application on such terms and conditions as it thinks fit, or may make such other order on the application as it thinks just.
(3) A copy of an order made by virtue of this section staying the proceedings in the winding up shall forthwith be forwarded by the company, or otherwise as may be prescribed, to the registrar of companies, who shall enter it in his records relating to the company.
114. No liquidator appointed or nominated by companyIf the court, on the application of the liquidator in the winding up of a company registered in Scotland, so directs, no action or proceeding shall be proceeded with or commenced against the company except by leave of the court and subject to such terms as the court may impose.
115. Expenses of voluntary winding up(1) This section applies where, in the case of a voluntary winding up, no liquidator has been appointed or nominated by the company.
(2) The powers of the directors shall not be exercised, except with the sanction of the court or (in the case of a creditors' voluntary winding up) so far as may be necessary to secure compliance with the section 98 (creditors' meeting) and 99 (statement of affairs), during the period before the appointment or nomination of a liquidator of the company.
(3) Subsection (2) does not apply in relation to the powers of the directors -
(a) to dispose of perishable goods and other goods the value of which is likely to diminish if they are not immediately disposed of, and
(b) to do all such other things as may be necessary for the protection of the company's assets.
(4) If the directors of the company without reasonable excuse fail to comply with this section, they are liable to a fine.
116. Saving for certain rightsAll expenses properly incurred in the winding up, including the remuneration of the liquidator, are payable out of the company's assets in priority to all other claims.
The voluntary winding up of a company does not bar the right of any creditor or contributory to have it wound up by the court; but in the case of an application by a contributory the court must be satisfied that the rights of the contributories will be prejudiced by a voluntary winding up.
117. High Court and county court jurisdiction118. Proceedings taken in wrong court(1) The High Court has jurisdiction to wind up any company registered in England and Wales.
(2) Where the amount of a company's share capital paid up or credited as paid up does not exceed £120,000, then (subject to this section) the county court of the district in which the company's registered office is situated has concurrent jurisdiction with the High Court to wind up the company.
(3) The money sum for the time being specified in subsection (2) is subject to increase or order under section 416 in Part XV.
(4) The Lord Chancellor may by order in a statutory instrument exclude a county court from having winding-up jurisdiction, and for the purposes of that jurisdiction may attach its district, or any part thereof, to any other county court, and may by statutory instrument revoke or vary any such order.
In exercising the powers of this section, the Lord Chancellor shall provide that a county court is not to have winding-up jurisdiction unless it has for the time being jurisdiction for the purposes of Parts VIII to XI of this Act (individual insolvency).
(5) Every court in England and Wales having winding-up jurisdiction has for the purposes of that jurisdiction all the powers of the High Court; and every prescribed officer of the court shall perform any duties which an officer of the High Court may discharge by order of a judge of that court or otherwise in relation to winding up.
(6) For the purposes of this section, a company's "registered office" is the place which has longest been its registered office during the 6 months immediately preceding the presentation of the petition for winding up.
119. Proceedings in county court; case stated for High Court(1) Nothing in section 117 invalidates a proceeding by reason of its being taken in the wrong court.
(2) The winding up of a company by the court in England and Wales, or any proceedings in the winding up, may be retained in the court in which the proceedings were commenced, although it may not be the court in which they ought to have been commenced.
(1) If any question arises in any winding-up proceedings in a county court which all parties to the proceedings, or which one of them and the judge of the court, desire to have determined in the first instance in the High Court, the judge shall state the facts in the form of a special case for the opinion of the High Court.
(2) Thereupon the special case and the proceedings (or such of them as may be required) shall be transmitted to the High Court for the purposes of the determination.
Jurisdiction Scotland 120. Court of Session and sheriff court jurisdiction
121. Power to remit winding up to Lord Ordinary(1) The Court of Session has jurisdiction to wind up any company registered in Scotland.
(2) When the Court of Session is in vacation, the jurisdiction conferred on that court by this section may (subject to the provisions of this Part) be exercised by the judge acting as vacation judge in pursuance of section 4 of the Administration of Justice (Scotland) Act 1933.
(3) Where the amount of a company's share capital paid up or credited as paid up does not exceed £120,000, the sheriff court of the sheriffdom in which the company's registered office is situated has concurrent jurisdiction with the Court of Session to wind up the company; but -
(a) the Court of Session may, if it thinks fit expedient having regard to the amount of the company's assets to do so -
(i) remit to a sheriff court any petition presented to the Court of Session for winding up such a company, or
(ii) require such a petition presented to a sheriff court to be remitted to the Court of Session; and
(b) the Court of Session may require any such petition as above mentioned presented to one sheriff court to be remitted to another sheriff court; and
(c) in a winding up in the sheriff court the sheriff may submit a stated case for the opinion of the Court of Session on any question of law arising in that winding up.
(4) For purposes of this section, the expression "registered office" means the place which has longest been the company's registered office during the 6 months immediately preceding the presentation of the petition for winding up.
(5) The money sum for the time being specified in subsection (3) is subject to increase or reduction by order under section 416 in Part XV.
(1) The Court of Session may, by Act of Sederunt, make provision for the taking of proceedings in a winding up before one of the Lords Ordinary; and, where provision is so made, the Lord Ordinary has, for the purposes of the winding up, all the powers and jurisdiction of the court.
(2) However, the Lord Ordinary may report to the Inner House any matter which may arise in the course of a winding up.
Grounds and effect of winding-up petition
122. Circumstances in which company may be wound up by the court
(1) A company may be wound up by the court if -
(a) the company has by special resolution resolved that the company be wound up by the court,
(b) being a public company which was registered as such on its original incorporation, the company has not been issued under section 117 of the Companies Act (public company share capital requirements) and more than a year has expired since it was so registered,
it is an old public company, within the meaning of the Consequential Provisions Act,
(d) the company does not commence its business within a year from its incorporation or suspends its business for a whole year.
(e)except in the case of a private company limited by shares or by guarantee the number of members is reduced below 2,
(f) the company is unable to pay its debts,
(g) the court is of the opinion that it is just and equitable that the company should be wound up.
(2) In Scotland, a company which the Court of Session has jurisdiction to wind up may be wound up by the Court if there is subsisting a floating charge over property comprised in the company's property and undertaking, and the court is satisfied that the security of the creditor entitled to the benefit of the floating charge is in jeopardy.
For this purpose a creditors' security is deemed to be in jeopardy if the Court is satisfied that events have occurred or are about to occur which render it unreasonably in the creditor's interests that the company should retain power to dispose of the property which subject to the floating charge.
123. Definition of inability to pay debts
(1) A company is deemed unable to pay its debts -
(a) of a creditor (by assignment or otherwise) to whom the company is indebted in a sum exceeding £750 then due has served on the company, by leaving it at the company's registered office, a written demand (in the prescribed form) requiring the company to pay the sum so due and the company has for 3 weeks there-after neglected to pay the sum or to secure or compound for it to the reasonable satisfaction of the creditor, or
(b) if, in England and Wales, execution or other process issued on a judgment, decree or order of any court in favour of a creditor of the company is returned unsatisfied in whole or in part, or
(c) if, in Scotland, the induciae of a charge for payment on an extract decree, or an extract registered bond, or an extract registered protest, have expired without payment being made, or
(d) if, in Northern Ireland, a certificate of unenforceability has been granted in respect of a judgment against the company, or
(e) if it is proved to the satisfaction of the court that the company is unable to pay its debts as they fall due.
(2) A company is also deemed unable to pay its debts if it is proved to the satisfaction of the court that the value of the company's assets is less than the amount of its liabilities, taking into account its contingent and prospective liabilities.
(3) The money sum for the time being specified in subsection (1)(a) is subject to increase or reduction by order under section 416 in Part XV.
124. Application for winding up
(1) Subject to the provisions of this section, an application to the court for the winding up of a company shall be by petition presented either by the company, or the directors, or by any creditor or creditors (including any contingent or prospective creditor or creditors), contributory or contributories or by clerk of a magistrates' court in the exercise of the power conferred by section 87A of the Magistrates' Courts Act 1980 (enforcement of fines imposed on companies, or by all or any of those parties, together or separately.
(2) Except as mentioned below, a contributory is not entitled to present a winding-up petition unless either -
(a) the number of members is reduced below 2, or
(b) the shares in respect of which he is a contributory, or some of them, either were originally allotted to him, or have been held by him, and registered in his name, for at least 6 months during the 18 months before the commencement of the winding up, or have devolved on him through the death of a former holder.
(3) A person who is liable under section 76 to contribute to a company's assets in the event of its being wound up may petition on either of the grounds set out in section 122(1)(f) and (g), and subsection (2) does not then apply; but unless the person is a contributory otherwise than under section 76, he may not in his character as contributory petition on any other ground.
This subsection is deemed included in Chapter VII or Part V of the Companies Act (redeemable shares; purchase by a company of its own shares) for the purposes of the Secretary of State's power to make regulations under section 179 of that Act.
(4) A winding-up petition may be presented by the Secretary of State -
(a) if the ground of the petition is that in section 122(1)(b) or (c), or
(b) in a case falling within section 124A below.
(5) Where a company is being wound up voluntarily in England and Wales, a winding-up petition may be presented by the official receiver attached to the court as well as by any other person authorised in that behalf under the other provisions of this section; but the court shall not make a winding-up order on the petition unless it is satisfied that the voluntary winding up cannot be continued with due regard to the interests of the creditors or contributories.
124A. Petition for winding up on grounds of public interest
(1) Where it appears to the Secretary of State from -
(a) any report made or information obtained under Part XIV of the Companies Act 1985 (company investigations, etc.),
(b) any report made under section 94 or 177 of the Financial Services Act 1986 or any information obtained under section 105 of that Act.
(c) any information obtained under section 2 of the Criminal Justice Act 1987 or section 52 of the Criminal Justice (Scotland) Act 1987 (fraud investigations), or
(d) any information obtained under section 83 of the Companies Act 1989 (powers exercisable for purpose of assisting overseas regulatory authorities),
that it is expedient in the public interest that a company should be wound up, he may present a petition for it to be wound up if the court thinks it just and equitable for it to be so.
(2) (Non-application). This section does not apply if the company is already being wound up by the court.
125. Powers of court on hearing of petition
(1) On hearing a winding-up petition the court may dismiss it, or adjourn the hearing conditionally or unconditional, or make an interim order, or any other order that it thinks fit; but the court shall not refuse to make a winding-up order on the ground only that the company's assets have been mortgaged to an amount equal to or in excess of those assets, or that the company has no assets.
(2) If the petition is presented by members of the company as contributories on the ground that it is just and equitable that the company should be wound up, the court if it is of the option -
(a) that the petitioners are entitled to relief either by winding up the company or by some other means, and
(b) that in the absence of any other remedy it would be just and equitable that the company should be wound up,
shall make a winding-up order; but this does not apply if the court is also of the opinion both that some other remedy is available to the petitioners and that they are acting unreasonably in seeking to have the company wound up instead of pursuing that other remedy.
126. Power to stay or restrain proceedings against company
(1) At any time after the presentation of a winding-up petition, and before a winding-up order has been made, the company, or any creditor or contributory, may -
(a) where any action or proceeding against the company is pending in the High Court or Court of Appeal in England and Wales or Northern Ireland, apply to the court in which the action or proceeding is pending for stay of proceedings therein, and
(b) where any other action or proceeding is pending against the company, apply to the court having jurisdiction to wind up the company to restrain further proceedings in the action or proceeding;
and the court to which application is so made may (as the case may be) stay, sist or restrain the proceedings accordingly on such terms as it thinks fit.
(2) In the case of a company registered under section 680 of the Companies Act (pre-1862 companies; companies formed under legislation other than the Companies Acts) or the previous corresponding legislation, where the application to stay, sist or restrain is by a creditor, this section extends to actions and proceedings against any contributory of the company.
127. Avoidance of property dispositions
In a winding up by the court, any disposition of company's property, and any transfer of shares, or alteration in the status of the company's members, made after the commencement of the winding up is, unless the court otherwise orders, void.
128. Avoidance of attachments etc
(1) Where a company registered in England and Wales is being wound up by the court, any attachment, sequestration, distress or execution put in force against the estate or effects of the company after the commencement of the winding up is void.
(2) This section, so far relates to any estate of the company situated in England and Wales, applies in the case of a company registered in Scotland as it applies in the case of a company registered in England and Wales.
Commencement of winding up
129. Commencement of winding up by the court
(1) If, before the presentation of a petition for the winding up of a company by the court, a resolution has been passed by the company for voluntary winding up, the winding up of the company is deemed to have commenced at the time of the passing of the resolution; and unless the court, on proof of fraud or mistake, directs otherwise, all proceedings taken in the voluntary winding up are deemed to have been validly taken.
(2) In any other case, the winding up of a company by the court is deemed to commence at the time of the presentation of the petition for winding up.
130. Consequences of winding-up order
(1) On the making of a winding-up order, a copy of the order must forthwith be forwarded by the company otherwise as may be prescribed) to the registrar of companies, who shall enter it in his records relating to the company.
(2) When a winding-up order has been made or a provisional liquidator has been appointed, no action or proceeding shall be proceeded with or commenced against the company or its property, except by leave of the court and subject to such terms as the court may impose.
(3) When an order has been made for winding up a company registered under section 680 of the Companies Act, no action or proceeding shall be commenced or proceeded with against the company or its property or any contributory of the company, in respect of any debt of the company, except by leave of the court, and subject to such terms as the court may impose.
(4) An order for winding up a company operates in favour of all the creditors and of all the contributories of the company as made on the joint petition of a creditor and of a contributory.
Investigation Procedures
131. Company's statement of affairs
(1) Where the court has made a winding-up order or appointed a provisional liquidator, the official receiver may require some or all of the persons mentioned in subsection (3) below to make out and submit to him a statement in the prescribed form as to the affairs of the company.
(2) The statement shall be verified by affidavit by the persons required to submit it and shall show -
(a) particulars of the company's assets, debts and liabilities;
(b) the names and addresses of the company's creditors;
the securities held by them respectively;
(d) the dates when the securities were respectively give; and
(e) such further or other information as may be prescribed or as the official receiver may require.
(3) The persons referred to in subsection (1) are -
(a) those who are or have been officers of the company;
(b) those who have taken part in the formation of the company at any time within one year before the relevant date;
(c) those who are in the company's employment, or have been in its employment within that year, and are in the official receiver's opinion capable of giving the information required;
(d) those who are or have been within that year officers of, or in the employment of, a company which is, or within that year was, an officer of the company.
(4) Where any persons are required under this section to submit a statement of affairs to the official receiver, they shall do so (subject to the next subsection) before the end of the period of 21 days beginning with the day after that on which the prescribed notice of the requirement is given to them by the official receiver.
(5) The official receiver, if he thinks fit, may -
(a) at any time release a person from an obligation imposed on him under subsection (1) or (2) above; or
(b) either when giving the notice mentioned in subsection (4) or subsequently, extended the period so mentioned;
and where the official receiver has refused to exercise a power conferred by this section, the court, if it thinks fit, may exercise it.
(6) In this section -
"employment" includes employment under a contract for services; and
"the relevant date" means -
(a) in a case where a provisional liquidator is appointed, the date of his appointment; and
(b) in a case where no such appointment is made, the date of the winding-up order.
(7) If a person without reasonable excuse fails to comply with any obligation imposed under this section, he is liable to a fine and, for continued contravention, to a daily default fine.
(8) In the application of this section to Scotland references to the official receiver are to the liquidator or, in a case where a provisional liquidator is appointed, the provisional liquidator.
132. Investigation by official receiver
(1) Where a winding-up order is made by the court in England and Wales, it is the duty of the official receiver to investigate -
(a) if the company has failed, the causes of the failure; and
(b) generally, the promotion, formation, business, dealings and affairs of the company,
and to make such report (if any) to the court as he thinks fit.
(2) The report is, in any proceedings, prima facie evidence of the facts stated in it.
133. Public examination of officers
(1) Where a company is being wound up by the court, the official receiver or, in Scotland, the liquidator may at any time before the dissolution of the company apply to the court for the public examination of any person who -
(a) is or has been an officer of the company; or
(b) has acted as liquidator or administrator of the company or as receiver or manager or, in Scotland, receiver of its property; or
(c) not being a person falling within paragraph (a) or (b), is or has been concerned, or has taken part, in the promotion, formation or management of the company.
(2) Unless the court otherwise orders, the official receiver or, in Scotland, the liquidator shall make an application under subsection (1) if he is requested in accordance with the rules ro do so by -
(a) one-half, in value, of the company's creditors; or
(b) three-quarters, in value, of the company's contributories.
(3) On an application under subsection (1), the court shall direct that a public examination of the person to whom the application relates shall be held on a day appointed by the court; and that person shall attend on that day and be publicly examined as to the promotion formation or management of the company or as to the conduct of its business and affairs, or his conduct or dealings in relation to the company.
(4) The following may take part in the public examination of a person under this section and may question that person concerning the matters mentioned in subsection (3), namely -
(a) the official receiver;
(b) the liquidator of the company;
(c) any person who has been appointed as special manager of the company's property or business;
(d) any creditor of the company who has tendered a proof or, in Scotland, submitted a claim in the winding up;
(e) any contributory of the company.
134. Enforcement of Section 133
(1) If a person without reasonable excuse fails at any time to attend his public examination under section 133, he is guilty of a contempt of court and liable to be punished accordingly.
(2) In a case where a person without reasonable excuse fails at any time to attend his examination under section 133 or there are reasonable grounds for believing that a person has absconded, or is about to abscond, with a view to avoiding or delaying his examination under that section, the court may cause a warrant to be issued to a constable or prescribed officer of the court -
(a) for the arrest of that person; and
(b) for the seizure of any books, papers, records, money or goods in that persons's possession.
(3) In such a case the court may authorise the person arrested under the warrant to be kept in custody, and anything seized under such a warrant to be held, in accordance with the rules, until such time as the court may order.
135. Appointment and powers of provisional liquidator136. Functions of official receiver in relation to office of liquidator(1) Subject to the provisions of this section, the court may, at any time after the presentation of a winding-up petition, appoint a liquidator provisionally.
(2) In England and Wales the appointment of a provisional liquidator may be made at any time before the making of a winding-up order; and either the official receiver or any other fit person may be appointed.
(3) In Scotland, such an appointment may be made at any time before the first appointment of liquidators.
(4) The provisional liquidator shall carry out such functions as the court may confer on him.
(5) When a liquidator is provisionally appointed by the court, his powers may be limited by the order appointing him.
137. Appointment by Secretary of State(1) The following provisions of this section have effect, subject to section 140 below, on a winding-up order being made by the court in England and Wales.
(2) The official receiver, by virtue of his office, becomes the liquidator of the company and continues in office until another person becomes liquidator under the provisions of this Part.
(3) The official receiver is, by virtue of his office, the liquidator during any vacancy.
(4) At any time when he is the liquidator of the company, the official receiver may summon separate meetings of the company's creditors and contributories for the purpose of choosing a person to be liquidator of the company in place of the official receiver.
(5) It is the duty of the official receiver -
(a) as soon as practicable in the period of 12 weeks beginning with the day on which the winding-up order was made, to decide whether to exercise his power under subsection (4) to summon meetings, and
(b) if in pursuance of paragraph (a) he decides not to exercise that power, to give notice of his decision, before the end of that period, to the court and to the company's creditors and contributories, and
(c) (whether or not he has decided to exercise that power) to exercise his power to summon meetings under subsection (4) if he is at any time requested, in accordance with the rules, to do so by one-quarter, in value, of the company's creditors;
and accordingly, where the duty imposed by paragraph (c) arises before the official receiver has performed a duty imposed by paragraph (a) or (b), he is not required to perform the latter duty.
(6) A notice given under subsection (5)(b) to the company's creditors shall contain an explanation of the creditors' power under subsection (5)(c) to require the official receiver to summon meetings of the company's creditors and contributories.
138. Appointment of liquidator in Scotland(1) In a winding up by the court in England and Wales the official receiver may, at any time when he is the liquidator of the company, apply to the Secretary of State for the appointment of a person as liquidator in his place.
(2) If meetings are held in pursuance of a decision under section 136(5)(a), but no person is chosen to be liquidator as a result of those meetings, it is the duty of the official receiver to decide whether to refer the need for an appointment to the Secretary of State.
(3) On an application under subsection (1), or a reference made in pursuance of a decision under subsection (2), the Secretary of State shall either make an appointment or decline to make one.
(4) Where a liquidator has been appointed by the Secretary of State under subsection (3), the liquidator shall give notice of his appointment to the company's creditors, or, if the court so allows, shall advertise his appointment in accordance with the directions of the court.
(5) In that notice or advertisement the liquidator shall -
(a) state whether he proposes to summon a general meeting of the company's creditors under section 141 below for the purpose of determining (together with any meeting of contributories) whether a liquidation committee should be established under that section, and
(b) if he does not propose to summon such a meeting, set out the power of the company's creditors under that section to require him to summon one.
139. Choice of liquidator at meetings of creditors and contributories(1) Where a winding-up order is made by the court in Scotland, a liquidator shall be appointed by the court at the time when the order is made.
(2) The liquidator so appointed (here referred to as "the interim liquidator") continues in office until another person becomes liquidator in his place under this section or the next.
(3) The interim liquidator shall (subject to the next subsection) as soon as practicable in the period of 28 days beginning with the day on which the winding-up order was made or such longer period as the court may allow, summon separate meetings of the company's creditors nd contributories for the purpose of choosing a person (who may be the person who is the interim liquidator) to be liquidator of the company in place of the interim liquidator.
(4) If it appears to the interim liquidator, in any case where a company is being wound up on the grounds including its inability to pay its debts, that it would be inappropriate to summon under section (3) a meeting of the company's contributories, he may summon only a meeting of the company's creditors for the purpose mentioned in that subsection.
(5) If one or more meetings are held in pursuance of this section but no person is appointed or nominated by the meeting or meetings, the interim liquidator shall make a report to the court which shall appoint either the interim liquidator or some other person to be liquidator of the company.
(6) A person who becomes liquidator of the company in place of the interim liquidator shall, unless he is appointed by the court, forthwith notify the court of that fact.
140. Appointment by the court following administration or voluntary arrangement(1) This section applies where a company is being wound up by the court and separate meetings of the company's creditors and contributories are summoned for the purpose of choosing a person to be liquidator of the company.
(2) The creditors and the contributories at their respective meetings may nominate a person to be liquidator.
(3) The liquidator shall be the person nominated by the creditors or, where no person has been nominated, the person (if any) nominated by the contributories.
(4) In the case of different persons being nominated, any contributory or creditor may, within 7 days after the date on which the nomination was made by the creditors, apply to the court for an order either -
(a) appointing the person nominated as liquidator by the contributories to be a 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.
(1) Where a winding-up order is made immediately upon the discharge of an administration order, the court may appoint as liquidator of the company the person who has ceased on the discharge of the administration order to be the administrator of the company.
(2) Where a winding-up order is made at a time when there is a supervisor of a voluntary arrangement approved in relation to the company under Part I, the court may appoint as liquidator of the company the person who is the supervisor at the time when the winding-up order is made.
(3) Where the court makes an appointment under this section, the official receiver does not become the liquidator as otherwise provided by section 136(2), and he has no duty under section 136(5) (a) or (b) in respect of the summoning of creditors' or contributories' meetings.
Liquidation committees 141. Liquidation committee (England and Wales)
142. Liquidation committee (Scotland)(1) Where a winding-up order has been made by the court in England and Wales and separate meetings of creditors and contributories have been summoned for the purpose of choosing a person to be liquidator, those meetings may establish a committee ("the liquidation committee") to exercise the functions conferred on it by or under this Act.
(2) The liquidator (not being the official receiver) may at any time, if he thinks fit, summon separate general meetings of the company's creditors and contributories for the purpose of determining whether such a committee should be established and, if it is so determined, of establishing it.
The liquidator (not being the official receiver) shall summon such a meeting if he is requested, in accordance with the rules, to do so by one-tenth, in value, of the company's creditors.
(3) Where meetings are summoned under this section, or for the purpose of choosing a person to be liquidator, and either, the meeting of creditors or meeting of contributories decides that a liquidation committee should be established, but the other meeting does not so decide or decides that a committee should not be established, the committee shall be established in accordance with the rules, unless the court otherwise orders.
(4) The liquidation committee is not to be able or required to carry out its functions at any time when the official receiver is liquidator; but at any such time its functions are vested in the Secretary of State except to the extent that the rules otherwise provide.
(5) Where there is for the time being no liquidation committee, and the liquidator is a person other than the official receiver, the functions of such a committee are vested in the Secretary of State except to the extent that the rules otherwise provide.
(1) Where a winding-up order has been made by the court in Scotland and separate meetings of creditors and contributories have been summoned for the purpose of choosing a person to be liquidator or, under section 138(4), only a meeting of creditors has been summoned for that purpose, those meetings or (as the case may be) that meeting may establish a committee ("the liquidation committee") to exercise the functions conferred on it by or under this Act.
(2) The liquidator may at any time, if he thinks fit, summon separate general meetings of the company's creditors and contributories for the purpose of determining whether such a committee should be established and, if it is so determined, of establishing it.
(3) The liquidator, if appointed by the court otherwise than under section 139(4)(a), is required to summon meetings under subsection (2) if he is requested, in accordance with the rules, to do so by one-tenth, in value, of the company's creditors.
(4) Where meetings are summoned under this section, or for the purpose of choosing a person to be liquidator, and either the meeting of creditors or the meeting of contributories decides that a liquidation committee should be established, but the other meeting does not so decide or decides that a committee should not be established, the committee shall be established in accordance with the rules, unless the court otherwise orders.
(5) Where in the case of any winding up there is for the time being no liquidation committee, the functions of such a committee are vested in the court except to the extent that the rules otherwise provide.
(6) In addition to the powers and duties conferred and imposed on it by this Act, a liquidation committee has such of the powers and duties of commissioners in a sequestration as may be conferred and imposed on such committees by the rules.
The liquidator's functions 143. General functions in winding up by the court
144. Custody of company's property(1) The functions of the liquidator of a company which is being wound up by the court are to secure that the assets of the company are got in, realised and distributed to the company's creditors and, if there is surplus, to the persons entitled to it.
(2) It is the duty of the liquidator of a company which is being wound up by the court in England and Wales, if he is not the official receiver -
(a) to furnish the official receiver with such information,
(b) to produce to the official receiver, and permit inspection by the official receiver of, such books, papers and other records, and
(c) to give the official receiver such other assistance,
as the official receiver may reasonably require for the purposes of carrying out his functions in relation to the winding up.
145. Vesting of company property in liquidator(1) When a winding-up order has been made, or where a provisional liquidator has been appointed, the liquidator or the provisional liquidator (as the case may be) shall take into his custody or under his control all the property and things in action to which the company is or appears to be entitled.
(2) In a winding up by the court in Scotland, if and so long as there is no liquidator, all the property of the company is deemed to be in the custody of the court.
146. Duty to summon final meeting(1) When a company is being wound up by the court, the court may on the application of the liquidator by order direct that all or any property of whatsoever description belonging to the company or held by trustees on its behalf shall vest in the liquidator by his official name; and thereupon the property to which the order relates vests accordingly.
(2) The liquidator may, after giving such indemnity (if any) as the court may direct, bring or defend in his official name any action or other legal proceedings which relates to that property or which it is necessary to bring or defend for the purpose of effectually winding up the company and recovering its property.
(1) Subject to the next subsection, if it appears to the liquidator of a company which is being wound up by the court that the winding- up of the company is for practical purposes complete and the liquidator is not the official receiver, the liquidator shall summon a final general meeting of the company's creditors which -
(a) shall receive the liquidators' report of the winding-up, and
(b) shall determine whether the liquidator should have his release under section 174 in Chapter VII of this Part.
(2) The liquidator may, if he thinks fit, give the notice summoning the final general meeting at the same time as giving notice of any final distribution of the company's property but, if summoned for an earlier date, that meeting shall be adjourned (and, in necessary, further adjourned) until a date on which the liquidator is able to report to the meeting that the winding up of the company is for practical purposes complete.
(3) In the carrying out of his functions in the winding up it is the duty of the liquidator to retain sufficient sums from the company's property to cover the expenses of summoning and holding the meeting required by this section.
147. Power to stay or sist winding up148. Settlement of list of contributories and application of assets(1) The court may at any time after an order for winding-up, on the application either of the liquidator or the official receiver or any creditor or contributory, and on proof to the satisfaction of the court that all proceedings in the winding up ought to be stayed or sisted, make an order staying or sisting the proceedings, either altogether or for a limited time, on such terms and conditions as the court thinks fit.
(2) The court may, before making an order, require the official receiver to furnish to it a report with respect to any facts or matters which are in his opinion relevant to the application.
(3) A copy of every order made under this section shall forthwith be forwarded by the company, or otherwise as may be prescribed, to the registrar of companies, who shall enter it in his records relating to the company.
149. Debts due from contributory company(1) As soon as may be after making a winding-up order, the court shall settle a list of contributories, with power to rectify the register of members in all cases where rectification is required in pursuance of the Companies Act or this Act, and shall cause the company's assets to be collected, and applied in discharge of its liabilities.
(2) If it appears to the court that it will not be necessary to make calls on or adjust the rights of contributories, the court may dispense with the settlement of a list of contributories.
(3) In settling the list, the court shall distinguish between persons who are contributories in their own right and persons who are contributories as being representatives of or liable for the debts of others.
150. Power to make calls(1) The court may, at any time after making a winding-up order, make an order on any contributory for the time being on the list of contributories to pay, in manner directed by the order, any money due from him (or from the estate of the person he represents) to the company, exclusive of any money payable by him or the estate by virtue of any call in pursuance of the Companies Act or this Act.
(2) The court in making such an order may -
(a) in a case of an unlimited company, allow to the contributory by way of set-off any money due to him or the estate which he represents from the company on any independent dealing or contact with the company, but not any money due to him as a member of the company in respect of any dividend or profit, and
(b) in the case of a limited company, make to any director or manager whose liability is unlimited or to his estate the like allowance.
(3) In the case of any company, whether limited or unlimited, when all the creditors are paid in full (together with interest at the official rate), any money due on any account whatever to a contributory from the company may be allowed to him by way of set- off against any subsequent call.
151. Payment into bank of money due to company(1) The court may, at any time after making a winding-up order, and either before or after it has ascertained the sufficiency of the company's assets, make calls on all or any of the contributories for the time being settled on the list of the contributories to the extent of their liability, for payment of any money which the court considers necessary to satisfy the company's debts and liabilities, and the expenses of winding up, and for the adjustment of the rights of the contributories among themselves, and make an order for payment of any calls so made.
(2) In making a call the court may take into consideration the probability that some of the contributories may partly or wholly fail to pay it.
152. Order on contributory to be conclusive evidence(1) The court may order any contributory, purchaser or other person from whom money is due to the company to pay the amount due to the bank of England (or any branch of it) to the account of the liquidator instead of to the liquidator, and such an order may be enforced in the same manner as if it had directed payment to the liquidator.
(2) All money and securities paid or delivered in to Bank of England (or branch) in the event of a winding up by the court are subject in all respects to the orders of the court.
153. Power to exclude creditors not proving in time(1) An order made by the court on a contributory is conclusive evidence that the money (if any) thereby appearing to be due ordered to be paid is due, but subject to any right of appeal.
(2) All other pertinent matters stated in the order are to be taken as truly stated as against all persons and in all proceedings except proceedings in Scotland against the heritable estate of a deceased contributory and in that case the order is only prima facie evidence for the purpose of charging his heritable estate, unless his heirs or legatees of heritage were on the list of contributories at the time of the order being made.
154. Adjustment of rights of contributoriesThe court may fix a time or times within which creditors are to prove their debts or claims or to be excluded from the benefit of any distribution made before those debts are proved.
155. Inspection of books by creditors, etcThe court shall adjust the rights of the contributories among themselves and distribute any surplus among the persons entitled to it.
156. Payment of expenses of winding up(1) The court may, at any time after making a winding-up order, make such an order for inspection of the company's books and papers by the creditors and contributories as the court thinks just; and any books and papers in the company's possession may be inspected by creditors and contributories accordingly, but not further or otherwise.
(2) Nothing in this section excludes or restricts any statutory rights of government department or person acting under the authority of a government department.
157. Attendance at company meetings (Scotland)The court may, in the event of the assets being insufficient to satisfy the liabilities, make an order as to the payment out of the assets of the expenses incurred in the winding up in such order of priority as the court thinks just.
158. Power to arrest absconding contributoryIn the winding up by the court of a company registered in Scotland, the court has power to require the attendance of any officer of the company at any meeting of creditors or of contributories, or of a liquidation committee, for the purposes of giving information as to the trade, dealings, affairs or property of the company.
159. Powers of court to be cumulativeThe court, at any time either before or after making a winding up order, on proof of probable cause for believing that a contributory is about to quit the United Kingdom or otherwise to abscond or to remove or conceal any of his property for the purpose of evading payment of calls, may cause the contributory to be arrested and his books and papers moveable personal property to be seized and him and them to be kept safely until such time as the court may order.
160. Delegation of powers to liquidator (England and Wales)Powers conferred by this Act and the Companies Act on the court are in addition to, and not in restriction of, any existing powers of instituting proceedings against a contributory or debtor of the company, or the estate of any contributory or debtor, for the recovery of any call or other sums.
(1) Provisions may be made by rules for enabling or requiring all or any of the powers and duties conferred and imposed on the court in England and Wales by the Companies Act and this Act in respect of the following matters -
(a) the holding and conducting of meetings to ascertain the wishes of creditors and contributories,
(b) the settling of lists of contributories and the rectifying of the register of members where required, and the collection and application of the assets,
the payment, delivery, conveyance, surrender or transfer of money, property, books or papers to the liquidator,
(d) the making of calls,
(e) the fixing of a time within which debts and claims must be proved,
to be exercised or performed by the liquidator as an officer of the court, and subject to the court's control.
(2) But the liquidator shall not, without the special leave of the court rectify the register of members, and shall not make any call without either that special leave or the sanction of the liquidation committee.
Enforcement of, and appeal from orders 161. Orders for calls on contributories (Scotland)
162. Appeals from orders in Scotland(1) In Scotland, where an order, interlocutor or decree has been made for winding up a company by the court, it is competent to the court, on production by the liquidators of a list certified by them of the names of the contributories liable in payment of any calls, and of the amount due by each contributory, and of the date when that amount became due, to pronounce forthwith a decree against those contributories for payment of the sums so certified to be due, with interest from that date until payment (at 5 per cent. per annum) in the same way and to the same effect as if they had severally consented to registration for execution, on a charge of 6 days, of a legal obligation to pay those calls and interest.
(2) The decree may be extracted immediately, and no suspension of it is competent, except on caution or consignation, unless with special leave of the court.
(1) Subject to the provisions of this section and to rules of court, an appeal from any order or decision made or given in the winding- up of a company by the court in Scotland under this Act lies in the same manner and subject to the same conditions as an appeal from an order or decision of the court in cases within its ordinary jurisdiction.
(2) In regard to orders or judgments pronounced by the judge acting as vacation judge in pursuance of section 4 of the Administration of Justice (Scotland) Act 1933 -
(a) none of the orders specified in Part I of Schedule 3 to this Act are subject to review, reduction, suspension or stay of execution, and
(b) every other order or judge (except as mentioned below) may be submitted to review by the Inner House by reclaiming motion enrolled within 14 days from the date of the order or judgment.
(3) However, an order being one of those specified in Part II of that section shall, from the date of the order and notwithstanding that it has been submitted to review as above, be carried out and receive effect until the Inner House have disposed of the matter.
(4) In regard to orders or judgments pronounced in Scotland by a Lord Ordinary before whom proceedings in a winding up are being taken, any such order or judgment may be submitted to review by the Inner House by reclaiming motion enrolled within 14 days from its date; but should it not be so submitted to review during session, the provisions of this section in regard to orders or judgments pronounced by the judge acting as vacation judge apply.
(5) Nothing in this section affects provisions of the Companies Act or this Act in reference to decrees in Scotland for payment of calls in the winding up of companies, whether voluntary or by the court.
163. Style and title of liquidators164. Corrupt inducement affecting appointmentThe liquidator of a company shall be described -
(a) where a person other than the official receiver is liquidator, by the style of "the liquidator" of the particular company, or
(b) where the official receiver is liquidator, by the style of the "official receiver and liquidator" of the particular company;
and in either case shall he be described by an individual name.
A person who gives, or agrees or offers to give, to any member or creditor of a company any valuable consideration with a view to securing his own appointment or nomination, or to securing or preventing the appointment or nomination of some person other than himself, as the company's liquidator is liable to a fine.
Liquidator's powers and duties 165. Voluntary winding up
166. Creditors' voluntary winding up(1) This section has effect where a company is being wound up voluntarily, but subject to section 166 below in the case of creditors' voluntary winding up.
(2) The liquidator may -
(a) in the case of a members' voluntary winding up, with the sanction of an extraordinary resolution of the company, and
(b) in the case of a creditors' voluntary winding up, with the sanction of the court or the liquidation committee (or, if there is no such committee, a meeting of the company's creditors),
exercise any of the powers specified in Part I of Schedule 4 to this Act (payment of debts, compromise of claims, etc.).
(3) The liquidator may, without sanction, exercise either of the powers specified in Part II of that Schedule (institution and defence of proceedings; carrying on the business of the company) and any of the general powers specified in Part III of that Schedule.
(4) The liquidator may -
(a) exercise the court's power to settling a list of contributories (which list is prima facie evidence of the liability of the persons named in it to be contributories),
(b) exercise the court's power of making calls,
(c) summon general meetings of the company for the purpose of obtaining its sanction by special or extraordinary resolution or for any other purpose he may think fit.
(5) The liquidator shall pay the company's debts and adjust the rights of the contributories among themselves.
(6) Where the liquidator in exercise of the powers conferred on him by this Act disposes of the company to a person who is connected with the company (within the meeting of section 249 in Part VII), he shall, if there is for the time being a liquidation committee, give notice to the committee of that exercise of his powers.
167. Winding up by the court(1) This section applies where, in the case of a creditors' voluntary winding up, a liquidator has been nominated by the company.
(2) The powers conferred on the liquidator by section 165 shall not be exercised, except with the sanction of the court, during the period before the holding of the creditors' meeting under section 98 in Chapter IV.
(3) Subsection (2) does not apply in relation to the power of the liquidator -
(a) to take into his custody or under his control all the property to which the company is or appears to be entitled;
(b) to dispose of perishable goods and other goods the value of which is likely to diminish if they are not immediately disposed of; and
(c) to do all such other things as may be necessary for the protection of the company's assets.
(4) The liquidator shall attend the creditors' meeting held under section 98 and shall report to the meeting on any exercise by him of his powers (whether or not under this section or under section 112 or 165).
(5) if default is made -
(a) by the company in complying with subsection (1) or (2) of section 98, or
(b) by the directors in complying with subsection (1) or (2) of section 99,
the liquidator shall, within 7 days of the relevant day, apply to the court for directions as to the manner in which that default is to be remedied.
(6) "The relevant day" means the day on which the liquidator was nominated by the company or the day on which he first became aware of the default, whichever is the later.
(7) If the liquidator without reasonable excuse fails to comply with this section, he is liable to a fine.
168. Supplementary powers (England and Wales)(1) Where a company is being wound up by the court, the liquidator may -
(a) with the sanction of the court or the liquidation committee, exercise any of the powers specified in Parts I and II Schedule 4 ti this Act (payment of debts; compromise of claims, etc.; institution and defence of proceedings; carrying on of the business of the company), and
(b) with or without that sanction, exercise any of the general powers specified in Part III of that Schedule.
(2) Where the liquidator (not being the official receiver), in exercise of the powers conferred on him by this Act -
(a) disposes of any property of the company to a person who is connected with the company (within the meaning of section 249 in Part VII), or
(b) employs a solicitor to assist him in the carrying out of his functions,
he shall, if there is for the time being a liquidation committee, give notice to the committee of that exercise of his powers.
(3) The exercise by the liquidator in a winding up by the court of the powers conferred by this section is subject to the control of the court, and any creditor or contributory may apply to the court with respect to any exercise or proposed exercise of any of those powers.
(1) This section applies in the case of a company which is being wound up by the court in England and Wales.
(2) The liquidator may summon general meetings of the creditors or contributories for the purpose of ascertaining their wishes; and it is his duty to summon meetings at such times as the creditors or contributories by resolution (either at the meeting appointing the liquidator or otherwise) may direct, or whenever requested in writing to do so by one-tenth in value of the creditors or contributories (as the case may be).
(3) The liquidator may apply to the court (in the prescribed manner) for directions in relation to any particular matter arising in the winding up.
(4) Subject to the provisions of this Act, the liquidator shall use his own discretion in the management of the assets and their distribution among the creditors.
(5) If any person is aggrieved by an act or decision of the liquidator, that person may apply to the court; and the court may confirm, reverse or modify the act or decision complained of, and make such order in the case as it thinks just.
169. Supplementary powers (Scotland)170. Enforcement of liquidator's duty to make returns, etc.(1) In the case of a winding up in Scotland, the court may provide by order that the liquidator may, where there is no liquidation committee, exercise any of the following powers namely -
(a) to bring or defend any action or other legal proceedings in the name and on behalf of the company, or
(b) to carry on the business of the company so far as may be necessary for its beneficial winding up,
without the sanction or intervention of the court.
(2) In a winding up by Scotland, the liquidator has (subject to the rules) the same powers as a trustee on a bankrupt estate.
(1) If a liquidator who has made any default -
(a) in filing, delivering or making any return, account or other document, or
(b) in giving any notice which he is by law required to file, deliver, make or give,
fails to make good the default within 14 days after the service on him of a notice requiring him to do so, the court has the following powers.
(2) On an application made by any creditor or contributory of the company, or by the registrar of companies, the court may make an order directing the liquidator to make good the default within such time as may be specified in the order.
(3) The court's order may provide that all costs of and incidental to the application shall be borne by the liquidator.
(4) Nothing in this section prejudices the operation of any enactment imposing penalties on a liquidator in respect of any such default as is mentioned above.
Removal; vacation of office 171. Removal, etc. (voluntary winding up)
172. Removal, etc. (winding up by the court)(1) This section applies with respect to the removal from office and vacation of office of the liquidator of a company which is being wound up voluntarily.
(2) Subject to the next subsection, the liquidator may be removed from office only by an order of the court or -
(a) in the case of a members' voluntary winding up, by a general meeting of the company summoned specially for that purpose, or
(b) in the case of a creditors' voluntary winding up, by a general meeting of the company's creditors summoned specially for that purpose in accordance with the rules.
(3) Where the liquidator was appointed by the court under section 108 in Chapter V, a meeting such as is mentioned in subsection (2) above shall be summoned for the purpose of replacing him only if he thinks fit or the court so directs or the meeting is requested, in accordance with the rules -
(a) in the case of a members' voluntary winding up, by members 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, or
(b) in the case of a creditors' voluntary winding up, by not less than one-half, in value, of the company's creditors.
(4) A liquidator shall vacate office if he ceases to be a person who is qualified to act as an insolvency practitioner in relation to the company.
(5) A liquidator may, in the prescribed circumstances, resign his office by giving notice of his resignation to the registrar of companies.
(6) Where -
(a) in the case of a members' voluntary winding up, a final meeting of the company has been held under section 94 in Chapter III, or
(b) in the case of a creditors' voluntary winding up, final meetings of the company and of the creditors have been held under section 106 in Chapter IV,
the liquidator whose report was considered at the meeting or meetings shall vacate office as soon as he has complied with subsection (3) of that section and has given notice to the registrar of companies that the meeting or meetings have been held and of the decisions (if any) of the meeting or meetings.
(1) This section applies with respect to the removal from office and vacation of office of the liquidator of a company which is being wound up by the court, or of a provisional liquidator.
(2) Subject as follows, the liquidator may be removed from office only by an order of the court or by a general meeting of the company's creditors summoned specially for that purpose in accordance with the rules; and a provisional liquidator may be removed from office only by an order of the court.
(3) Where -
(a) the official receiver is liquidator otherwise than in succession under section 136(3) to a person who held office as a result of a nomination by a meeting of the company's creditors or contributories, or
(b) the liquidator was appointed by the court otherwise than under section 139(4)(a) or 140(1), or was appointed by the Secretary of State,
a general meeting of the company's creditors shall be summoned for the purpose of replacing him only if he thinks fit, or the court co directs, or the meeting is requested, in accordance with the rules, by not less than one-quarter, in value, of the creditors.
(4) If appointed by the Secretary of State, the liquidator may be removed from office by a direction of the Secretary of State.
(5) A liquidator or provisional liquidator, not being the official receiver, shall vacate office if he ceases to be a person who is qualified to act as an insolvency practitioner in relation to the company.
(6) A liquidator may, in the prescribed circumstances, resign his office by giving notice of his resignation to the court.
(7) Where an order is made under section 204 (early dissolution in Scotland) for the dissolution of the company, the liquidator shall vacate office when the dissolution of the company takes effect in accordance with that section.
(8) Where a final meeting has been held under section 146 (liquidator's report on completion of winding up), the liquidator whose report was considered at the meeting shall vacate office as soon as he has given notice to the court and the registrar of companies that the meeting has been held and of the decisions (if any) of the meeting.
Release of liquidator 173. Release (voluntary winding up)
174. Release (winding up by the court)(1) This section applies with respect to the release of the liquidator of a company which is being wound up voluntarily.
(2) A person who has ceased to be a liquidator shall have his release with effect from the following time, that is to say -
(a) in the case of a person who has been removed from office by a general meeting of the company or by a general meeting of the company's creditors that has not resolved against his release or who has died, the time at which notice is given to the registrar of companies in accordance with the rules that that person has ceased to hold office;
(b) in the case of a person who has been removed from office by a general meeting of the company's creditors that has resolved against his release, or by the court, or who has vacated office under section 171(4) above, such time as the Secretary of State may, on the application of that person, determine;
(c) in the case of a person who has resigned, such time as may be prescribed;
(d) in the case of a person who has vacated office under subsection (6)(a) of section 171, the time at which he vacated office;
(e) in the case of a person who has vacated office under subsection (6)(b) of that section -
(i) if the final meeting of the creditors referred to in that subsection has resolved against that person's release, such time as the Secretary of State may, on an application by that person, determine, and
(ii) if that meeting has not resolved against that person's release, the time at which he vacated office.
(3) In the application of subsection (2) to the winding up of a company registered in Scotland, the references to a determination by the Secretary of State as to the time from which a person who has ceased to be liquidator shall have his release are to be read as references to such a determination by the Accountant of Court.
(4) Where a liquidator has his release under subsection (2), he is, with effect from the time specified in that subsection, discharged from all liability both in respect of acts or omissions of his in the winding up and otherwise in relation to his conduct as liquidator.
But nothing in this section prevents the exercise, in relation to a person who has had release under subsection (2), of the court's powers under section 212 of this Act (summary remedy against delinquent directors, liquidators, etc.).
(1) This section applies with respect to the release of the liquidator of a company which is being wound up by the court, or of a provisional liquidator.
(2) Where the official receiver has ceased to be liquidator and a person becomes liquidator in his stead, the official receiver has his release with effect from the following time, that is to say -
(a) in a case where that person was nominated by a general meeting of creditors or contributories, or was appointed by the Secretary of State, the time at which the official receiver gives notice to the court that he has been replaced;
(b) in a case where that person is appointed by the court, such time as the court may determine.
(3) If the official receiver while he is liquidator gives notice to the Secretary of State that the winding up is for practical purposes complete, he has his release with effect from such time as the Secretary of State may determine.
(4) A person other than the official receiver who has ceased to be liquidator has his release with effect from the following time, that is to say -
(a) in the case of a person who has been removed from office by a general meeting of creditors that has not resolved against his release or who has died, the time at which notice is given to the court in accordance with the rules that that person has ceased to hold office;
(b) in the case of a person who has been removed from office by a general meeting of creditors that has resolved against his release, or by the court or the Secretary of State, or who has vacated office under section 172(5) or (7), such time as the Secretary of State may, on an application by that person, determine;
(c) in the case of a person who has resigned, such time as may be prescribed;
(d) in the case of a person who has vacated office under section 172(8) -
(i) if the final meeting referred to in that subsection has resolved against that person's release, such time as the Secretary of State may, on an application by that person, determine, and
(ii) if that meeting has not so resolved, the time at which that person vacated office.
(5) A person who has ceased to hold office as a provisional liquidator has his release with effect from such time as the court may, on an application by him, determine.
(6) Where the official receiver or a liquidator or provisional liquidator has his release under this section, he is, with effect from the time specified in the preceding provisions of this section, discharged from all liability both in respect of acts or omissions of his in the winding up and otherwise in relation to his conduct as liquidator or provisional liquidator.
But nothing in this section prevents the exercise, in relation to a person who has had release under this section, of the court's powers under section 212 (summary remedy against delinquent directors, liquidators, etc.).
(7) In the application of this section to a case where the order for winding up has been made by the court in Scotland, the references to a determination by the Secretary of State as to the time from which a person who has ceased to be liquidator has his release are to such a determination by the Accountant of Court.
Preferential debts 175. Preferential debts (general provision)
176. Preferential charge of goods distrained(1) In a winding up the company's preferential debts (within the meaning given by section 386 in Part XII) shall be paid in priority to all other debts.
(2) Preferential debts -
(a) rank equally among themselves after the expenses of the winding up and shall be paid in full, unless the assets are insufficient to meet them, in which case they abate in equal proportions; and
(b) so far as the assets of the company available for payment of general creditors are insufficient to meet them, have priority over the claims of holders of debentures secured by, or holders of, any floating charge created by the company, and shall be paid accordingly out of any property comprised in or subject to that change.
(1) This section applies where a company is being wound up by the court in England and Wales, and is without prejudice to section 128 (avoidance of attachments, etc.).
(2) Where any person (whether or not a landlord or person entitled to rent) has distrained upon the goods or effects of the company in the period of 3 months ending with the date of the winding-up order, those goods or effects, or the proceeds of their sale, shall be charged for the benefit of the company with the preferential debts of the company to the extent that the company's property is for the time being sufficient for meeting them.
(3) Where by virtue of a charge under subsection (2) any person surrenders any goods or effects to a company or makes a payment to a company, that person ranks, in respect of the amount of the proceeds of sale of those goods or effects by the liquidator or (as the case may be) the amount of the payment, as a preferential creditor of the company, except as against so much of the company's property as is available for the payment of preferential creditors by virtue of the surrender or payment.
Special managers 177. Power to appoint special manager
(1) Where a company has gone into liquidation or a provisional liquidator has been appointed, the court may, on an application under this section, appoint any person to be the special manager of the business or property of the company.
(2) The application may be made by the liquidator or provisional liquidator in any case where it appears to him that the nature of the business or property of the company, or the interests of the company's creditors or contributories or members generally, require the appointment of another person to manage the company's business or property.
(3) The special manager has such powers as may be entrusted to him by the court.
(4) The court's power to entrust powers to the special manager includes power to direct that any provision of this Act that has effect in relation to the provisional liquidator or liquidator of a company shall have the like effect in relation to the special manager for the purposes of the carrying out by him of the functions of the provisional liquidator or liquidator.
(5) The special manager shall -
(a) give such security or, in Scotland caution as may be prescribed;
(b) prepare and keep such accounts as may be prescribed;
produce those accounts in accordance with the rules to the Secretary of State or to such other persons as may be prescribed.
Disclaimer (England and Wales) 178. Power to disclaim onerous property
179. Disclaimer of leaseholds(1) This and the next two sections apply to a company power that is being wound up in England and Wales.
(2) Subject as follows, the liquidator may, by the giving of the prescribed notice, disclaim any onerous property and may do so notwithstanding that he has taken possession of it, endeavoured to sell it, or otherwise exercised rights of ownership in relation to it.
(3) The following is onerous property for the purposes of this section -
(a) any unprofitable contract, and
(b) any other property of the company which is unsaleable or not readily saleable or is such that it may give rise to a liability to pay money or perform any other onerous act.
(4) A disclaimer under this section -
(a) operates so as to determine, as from the date of the disclaimer, the rights, interests and liabilities of the company in or in respect of the property disclaimed;
(b) does not, except so far as is necessary for the purpose of releasing the company from any liability, affect the rights or liabilities of any other person.
(5) A notice of disclaimer shall not be given under this section in respect of any property if -
(a) a person interested in the property has applied in writing to the liquidator or one of his predecessors as liquidator requiring the liquidator or that predecessor to decide whether he will disclaim or not, and
(b) the period of 28 days beginning with the day on which that application was made, or such longer period as the court may allow, has expired without a notice of disclaimer having been given under this section in respect of that property.
(6) Any person sustaining loss or damage in consequence of the operation of a disclaimer under this section is deemed a creditor of the company to the extent of the loss or damage and accordingly may prove for the loss or damage in the winding up.
180. Land subject to rentcharge(1) The disclaimer under section 178 of any property of a leasehold nature does not take effect unless a copy of the disclaimer has been served (so far as the liquidator is aware of their addresses) on every person claiming under the company as underlessee or mortgaged and either -
(a) no application under section 181 below is made with respect to that property before the end of the period of 14 days beginning with the day on which the last notice served under this subsection was served; or
(b) where such an application has been made, the court directs that the disclaimer shall take effect.
(2) Where the court gives direction under subsection (1)(b) it may also, instead of or in addition to any order it makes under section 181, make such orders with respect to fixtures, tenant's improvements and other matters arising out of the lease as it thinks fit.
181. Powers of court (general)(1) The following applies where, in consequence of the disclaimer under section 178 of any land subject to a rentcharge, that land vests by operation of law in the Crown or any other person (referred to in the next subsection as "the proprietor").
(2) The Proprietor and the successors in title of the proprietor are not subject to any personal liability in respect of any sums becoming due under the rentcharge except sums becoming due after the proprietor, or some person claiming under or through the proprietor, has taken possession or control of the land or has entered into occupation of it.
182. Powers of court (leaseholds)(1) This section and the next apply where the liquidator has disclaimed property under section 178.
(2) An application under this section may be made to the court by -
(a) any person who claims an interest in the disclaimed property, or
(b) any person who is under any liability in respect of the disclaimed property, not being a liability discharged by the disclaimer.
(3) Subject as follows, the court may on the application make an order, on such terms as it thinks fit, for the vesting of the disclaimed property in, or for its delivery to -
(a) a person entitled to it or a trustee for such a person, or
(b) a person subject to such a liability as is mentioned in sub- section (2)(b) or a trustee for such a person.
(4) The court shall not make an order under subsection (3)(b) except where it appears to the court that it would be just to do so for the purpose of compensating the person subject to the liability in respect of the disclaimer.
(5) The effect of any order under this section shall be taken into account in assessing for the purpose of section 178(6) the extent of any loss or damage sustained by any person in consequence of the disclaimer.
(6) An order under this section vesting property in any person need not be completed by conveyance, assignment or transfer.
(1) The court shall not make an order under section 181 vesting property of a leasehold nature in any person claiming under the company as underlessee or mortgage except on terms making that person -
(a) subject to the same liabilities and obligations as the company was subject to under the lease at the commencement of the winding up, or
(b) if the court thinks fit, subject to the same liabilities and obligations as that person would be subject to if the lease had been assigned to him at the commencement of the winding up.
(2) For the purposes of an order under section 181 relating to only part of any property comprised in a lease, the requirements of sub- section (1) apply as if the lease comprised only the property to which the order relates.
(3) Where subsection (1) applies and no person claiming under the company as underlessee or mortgage is willing to accept an order under section 181 on the terms required by virtue of that sub- section, the court may, by order under that section, vest the company's estate or interest in the property in any person who is liable (whether personally or in a representative capacity, and whether alone or jointly with the company) to perform the lessee's covenants in the lease.
The court may vest that estate and interest in such a person freed and discharged from all estates, incumbrances and interests created by the company.
(4) Where subsection (1) applies and a person claiming under the company as underlessee or mortgage declines to accept an order under section 181, that person is excluded from all interest in the property.
Execution, attachment and the Scottish equivalents 183. Effect of execution or attachment (England and Wales)
184. Duties of sheriff (England and Wales)(1) Where a creditor has issued execution against the goods or land of a company or has attached any debt due to it, and the company is subsequently wound up, he is not entitled to retain the benefit of the execution or attachment against the liquidator unless he has completed the execution or attachment before the commencement of the winding up.
(2) However -
(a) if a creditor has had notice of a meeting having been called at which a resolution for voluntary winding up is to be proposed, the date on which he had notice is substituted, for the purpose of sub- section (1), for the date of commencement of the winding up;
(b) a person who purchases in good faith under a sale by the sheriff any goods of a company on which execution has been levied in all cases acquires a good title to them against the liquidator; and
(c) the rights conferred by subsection (1) on the liquidator may be set aside by the court in favour of the creditor to such extent and subject to such terms as the court thinks fit.
(3) For purposes of this Act -
(a) an execution against the goods is completed by seizure and sale, or by the making of a charging order under section 1 of the Charging Orders Act 1979;
(b) an attachment of a debt is completed by receipt of the debt; and
(c) an execution against land is completed by seizure, by the appointment of a receiver, or by the making of a charging order under section 1 of the Act above mentioned.
(4) In this section "goods" includes all chattels personal; and "the sheriff" includes any officer charged with the execution of a writ or other process.
(5) This section does not apply in the case of a winding up in Scotland.
185. Effect of diligence (Scotland)(1) The following applies where a company's goods are taken in execution and, before their sale or the completion of the execution (by the receipt or recovery of the full amount of the levy), notice is served on the sheriff that a provisional liquidator has been appointed or that a winding-up order has been made, or that a resolution for voluntary winding up has been passed.
(2) The sheriff shall, on being so required, deliver the goods and any money seized or received in part satisfaction of the execution to the liquidator; but the costs of execution are a first charge on the goods or money so delivered, and the liquidator may sell the goods, or a sufficient part of them, for the purpose of satisfying the charge.
(3) If under an execution in respect of a judgment for a sum exceeding œ250 a company's goods are sold or money is paid in order to avoid sale, the sheriff shall deduct the costs of the execution from the proceeds of sale or the money paid and retain the balance for 14 days.
(4) If within that time notice is served on the sheriff of a petition for the winding up of the company having been presented, or of a meeting having been called at which there is to be proposed a resolution for voluntary winding up, and an order is made or a resolution passed (as the case may be), the sheriff shall pay the balance to the liquidator, who is entitled to retain it as against the execution creditor.
(5) The rights conferred by this section on the liquidator may be set aside by the court in favour of the creditor to such extent and subject to such terms as the court thinks fit.
(6) In this section "goods" includes all chattels personal; and "the sheriff" includes any officer charged with the execution of a writ or other process.
(7) The money sum for the time being specified in subsection (3) is subject to increase or reduction by order under section 416 in Part XV.
(8) This section does not apply in the case of a winding up in Scotland.
(1) In the winding up of a company registered in Scotland, the following provisions of the Bankruptcy (Scotland) Act 1985 -
(a) subsections (1) to (6) of section 37 (effect of sequestration on diligence); and
(b) subsections (3), (4), (7) and (8) of section 39 (realisation of estate),
apply, so far as consistent with this Act, in like manner as they apply in the sequestration of a debtor's estate, with the substitutions specified below and with any other necessary modifications.
(2) The substitutions to be made in those sections of the Act of 1985 are as follows -
(a) for references to the debtor, substitute references to the company;
(b) for references to the sequestration, substitute references to the winding up;
(c) for references to the date of sequestration, substitute references to the commencement of the winding up of the company; and
(d) for references to the permanent trustee, substitute references to the liquidator.
(3) In this section, "the commencement of the winding up of the company" means, where it is being wound up by the court, the day on which the winding-up order is made.
(4) This section, so far as relating to any estate or effects of the company situated in Scotland, applies in the case of a company registered in England and Wales as in the case of one registered in Scotland.
Miscellaneous matters 186. Rescission of contracts by the court
187. Power to make over assets to employees(1) The court may, on the application of a person who is, against the liquidator, entitled to the benefit or subject to the burden of a contract made with the company, make an order rescinding the contract on such terms as to payment by or to either party of damages for the non-performance of the contract, or otherwise as the court thinks just.
(2) Any damages payable under the order to such a person may be proved by him as a debt in the winding up.
(1) On the winding up of a company (whether by the court or voluntarily), the liquidator may, subject to the following provisions of this section, make any payment which the company has, before the commencement of the winding up, decided to make under section 719 of the Companies Act (power tp provide for employees or former employees on cessation or transfer of business).
(2) The power which a company may exercise by virtue only of that section may be exercised by the liquidator after the winding up has commenced if, after the company's liabilities have been fully satisfied and provision has been made for the expenses of the winding up, the exercise of that power has been sanctioned by such a resolution of the company as would be required of the company itself by section 719(3) before that commencement, if paragraph (b) of that subsection were omitted and any other requirement applicable to its exercise by the company had been met.
(3) Any payment which may be made by a company under this section (that is, a payment after the commencement of its winding up) may be made out of the company's assets which are available to the members on the winding up.
(4) On a winding up by the court, the exercise by the liquidator of his powers under this section is subject to the court's control, and any creditor or contributory may apply to the court with respect to any exercise or proposed exercise of the power.
(5) Subsections (1) and (2) above have effect notwithstanding anything in any rule of law or in section 107 of this Act (property of company after satisfaction of liabilities to be distributed among members).
188. Notification that company is in liquidation189. Interest on debts(1) When a company is being wound up, whether by the court or voluntarily, every invoice, order for goods or business letter issued by or on behalf of the company, or a liquidator of the company, or a receiver or manager of the company's property, being a document on or in which the name of the company appears, shall contain a statement that the company is being wound up.
(2) if default is made in complying with this section, the company and any wilfully authorises or permits the default, namely, any liquidator of the company, any liquidator of the company and any receiver or manager, is liable to a fine.
190. Documents exempt from stamp duty(1) In a winding up interest is payable in accordance with this section on any debt proved in the winding up, including so much of any debt as represents interest on the remainder.
(2) Any surplus remaining after the payment of the debts proved in the winding up shall, before being applied for any other purpose, be applied in paying interest on those debts in respect of the periods during which they have been outstanding since the company went into liquidation.
(3) All interest under this section ranks equally, whether or not the debts on which it is payable rank equally.
(4) The rate of interest payable under this section in respect of any debt ("the official rate" for the purposes of any provision of this Act in which that expression is used) is whichever is the greater of -
(a) the rate specified in section 17 of the Judgments Act 1838 on the day on which the company went into liquidation, and
(b) the rate applicable to that debt apart from the winding up.
(5) In the application of this section to Scotland -
(a) references to a debt proved in a winding up have effect as references to a claim accepted in a winding up, and
(b) the references to section 17 of the Judgments Act 1838 has effect as a reference to the rules.
191. Company's books to be evidence(1) In the case of a winding up by the court, or of a creditors' voluntary winding up, the following has effect as regards exemption from duties chargeable under the enactments relating to stamp duties.
(2) If the company is registered in England and Wales, the following documents are exempt from stamp duty -
(a) every assurance relating solely to freehold or leasehold property, or to any estate, right or interest in, any real or personal property, which forms part of the company's assets and which, after the execution of the assurance, either at law in equity, is or remains part of those assets, and
(b) every writ, order, certificate, or other instrument or writing relating solely to the property of any company which is being wound up as mentioned in subsection (1), or to any proceeding under such a winding up.
"Assurance" here includes deed, conveyance, assignment and surrender.
(3) If the company is registered in Scotland, the following documents are exempt from stamp duty -
(a) every conveyance relating solely to property which forms part of the company's assets and which, after the execution of the conveyance, is or remains the company's property for the benefit of its creditors.
(b) any articles of roup or sale, submission and every other instrument and writing whatsoever relating solely to the company's property, and
every deed or writing forming part of the proceedings in the winding up.
"Conveyance" here includes assignation, instrument, discharge, writing and deed.
192. Information as to pending liquidationsWhere a company is being wound up, all books and papers of the company and of the liquidators are, as between the contributories of the company, prima facie evidence of the truth of all matters purporting to be recorded in them.
193. Unclaimed dividends (Scotland)(1) If the winding up of a company is not concluded within one year after its commencement, the liquidator shall, at such intervals as may be prescribed, until the winding up is concluded, send to the registrar of companies a statement in the prescribed form and containing the prescribed particulars with respect to the proceedings in, and position of, the liquidation.
(2) If a liquidator fails to comply with this section, he is liable to a fine and, for continued contravention, to a daily default fine.
194. Resolution passed at adjourned meetings(1) The following applies where a company registered in Scotland has been wound up, and is about to be dissolved.
(2) The liquidator shall lodge in an appropriate bank or institution as defined in section 73(1) of the Bankruptcy (Scotland) Act 1985 (not being a bank or institution in or of which the liquidator is acting partner, manager, agent or cashier) in the name of the Accountant of Court the whole unclaimed dividends and unapplied or undistributable balances, and the deposit receipts shall be transmitted to the Accountant of Court.
(3) The provisions of section 58 of the Bankruptcy (Scotland) Act 1985 (so fare as consistent with this Act and the Companies Act) apply with any necessary modifications to sums lodged in a bank or institution under this section as they apply to sums deposited under section 57 of the Act first mentioned.
195. Meetings to ascertain wishes of creditors or contributoriesWhere a resolution is passed at an adjourned meeting of a company's creditors or contributories, the resolution is treated for all purposes as having been passed on the date on which it was in fact passed, and not as having been passed on any earlier date.
196. Judicial notice of court documents(1) The court may -
(a) as to all matters relating to the winding up of a company, have regard to the wishes of the creditors or contributories (as proved to it by any sufficient evidence), and
(b) if it thinks fit for the purpose of ascertaining those wishes, direct meetings of the creditors or contributories to be called, held and conducted in such manner as the court directs, and appoint a person to act as chairman of any such meetings and report the result of it to the court.
(2) In the case of creditors, regard shall be had to the value of each creditors' debt.
(3) in the case of contributories, regard shall be had to the number of votes conferred on each contributory by the Companies Act or the articles.
197. Commission for receiving evidenceIn all proceedings under this part, all courts, judges and persons judicially acting, and all officers, judicial or ministerial, of any court, or employed in enforcing the process of any court shall take judicial notice -
(a) of the signature of any officer of the High Court or of a county court in England and Wales, or of the Court of Session or a sheriff court in Scotland, or of the High Court in Northern Ireland, and also
(b) of the official seal or stamp of the several offices of the High Court in England and Wales or Northern Ireland, or of the Court of Session, appended to or impressed on any document made, issued or signed under the provisions of this Act or the Companies Act, or any official copy of such a document.
198. Court order for examination of persons in Scotland(1) When a company is wound up in England and Wales or in Scotland, the court may refer the whole or any part of the examination of witnesses -
(a) to a specified county court in England and Wales, or
(b) to the sheriff principal for a specified sheriffdom in Scotland, or
to the High Court in Northern Ireland or a specified Northern Ireland County Court,
("Specified" means specified in the order of the winding-up court).
(2) Any person exercising jurisdiction as a judge of the court to which the reference is made (or, in Scotland, the sheriff principal to whom it is made) shall then, by virtue of this section, be a commissioner for the purposes of taking the evidence of those witnesses.
(3) The judge or sheriff principal has in the matter referred the same power of summoning and examining witnesses, of requiring the production and delivery of documents, of punishing defaults by witnesses, and of allowing costs and expenses to witnesses, as the court which made the winding-up order.
These powers are in addition to any which the judge or sheriff principal might lawfully exercise apart from this section.
(4) The examination so taken shall be returned or reported to the court which made the order in such manner as that court requests.
(5) This section extends to Northern Ireland.
199. Costs of application for leave to proceed (Scottish companies)(1) The court may direct the examination in Scotland of any person for the time being in Scotland (whether a contributory of the company or not), in regard to the trade, dealings affairs or property of any company in course of being wound up, or of any person being a contributory of the company, so far as the company may be interested by reason of his being a contributory.
(2) The order or commission to take the examination shall be directed to the sheriff principal of the sheriffdom in which the person to be examined is residing or happens to be for the time; and the sheriff principal shall summon the person to appear before him at a time and place specified in the summons for examination on oath as a witness or as a haver, and to produce any books or papers called for which are in his possession or power.
(3) The sheriff principal may take the examination either orally or on written interrogatories, and shall report the same in writing in the usual form to the court, and shall transmit with the report the books and papers produced, if the originals are required and specified by the order or commission, or otherwise copies or extracts authenticated by the sheriff.
(4) If a person so summoned fails to appear at the time and place specified, or refuses to be examined or to make the production required, the sheriff principal shall proceed against him as a witness or haver duly cited; and failing to appear or refusing to give evidence or make production may be proceeded against by the law of Scotland.
(5) The sheriff principal is entitled to such fees, and the witness is entitled to such allowances, as sheriffs principal when acting as commissioners under appointment from the Court of Session and as witnesses and havers are entitled to in the like cases according to the law and practice of Scotland.
(6) If any obligation is stated to the sheriff principal by the witness, either on the ground of his incompetency as a witness, or as to the production required, or on any other ground, the sheriff principal may, if he thinks fit, report the objection to the court, and suspend the examination of the witness until it has been disposed of by the court.
200. Affidavits etc, in the United Kingdom and overseasWhere a petition or application for leave to proceed with an action or proceeding against a company which is being wound up in Scotland is unopposed and is granted by the court, the costs of the petition or application shall, unless the court otherwise directs, be added to the amount of the petitioner's or applicant's claim against the company.
(1) An affidavit required to be sworn under or for the purposes of this Part may be sworn in the United Kingdom, or elsewhere in Her Majesty's dominions, before any court, judge or person lawfully authorised to take and receive affidavits, or before any of Her Majesty's consuls or vice-consuls in any place outside Her dominions.
(2) All courts, judges, justices, commissioners and persons acting judicially shall take judicial notice of the seal or stamp or signature (as the case may be) of any such court, judge, person, consul or vice-consul attached, appended or subscribed to any such affidavit, or to any other document to be used for the purposes of this Part.
201. Dissolution (voluntary winding up)202. Early dissolution (England and Wales)(1) This section applies, in the case of a company wound up voluntarily, where the liquidator has sent to the registrar of companies his final account and return under section 94 (members' voluntary) or section 106 (creditors' voluntary).
(2) The registrar on receiving the account and return shall forth- with register them; and on the expiration of 3 months from the registration of the return the company is deemed to be dissolved.
(3) However, the court may, on the application of the liquidator or any other person who appears to the court to be interested, make an order deferring the date at which the dissolution of the company is to take effect for such time as the court thinks fit.
(4) It is the duty of the person whose application an order of the court under this section is made within 7 days after the making of the order to deliver to the registrar an office copy of the order for registration; and if that person fails to do so he is liable to a fine and, for continued contravention, to a daily default fine.
203. Consequence of notice under Section 202(1) This section applies where an order for the winding up of a company has been made by the court in England and Wales.
(2) The official receiver, if -
(a) he is liquidator of the company, and
(b) it appears to him -
(i) that the realisable assets of the company are insufficient to cover the expenses of the winding up, and
(ii) that the affairs of the company do not require any further investigation,
may at any time apply to the registrar of companies for the early dissolution of the company.
(3) Before making that application, the official receiver shall give not less than 28 days' notice of his intention to do so to the company's creditors and contributories and, if there is an administrative receiver of the company, to that receiver.
(4) With the giving of that notice the official receiver ceases (subject to any directions under the next subsection) to be required to perform any duties imposed on him in relation to the company, its creditors or contributories by virtue of any provision of this Act, apart from a duty to make an application under subsection (2) of this section.
(5) On the receipt of the official receiver's application under sub- section (2) the registrar shall forthwith register it, and, at the end of the period of 3 months beginning with the day of the registration of the application, the company shall be dissolved.
However, the Secretary of State may, on the application of the official receiver or any other person who appears to the Secretary of State to be interested, give directions under section 203 at any time before the end of that period.
204. Early dissolution (Scotland)(1) Where a notice has been given under section 202(3), the official receiver or any creditor or contributory of the company, or the administrative receiver of the company )if there is one) may apply to the Secretary of State for directions under this section.
(2) The grounds on which that application may be made are -
(a) that the realisable assets of the company are sufficient to cover the expenses of the winding up;
(b) that the affairs of the company do require further investigation; or
that for any other reason the early dissolution of the company is inappropriate.
(3) Directions under this section -
(a) are directions making such provisions as the Secretary of State thinks fit for enabling the winding up of the company to proceed as if no notice had been given under section 202(3), and
(b) may, in the case of an application under section 202(5), include a direction deferring the date at which the dissolution of the company is to take effect for such period as the Secretary of State thinks fit.
(4) An appeal to the court lies from any direction of the Secretary of State on an application for directions under this section.
(5) It is the duty of the person on whose application any directions are given under this section, or in whose favour an appeal with respect to an application for such directions is determined, with 7 days after the giving of the directions or the determination of the appeal, to deliver to the appeal, to deliver to the registrar of companies for registration such a copy of the directions or determination as is prescribed.
(6) If a person without reasonable excuse fails to deliver a copy as required by subsection (5), he is liable to a fine and, for continued contravention, to a daily default fine.
205. Dissolution otherwise than under Sections 202-204(1) This section applies where a winding-up order has been made by the court in Scotland.
(2) If after a meeting or meetings under section 138 (appointment of liquidator in Scotland) it appears to the liquidator that the realisable assets of the company are insufficient to cover the expenses of the winding up, he may apply to the court for an order that the company be dissolved.
(3) Where the liquidator makes that application, if the court is satisfied that the realisable assets of the company are insufficient to cover the expenses of the winding up and it appears to the court appropriate to do so, the court shall make an order that the company be dissolved in accordance with this section.
(4) A copy of the order shall within 14 days from its date be forwarded by the liquidator to the registrar of companies, who shall forthwith register it; and, at the end of the period of 3 months beginning with the day of the registration of the order, the company shall be dissolved.
(5) The court may, on an application by any person who appears to the court to have an interest, order that the date at which the dissolution of the company is to take effect shall be deferred for such period as the court thinks fit.
(6) It is the duty of the person on whose application an order is made under subsection (5), within 7 days after the making of the order, to deliver to the registrar of companies such a copy of the order as is prescribed.
(7) If the liquidator without reasonable excuse fails to comply with the requirements of subsection (4), he is liable to a fine and, for continued contravention, to a daily default fine.
(8) If a person without reasonable excuse fails to deliver a copy as required by subsection (6), he is liable to a fine and, for continued contravention, to a daily default fine.
(1) This section applies where the registrar of companies receives -
(a) a notice served for the purposes of section 172(8) (final meeting of creditors and vacation of office by liquidator), or
(b) a notice from the official receiver that the winding up of a company by the court is complete.
(2) The registrar shall, on receipt of the notice, forthwith register it; and, subject as follows, at the end of the period of 3 months beginning with the day of the registration of the notice, the company shall be dissolved.
(3) The Secretary of State may, on the application of the official receiver or any other person who appears to the Secretary of State to be interested, give a direction deferring the date at which the dissolution of the company is to take effect for such period as the Secretary of State thinks fit.
(4) An appeal to the court lies from any decision of the Secretary of State on an application for a direction under subsection (3).
(5) Subsection (3) does not apply in a case where the winding-up order was made by the court in Scotland, but in such a case the court may, on an application by any person appearing to the court to have an interest, order that the date at which the dissolution of the company is to take effect shall be deferred for such period as the court thinks fit.
(6) It is the duty of the person -
(a) on whose application a direction is given under subsection (3);
(b) in whose favour an appeal with respect to an application for such a direction is determined; or
whose application an order is made under subsection (5),
within 7 days after the giving of the direction, the determination of the appeal or the making of the order, to deliver to the registrar for registration such a copy of the direction, determination or order as is prescribed.
(7) If a person without reasonable excuse fails to deliver a copy as required by subsection (6), he is liable to a fine and, for continued contravention, to a daily default fine.
206. Fraud, etc. in anticipation of winding up207. Transactions in fraud of creditors(1) When a company is ordered to be wound up by the court, or passses a resolution for voluntary winding up, any person, being a past or present officer of the company, is deemed to have committed an offence if, within the 12 months immediately preceding the commencement of the winding up, he has -
(a) concealed any part of the company's property to the value of £120 or more, or concealed any debt due to or from the company, or
(b) fraudulently removed any part of the company's property to the value of £120 or more, or
(c) concealed, destroyed, mutilated or falsified any book or paper affectinf or relating to the company's property or affairs, or
(d) made any false entry in any book or paper affecting or relating to the company's property or affairs, or
(e) fraudulently parted with, altered or made any omission in any document affecting or relating to the company's property or affairs, or
(f) pawned, pledged or disposed of any property of the company which has been obtained on credit and has not been paid for (unless the pawning, pledging or disposal was in the ordinary way of the company's business).
(2) Such a person is deemed to have committed an offence if within the period above mentioned he has been privy to the doing by others of any of the things mentioned in paragraphs (c), (d) and (e) of subsection (1); and he commits an offence if, at any time after the commencement of the winding up, he does any of the things mentioned in paragraphs (a) to (f) of that subsection, or is privy to the doing by others of any of the things mentioned in paragraphs (c) to (e) of it.
(3) For purposes of this section, "officer" includes a shadow director.
(4) It is a defence -
(a) for a person charged under paragraph (a) or (f) subsection (1) (or under subsection (2) in respect of the things mentioned in either of those two paragraphs) to prove that he has no intent to defraud, and
(b) for a person charged under paragraph (c) to (d) of subsection (1) (or under subsection (2) in respect of the things mentioned in either of those paragraphs) to prove that he had no intent to conceal the state of affairs of the company or to defeat the law.
(5) Where a person pawns, pledges or disposes of any property in circumstances which amount to an offence under subsection (1)(f), every person who takes in pawn or pledge, or otherwise receives, the property knowing it to be pawned, pledged or disposed of in such circumstances, is guilty of an offence.
(6) A person guilty of an offence under this section is liable to imprisonment or a fine, or both.
(7) The money sums specified in paragraphs (a) and (b) of subsection (1) are subject to increase or reduction by order under section 416 in Part XV.
208. Misconduct in course of winding up(1) When a company is ordered to be wound up by the court or passes a resolution for voluntary winding up, a person is deemed to have committed an offence if he, being at the time an officer of the company -
(a) has made or caused to be made any gift or transfer of, or charge on, or has caused or connived at the levying of any execution against, the company's property, or
(b) has concealed or removed any part of the company's property since, or within 2 months before, the date of any unsatisfied judgment or order for the payment of money obtained against the company.
(2) A person is not guilty of an offence under this section -
(a) by reason of conduct constituting an offence under subsection (1)(a) which occurred more than 5 years before the commencement of the winding up, or
(b) if he proves that, at the time of the conduct constituting the offence, he had no intent to defraud the company's creditors.
(3) A person guilty of an offence under this section is liable to imprisonment or a fine, or both.
209. Falsification of company's books(1) When a company is being wound up, whether by the court voluntarily, any person, being a past or present officer of the company, commits an offence if he -
(a) does not to the best of his knowledge and belief fully and truly discover to the liquidator all the company's property, and how and to whom and for what consideration and when the company disposed of any part of that property (except such part as has been disposed of in the ordinary way of the company's business), or
(b) does not deliver up to the liquidator (or as he directs) all such part of the company's property as is in his custody or under his control, and which he is required by law to deliver up, or
(c) does not deliver up to the liquidator (or as he directs) all books and papers in his custody or under his control belonging to the company and which he is required by law to deliver up, or
(d) Knowing or beliveing that a false debt has been proved by any person in the winding up, fails to inform the liquidator as soon as practicable, or
(e) after the commencement of the winding up, prevents the production of any book or paper affecting or relating to the company;s property or affairs.
(2) Such a person commits an offence if after the commencement of the winding up he attempts to account for any part of the company's property by fictitious losses or expenses; and he is deemed to have committed that offence if he has so attempted at any meeting of the company's creditors within the 12 months immediately preceding the commencement of the winding up.
(3) For the purposes of this section, "officer" includes a shadow director.
(4) It is a defence -
(a) for a person charged under paragraph (a), (b) or (c) of sub- section (1) to prove that he had no intent to defraud, and
(b) for a person charged under paragraph (e) of that subsection to prove that he has no intent to conceal the state of affairs of the company or to defeat the law.
(5) A person guilty of an offence under this section is liable to imprisonment or a fine, or both.
210. Material omissions from statement relating to company's affairs(1) When a company is being wound up, an officer or contributory of the company commits an offence if he destroys, mutilates, alters or falsifies any books, papers or securities, or makes or is privy to the making of any false or fraudulent entry in any register, book of account or document belonging to the company with intent to defraud or decieve any person.
(2) A person guilty of an offence under this section is liable to imprisonment or a fine, or both.
211. False representations to creditors(1) When a company is being wound up, whether by the court or voluntarily, any person, being a past or present officer of the company, commits an offence if he makes any material omission in any statement relating to the company's affairs.
(2) When a company has been ordered to be wound up by the court, or has passed a resolution for voluntary winding up, any such person is deemed to have committed that offence if, prior to the winding up, he has made any material omission in any such statement.
(3) For the purposes of this section, "officer" includes shadow director.
(4) It is a defence for a person charged under this section to prove that he had no intent to defraud.
(5) A person guilty of an offence under this section is liable to imprisonment or a fine, or both.
(1) When a company is being wound up, whether by the court or voluntarily, any person, being a past or present officer of the company -
(a) commits an offence if he makes any false representations or comitts any other fraud for the purpose of obtaining the consent of the company's creditors or any of them to an agreement with reference to the company's affairs or to the winding up, and
(b) is deemed to have committed that offence if, prior to the winding up, he has made any false representation, or committed any other fraud, for that purpose.
(2) For the purpose of this section, "officer" includes shadow director.
(3) A person guilty of an offence under this section is liable to imprisonment or a fine, or both.
Penalisation of directors and officers 212. Summary remedy against delinquent directors, liquidators, etc.
213. Fraudulent trading(1) This section applies if in the course of the winding up of a company it appears that a person who -
(a) is or has been an officer of the company,
(b) has acted as liquidator, administrator or administrative receiver of the company, or
(c) not being a person falling within paragraph (a) or (b), is or has been concerned, or has taken part, in the promotion, formation or management of the company,
has misapplied or retained, or become accountable for, any money or other property of the company, or been guilty of any misfeasance or breach of any fiduciary or other duty in relation to the company.
(2) The reference in subsection (1) to any misfeasance or breach of any fiduciary or other duty in relation to the company includes, in the case of a person who has acted as liquidator or administrator of the company, any misfeasance or breach of any fiduciary or other duty in connection with the carrying out of his functions as liquidator or administrator of the company.
(3) The court may, on the application of the official receiver or the liquidator, or of any creditor or contributory, examine into the conduct of the person falling within subsection (1) and compel him -
(a) to repay, restore or account for the money or property or any part of it, with interest as such rate as the court thinks just, or
(b) to contribute such sum to the company's assets by way of compensation in respect of the misfeasance or breach of fiduciary or other duty as the court thinks just.
(4) The power to make an application under subsection (3) in relation to a person who has acted as liquidator or administrator of the company is not exercisable, except with the leave of the court, after that person has had his release.
(5) The power of a contributory to make an application under subsection (3) is not exercisable except with the leave of the court, but is exercisable notwithstanding that he will not benefit from any order the court may make on the application.
(1) If in the course of the winding up of a company it appears that any business of the company has been carried on with intent to defraud creditors of the company or creditors of any other person, or for any fraudulent purpose, the following has effect.
(2) The court, on the application of the liquidator may declare that any persons who were knowingly parties to the carrying on of the business in the manner above-mentioned are to be liable to make such contributions (if any) to the company's assets as the court thinks proper.
214. Wrongful trading215. Proceedings under sections 213, 214(1) Subject to subsection (3) below, if in the course of the winding up of a company it appears that subsection (2) of this section applies in relation to a person who is or has been a director of the company, the court, on the application of the liquidator, may declare that that person is to be liable to make such contribution (if any) to the company's assets as the court thinks proper.
(2) This subsection applies in relation to a person if -
(a) the company has gone into insolvent liquidation,
(b) at some time before the commencement of the winding up of the company, that person knew or ought to have concluded that there was no reasonable prospect that the company would avoid gping into insolvent liquidation, and
(c) that person was a director of the company at that time; but the court shall not make a declaration under this section in any case where the time mentioned in paragraph (b) above was before 28th April 1986.
(3) The court shall not make a declaration under this section with respect to any person if it is satisfied that after the condition specified in subsection (2)(b) was first satisfied in relation to him that person took every step with a view to minimising the potential loss to the company's creditors as (assuming him to have known that there was no reasonable prospect that the company would avoid going into insolvent liquidation) he ought to have taken.
(4) For the purposes of subsection (2) and (3), the facts which a director of a company ought to know or ascertain, the conclusions which he ought to reach and the steps which he ought to take are those which would be known or ascertained, or reached or taken, by a reasonably diligent person having both -
(a) the general knowledge, skill and experience that may reasonably be expected of a person carrying out the same functions as are carried out by that director in relation to the company, and
(b) the general knowledge, skill and experience that that director has.
(5) The reference in subsection (4) to the functions carried out in relation to a company by a director of the company includes any functions which he does not carry out but which have been entrusted to him.
(6) For the purposes of this section a company goes into insolvent liquidation if it goes into liquidation at a time when its assets are insufficient for the payment of its debts and other liabilities and the expenses of the winding up.
(7) In this section "director" includes a shadow director.
(8) This section is without prejudice to section 213.
216. Restriction on re-use of company names(1) On the hearing of an application under section 213 or 214, the liquidator may himself give evidence or call witnesses.
(2) Where under either section the court makes a declaration, it may give such further directions as it thinks proper for the giving effect to the declaratio; and in particular, the court may -
(a) provide for the liability for any person under the declaration to be a charge on any debt or obligation due from the company to him, or on any mortgage or charge or any interest in a mortgage or charge on assets of the company held by or vested in him, or any person on his behalf, or any person claiming as assignee from or through the person liable or ny person acting on his behalf, and
(b) from time to time make such further order as may be necessary for enforcing any charge imposed under this subsection.
(3) For the purposes of subsection (2), "assignee" -
(a) includes a person to whom or in whose favour, by the directions of the person made liable, the debt, obligation, mortgage or charge was created, issued or transferred or the interest created, but
(b) does not include an assignee for valuable considerarion (not including consideration by way of marriage) given in good faith and without notice of any of the matters on the ground of which the declaration is made.
(4) Where the court makes a declaration under either section in relation to a person who is a creditor of the company, it may direct that the whole or any part of any debt owed by the company to that person and any interest thereon shall rank in priority after all other debts owed by the company and after any interest on those debts.
(5) Sections 213 and 214 have effect notwithstanding that the person concerned may be criminally liable in respect of matters on the ground of which declaration under the section is to be made.
217. Personal liability for debts, following contravention of section 216(1) This section applies to a person where a company ("the liquidating company") has gone into insolvent liquidationon or after the appointed day and he was a director or shadow director of the company at any time in the period of 12 months ending with the day before it went into liquidation.
(2) For the purposes of this section, a name is a prohibited name in relation ro such a person if -
(a) it is a nmae by which the liquidating company was known at any time in that period of 12 months, or
(b) it is a name which is so similar to a name falling within paragraph (a) as to suggest an association with that company.
(3) Except with leave of the court or in such circumstances as may be prescribed, a person to whom this section applies shall not at any time in the period of 5 years beginning with the day on which the liquidating company went into liquidation -
(a) be a director of any other company that is known by a prohibited name, or
(b) in any way, whether directly or indirectly, be concerned or take part in the promotion, formation or management of any such company, or
(c) in any way, whether directly or indirectly, be concerned or take part in the carrying on of the business carried on (otherwise than by a company) under a prohibited name.
(4) If a person acts in contravention of this section, he is liable to imprisonment or a fine, or both.
(5) In subsection (3) "the court" means any court having jurisdiction to wind up companies; and on an application for leave under that subsection, the Secretary of State or the official receiver may appear and call the attention of the court to any matters which seem to him to be relevant.
(6) References in this section, in relation to any time, to a name by which a company is known are to the name of the company at that time or to any name under which the company carries on business at that time.
(7) For the purposes of this section a company goes into insolvent liquidation if it goes into liquidation at a time when its assets are insufficient for the payment of its debts and other liabilities and the expenses of the winding up.
(8) In this section "company" includes a company which may be wound up under Part V of this Act.
(1) A person is personally responsible for all the relevant debts of a company if at any time -
(a) in contravention of section 216, he is involved in the manage- ment of the company, or
(b) as a person who is involved in the management of the company, he acts or is willing to act on instructions given (wihtout the leave of the court) by a person whom he knows at that time to be in contravention in relation to the company of section 216.
(2) Where a person is personally responsible under this section for the relevant debts of a company, he is jointly and severally liable in respect of those debts with the company and any other person who, whether under this section or otherwise, is so liable.
(3) For the purposes of this section the relevant debts of a company are -
(a) in relation to a person who is personally responsible under paragraph (a) of subsection (1), such debts and other liabilities of the company as are incurred at a time when that person was involved in the management of the company, and
(b) in relation to a person who is persoannly responsible under paragraph (b) of that subsection, such debts and other liabilities of the company as are incurred at a time when that person was acting or was willing to act on the instructions given as mentioned in that paragraph.
(4) For the purposes of this sectioon, a person involved in the management of a company if he is a director of the company or if he is concerned, whether directly or indirectly, or takes part, in the management of the company.
(5) For the purposes of this section a person who, as a person involved in the management of a company, has at any time acted on instructions given (without the leave of the court) by a person whom he knew at that time to be in contravention in relation to the company of section 216 is presumed, unless the contrary is shown, to have been willing at any time thereafter to act on any instructions given by that person.
(6) In this section "company" includes a company which may be wound up under Part V.
Investigation and prosecution of malpractice 218. Prosecution of delinquent officers and members of company
219. Obligations arising under section 218(1) If it appears to the court in the course of a winding up by the court that any past or present officer, or any member, of the company has been guilty of any offence in relation to the company for which he is criminally liable, the court may (either on the application of a person interested in the winding up or of its own motion) direct the liquidator to refer the matter to the prosecuting authority.
(2) "The prosecuting authority" means -
(a) in the case of a windin gup in England and Wales, the Director of Public Prosecutions, and
(b) in the case of a winding up in Scotland, the Lord Advocate.
(3) If in the case of a winding up by the court in England and Wales it appears to the liquidator, not being the official receiver, that any past or present officer of the company, or any member of it, has been guilty of an offence in relation to the company for which he is criminally liable, the liquidator shall report the matter to the official receiver.
(4) If it appears to the liquidator in the course of a voluntary winding up that any past or present officer of the company, or any member of it, has been guilty if an offence in relation to the company for which he is criminally liable, he shall -
(a) forthwith report the matter to the prosecuting authority, and
(b) furnish to that authority such information and give to him such access to and facilities for inspecting and taking copies of documents (being information or documents in the possession or under the control of the liquidator and relating to the matter in question) as the authority requires.
(5) Where a report is made to him under subsection (4), the prosecuting authority may, if he thinsk fit, refer the matter to the Secretary of State for further enquiry; and the Secretary of State -
(a) shall thereupon investigate the matter, and
(b) for the purposes of his investigation may exercise any of the powers which are exercisable by inspectors appointed under section 431 or 432 of the Companies Act to investigate a company's affairs.
(6) It appears to the cout in the course of voluntary winding up that -
(a) any past or present officer of the company, or any member of it, has been guilty as above-mentioned, and
(b) no report with respect to the matter has been made by the liquidator to the prosecuting authority under subsection (4),
the court may on (an application of any person interested in the winding up or of its own motion) direct the liquidator to make such a report.
On a report being made accordingly, this section has effect as though the report had been made in pursuance of subsection (4).
(1) For the purposes of an investigation by the Secretary of State under section 218(5), any obligation imposed on a person ny any provision of the Companies Act to produce documents or give information to, or otherwise to assist, inspectors appointed as mentioned in that subsection is to be regarded as an obligation similarly to assist the Secretary of State in his investigation.
(2) An answer given by a person to a question put to him in exercise of the powers conferred by section 218(5) may be used in evidence against him.
(3) Where criminal proceedings are instituted by the prosecuting authority or the Secretary of State following any report or reference under section 218, it is the duty of the liquidator and every officer and agent of the company past and present (other than the defendant or defender) to give to that authority or the Secretary of State (as the case may be) all assistance in connection with the prosecution which he is reasonably able to give.
For this purpose "agent" includes any banker or solicitor of the company and any person employed by the company as auditor, whether that person is or is not an officer of the company.
(4) If a person fails or neglects to give assistance in the manner required by subsection (3), the court may, on the application of the prosecuting authority or the Secretary of State (as the case may be) direct the person to comply with that subsection; and if the application is made with respect to a liquidator, the court may, (unless it appears that the failure or neglect to comply was due to the liquidator not having in his hands sufficient assets of the company to enable him to do so) direct that the costs shall be borne by the liquidator personally.
220. Meaning of "unregistered company"221. Winding up of unregistered companies(1) For the purposes of this Part, the expression "unregistered company" includes any trustee savings bank certified under the enactments relating to such banks, any association and any company, with he following exceptions -
(a) a railway company incorporated by Act of Parliament,
(b) a company registered in any part of the United Kingdom under the Joint Stock Companies Acts or under the legislation (past or present) relating to companies in Great Britain.
(2) On such day as the Treasury appoints by order under section 4(3) of the Trustee Savings Banks Act 1985, the words in subsection (1) from "any trustee" to "banks" cease to have effect and are hereby repealed.
222. Inability to pay debts: unpaid creditor for £750 or more(1) Subject to the provisions of this Part, any unregistered company may be wound up under this Act; and all the provisions of this Act and the Companies Act about winding up to apply to an unregistered company with the exceptions and additions mentioned in the following subsections.
(2) If an unregistered company has a principal place of business situated in Northern Ireland, it shall not be wound up under this Part unless it has a principal place of business situated in England and Wales or Scotland, or both England and Wales and Scotland.
(3) For the purpose of determining a court's winding-up jurisdiction, an unregistered company is deemed -
(a) to be registered in England and Wales or Scotland, according as its principal place of business is situated in England and Wales or Scotland, or
(b) if it has a principal place of business situated in both countries, to be registered in both countries;
and the principal place of business situated in that part of Great Britain in which proceedings are being institutes is, for all purposes of the winding up, deemed to ne the registered office of the company.
(4) No unregistered company shall be wound up under this Act voluntarily.
(5) The circumstances in which an unregistered company may be wound up are as follows -
(a) if the company is dissolved, or has ceased to carry on business, or is carrying on business only for the purpose of winding up its affairs;
(b) if the company is unable to pay its debts;
if the court is of the opinion it is just and equitable that the company should be wound up.
(6) A petition for the winding up a trustee savings bank may be presented by the Trustee Savings Banks Central Board or by a commissioner appointed under section 35 of the Trustee Savings Banks Act 1981 as well as by any person authorised under part IV of this Act to present a petition for the winding up of a company.
On such day as the Treasury appoints by order under section 4(3) of the Trustee Savings Banks Act 1985, this subsection ceases to have effect and is hereby repealed.
(7) In Scotland, an unregistered company which the Court of Session has jurisdiction to wind up may be wound up by the court if there is subsisting a floating charge over property comprised in the company's property and undertaking, and the court is satisfied that the security of the creditor entitled to the benefit of the floating charge is in jeopardy.
For this purpose a creditor's security is deemed to be in jeopardy if the court is satisfied that events have occurred or are about to occur which render it unreasonable in the creditor's interests that the company should retain power to dispose of the property which is subject to the floating charge.
(1) An unregistered company is deemed (for the purposes of section 221) unable to pay its debts if there is a creditor, by assignment or otherwise, to whom the company is indebted in a sum exceeding £750 then due and -223. Inability to pay debts: debt remaining unsatisfied after action brought(a) the creditor has served on the company, by leaving at its principal place of business, or by delivering to the secretary or some director, manager or principal officer of the company, or by otherwise serving in such manner as the court may approve direct, a written demand in the prescribed form requiring the company to pay the sum due, and
(b) the company has 3 weeks after the service of the demand neglected to pay the sum or to secure or compound for it to the creditor's satisfaction.
(2) The money sum for the time being in subsection (1) is subject to increase or reduction by regulations under section 417 in Part XV; but no increase in the sum so specified affects any case which the winding-up petition was presented before coming into force of the increase.
An unregistered company is deemed (for the purposes of section 221) unable to pay its debts if an action or other proceeding has been instituted against any member for any debt or demand due, or claimed to be due, from the company, or from him in his character of member, and -224. Inability to pay debts: other cases(a) notice in writing of the institution of the action or proceeding has been served on the company by leaving it at the company's principal place of business ( or by delivering it to the secretary, or some director, manager or principal officer of the company, or by otherwise serving it in such manner as the court may approve or direct), and
(b) the company has not within 3 weeks after service of the notice paid, secured or compounded for the debt or demand, or procured the action or proceeding to be stayed or sisted, or indemnified or defender to his reasonable satisfaction against the action or proceeding, and against all costs, damages and expenses to be incurred by him because of it.
(1) An unregistered company is deemed (for purposes of section 221) unable to pay its debts -225. Overseas company may be wound up though dissolved(a) if in England and Wales execution or other process issued on a judgement, decree or order obtained in any court in favour of a creditor against the company, or any member of it as such, or any person authorised to be sued as nominal defendant on behalf of the company, is returned unsatisfied;
(b) if in Scotland the induciae of a charge for payment on an extract registered bond, or an extract registered protest, have expired without payment being made;
if in Northern Ireland a certificate of unenforceability has been granted in respect of any judment, decree or order obtained as mentioned in paragraph (a);
(d) if it is otherwise proved to the satisfaction of the court that the company is unable to pay its debts as they fall due.
(2) An unregistered company is also deemed unable to pay its debts if it is proved to the satisfaction of the court that the value of the company's assets is less than the amount of its liabilities, taking into account its contingent and prospective liabilities.
Where a company incorporated outside Great Britain which has been carrying on business in Great Britain ceases to carry on business in Great Britain, it may be wound up as an unregistered company under this Act, notwithstanding that it has been dissolved or otherwise ceased to exist as a company under or by virtue of the laws of the country under which it was incorporated.226. Contributories in winding up of unregistered company(1) In the event of an unregistered company being wound up, every person is deemed a contributory who is liable to pay or contribute to the payment of any debt or liability of the company, or to pay or contribute to the payment of any sum for the adjustment of the rights of members among themselves, or to pay or contribute to the payment of the expenses of winding up the company.227. Power of court to stay, sist or restrain proceedings(2) Every contributory is liable to contribute to the company's assets all sums due from him in respect of any such liability as is mentioned above.
(3) In the case of an unregistered company engaged in or formed for working mines within the stannaries, a past member is not liable to contribute to the assets if he has ceased to be a member for 2 years or more either before the mine ceased to be worked or before the date of the winding-up order.
(4) In the event of the death, bankruptcy or insolvency of any contributory, the provisions of this Act with respect to the personal representatives, to the heirs and legatees of heritage of the heritable estate in Scotland of deceased contributories, and to the trustees of bankrupt or insolvent contributories, respectively apply.
The provisions of this Part with respect to staying, sisting or restraining actions and proceedings against a company at any time after the presentation of a petition for winding up and before the making of a winding-up order extend, in the case of an unregistered company, where the application to stay, sist or restrain is presented by a creditor, to actions and proceedings against any contributory of the company.228. Actions stayed on winding-up orderWhere an order has been made for winding up an unregistered company, no action or proceeding shall be proceeded with or commenced against any contributory of the company in respect of any debt of the company, except by leave of the court, subject to such terms as the court may impose.229. Provisions of this Part to be cumulative(1) The provisions of this Part with respect to unregistered companies are in addition to and not in restriction of any provisions in Part IV with respect to winding up companies by the court; and the court or liquidator may exercise any powers or do any act in the case of unregistered companies which might be exercised or done by it or him in winding up companies formed and registered under the Companies Act.(2) However, an unregistered company is not, except in the event of it being wound up, deemed to be a company under the Companies Act, and then only to the extent provided by this Part of this Act.
230. Holders of office to be qualified insolvency practitioners Office-holders
(1) Where an administration order is made in relation to a company, the administrator must be a person who is qualified to act as an insolvency practitioner in relation to the company.231. Appointment to office of two or more persons(2) Where an administrative receiver of a company is appointed, he must be a person who is so qualified.
(3) Where a company goes into liquidation, the liquidator must be a person who is so qualified.
(4) Where a provisional liquidator is appointed, he must be a person who is so qualified.
(5) Subsections (3) and (4) are without prejudice to any enactment under which the official receiver is to be, or may be, liquidator.
(1) This section applies if an appointment or nomination of any person to the office of administrator, administrative receiver, liquidator or provisional liquidator -232. Validity of office-holder's acts(a) relates to more than one person, or
(b) has the effect that the office is to be held by more than one person.
(2) The appointment or nomination shall declare whether any act required or authorised under any enactment to be done by the administrator, administrative receiver, liquidator or provisional liquidator is to be done by all or any one or more of the persons for the time being holding office in question.
The acts of an individual as administrator, administrative receiver, liquidator or provisional liquidator of a company are valid notwithstanding any defect in his appointment, nomination or qualifications.233. Supplies of gas, water, electricity, etc. Management by administrators, liquidators, etc.
(1) This section applies in the case of a company where -234. Getting in the company's property(a) an administration order is made in relation to the company, or
(b) an administrative receiver is appointed, or
(c) a voluntary arrangement under Part I, approved by meetings summoned under section 3, has taken effect, or
(d) the company goes into liquidation, or
(e) a provisional liquidator is appointed;
and "the office-holder" means the administrator, the administrative receiver, the supervisor of the voluntary arrangement, the liquidator, as the case may be.
(2) If a request is made by or with the concurrence of the office- holder for the giving, after the effective date, of any of the supplies mentioned in the next subsection, the supplier -
(a) may make it a condition of the giving of the supply that the office-holder personally guarantees the payment of any charges in respect of the supply, but
(b) shall not make in a condition of the giving of the supply, or do anything which has the effect of making it a condition of the giving of the supply, that any outstanding charges in respect of a supply given to the company before the effective date are paid.
(3) The supplies referred to in subsection (2) are -
(a) a public supply of gas,
(b) a supply of electricity by an Electricity Board,
(c) a supply of water by statutory water undertakers or, in Scotland, a water authority,
(d) a supply of telecommunication services by a public telecommunications operator.
(4) "The effective date" for the purposes of this section is whichever is applicable of the following dates -
(a) the date on which the administration order was made,
(b) the date on which the administrative receiver was appointed (or, if he was appointed in succession to another administrative receiver, the date on which the first of his predecessors was appointed),
(c) the date on which the voluntary arrangement was approved by the meetings summoned under section 3,
(d) the date on which the company went into liquidation,
(e) the date on which the provisional liquidator was appointed.
(5) The following applies to expressions used in subsection (3) -
(a) "public supply of gas" means a supply of gas by the British Gas Corporation or a public gas supplier within the meaning of Part I of the Gas Act 1986,
(b) "Electricity Board" means the same as in the Energy Act 1983,
(c) "water authority" means the same as in the Water (Scotland) Act 1980, and
(d) "telecommunication services" and "public telecommunications operator" mean the same as in the Telecommunications Act 1984, except that the former does not include services consisting in the conveyance of programmes included in cable programme services (within the meaning of the Cable and Broadcasting Act 1984).
(1) This section applies on the case of a where -235. Duty to co-operate with office-holder(a) an administration order is made in relation to the company, or
(b) an administrative receiver is appointed, or
(c) the company goes into liquidation, or
(d) a provisional liquidator is appointed;
and "the office-holder" means the administrator, the administrative receiver, the liquidator or the provisional liquidator, as the case may be.
(2) Where any person has in his possession or control any property, books, papers or records to which the company appears to be entitled, the court may require that person forthwith (or within such period as the court may direct) to pay, deliver, convey, surrender or transfer the property, books, papers or records to the office-holder.
(3) Where the office-holder -
(a) seizes or disposes of any property which is not property of the company, and
(b) at the time of seizure or disposal believes, and has reasonable grounds for believing, that he is entitled (whether in pursuance of an order of the court or otherwise) to seize or dispose of that property,
the next subsection has effect.
(4) In that case the office-holder -
(a) is not liable to any person in respect of any loss or damage resulting from the seizure or disposal except in so far as that loss or damage is caused by the office-holder's own negligence, and
(b) has a lien on the property, or the proceeds of its sale, for such expenses as were incurred in connection with the seizure or disposal.
(1) This section applies as does section 234; and it also applies, in the case of a company in respect of which a winding-up order has been made by the court in England and Wales, as if references to the office-holder included the official receiver, whether or not he is the liquidator.236. Inquiry into company's dealings, etc.(2) Each of the persons mentioned in the next subsection shall -
(a) give to the office-holder such information concerning the company and its promotion, information, business, dealings, affairs or property as the office-holder may at any time after the effective date reasonably require, and
(b) attend on the office-holder at such times after as the latter may reasonably require.
(3) The persons referred to above are -
(a) those who are or have at any time been officers of the company,
(b) those who have taken part in the formation of the company at any time within one year before the effective date,
(c) those who are in the employment of the company, or have been in its employment (including employment under a contract for services) within that year, and are in the office-holder's opinion of giving information which he requires,
(d) those who are, or have within that year been, officers of, or in the employment (including employment under a contract for services) of, another company which is, or within that year was, an officer of that company is question, and
(e) in the case of a company being wound up by the court, any person who has acted as administrator, administrative receiver, or liquidator of the company.
(4) For the purposes of subsections (2) and (3), "the effective date" is whichever is applicable of the following dates -
(a) the date on which the administration order was made,
(b) the date on which the administrative receiver was appointed or, if he was appointed in succession to another administrative receiver, the date on which the first of his predecessors was appointed,
(c) the date on which the provisional liquidator was appointed, and
(d) the date on which the company went into liquidation.
(5) If a person without reasonable excuse fails to comply with any obligation imposed by this section, he is liable to a fine and, for continued contravention, to a daily default fine.
(1) This section applies as does section 234; and also applies in the case of a company in respect of which a winding-up order has been made by the court in England and Wales as if references to the office-holder included the official receiver, whether or not he is the liquidator.237. Court's enforcement powers under S.236(2) The court may, on the application of the office-holder, summon to appear before it -
(a) any officer of the company,
(b) any person known or suspected to have in his possession any property of the company or supposed to be indebted to the company, or
(c) any person whom the court thinks capable of giving information concerning the promotion, formation, business, dealing, affairs or property of the company.
(3) The court may require any such person as is mentioned in subsection (2)(a) to to submit an affidavit to the court containing an account of his dealings with the company or to produce any books, papers or other records in his possession or under his control relating to the company or the matters mentioned in paragraph (c) of the subsection.
(4) The following applies in a case where -
(a) a person without reasonable excuse fails to appear before the court when he is summoned to do so under this section, or
(b) there are reasonable grounds for believing that a person has absconded, or is about to abscond, with a view to avoiding his appearance before the court under this section.
(5) The court may, for the purpose of bringing that person and anything in his possession before the court, cause a warrant to be issued to a constable or prescribed officer of the court -
(a) for the arrest of that person, and
(b) for the seizure of any books, papers, records, money or goods in that person's possession.
(6) The court may authorise a person arrested under such a warrant to be kept in custody, and anything seized under such a warrant to be held, in accordance with the rules, until that person is brought before the court under the warrant or until such other times as the court may order.
(1) If it appears to the court, on consideration of any evidence obtained under section 236 or this section, that any person has in his possession any property of the company, the court may, on the application of the office-holder, order that person to deliver the whole or any part of the property to the office-holder at such time, in such manner and on such terms as the court thinks fit.(2) If it appears to the court, on consideration of any evidence so obtained, that any person is indebted to the company, the court may, on the application of the office-holder, order that person to pay to the office-holder, at such time and in such manner as the court may direct, the whole or any part of the amount due, whether in full discharge of the debt or otherwise, as the court thinks fit.
(3) The court may, if it thinks fit, order that any person who if within the jurisdiction of the court would be liable to be summoned to appear before it under section 236 or this section shall be examined in any part of the United Kingdom where he may for the time being be, or in a place outside the United Kingdom.
(4) Any person who appears or is brought before the court under section 236 or this section may be examined on oath, either orally or (except in Scotland) by interrogatories, concerning the company or the matters mentioned in section 236(2)(c).
238. Transactions at an undervalue (England and Wales) Adjustment of prior transactions (administration and liquidation)
239. Preferences (England and Wales)(1) This section applies in the case of a company where -
(a) an administration order is made in relation to the company, or
(b) the company goes into liquidation;
and "the office-holder" means the administrator or the liquidator, as the case may be.
(2) Where the company has at a relevant time (defined in section 240) entered into a transaction with any person at an undervalue, the office-holder may apply to the court for an order under this section.
(3) Subject as follows, the court shall, on such an application, make such order as it thinks fit for restoring the position to what it would have been if the company had not entered into that transaction.
(4) For the purposes of this section and section 241, a company enters into a transaction with a person at an undervalue if -
(a) the company makes a gift to that person or otherwise enters into a transaction with that person on terms that provide for the company to receive no consideration, or
(b) the company enters into a transaction with that person for a consideration the value of which, in money or money's worth, is significantly less than the value, in money or money's worth, of the consideration provided by the company.
(5) The court shall not make an order under this section in respect of a transaction at an undervalue if it is satisfied -
(a) that the company which entered into the transaction did so in good faith and for the purpose of carrying on its business, and
(b) that at the time it did so there were reasonable grounds for believing that the transactions would benefit the company.
240. "Relevant time" under Section 238 and 239(1) This section applies as does section 238.
(2) Where the company has at a relevant time (defined in the next section) given a preference to any person, the office-holder may apply to the court for an order under this section.
(3) Subject as follows, the court shall, on such an application, make such order as it thinks fit for restoring the position to what it would have been if the company had not given that preference.
(4) For the purposes of this section and section 241, a company gives a preference to a person if -
(a) that person is one of the company's creditors or a surety or guatantor for any of the company's debts or other liabilities, and
(b) the company does anything or suffers anything to be done which (in either case) has the effect of putting that person into that position which, in the event of the company going into insolvent liquidation, will be better than the position he would have been in if that thing had not been done.
(5) The court shall not make an order under this section in respect of a preference given to any person unless the company which gave the preference was influenced in deciding to give it by a desire to produce in relation to that person the effect mentioned in sub- section (4)(b).
(6) A company which has given a preference to a person connected with the company (otherwise than by reason only of being its employee) at the time the preference was given is presumed, unless the contrary shown, to have been influenced in deciding to give it by such a desire as is mentioned in subsection (5).
(7) The fact that something has been done in pursuance of the order of a court does not, without more, prevent the doing or suffering of that thing from constituting the giving of a preference.
241. Orders under Sections 238 and 239(1) Subject to the next subsection, the time at which a company enters into a transaction at an undervalue or gives a preference is a relevant time if the transaction is entered into, or the preference given -
(a) in the case of a transaction at an undervalue or of a prefernce which is given to a person who is connected with the company (otherwise than by reason only of being its employee), at a time in the period of 2 years ending with the onset of insolvency (which expression is defined below),
(b) in the case of a preference which is not such a transaction and is not given, at a time in the period of 6 months ending with the onset of insolvency, and
(c) in either case, at a time between the presentation of a petition for the making of an administration order in relation to the company and the making of such an order on that petition.
(2) Where a company enters into a transaction at an undervalue or gives a preference at a time mentioned in subsection (1)(a) or (b), that time is not a relevant time for the purposes of section 238 or 239 unless the company -
(a) is at the time unable to pay its debts within the meaning of section 123 in Chapter VI or Part IV, or
(b) becomes unable to p ay its debts within the meaning of that section in consequence of the transaction or preference;
but the requirements of this subsection are presumed to be satisfied, unless the contrary is shown, in relation to any transaction at an undervalue which is entered into by a company with a person who is concerned with the company.
(3) For the purposes of subsection (1), the onset of insolvency is -
(a) in a case where section 238 or 239 applies by reason of the making of an administration order or of a company going into liquidation immediately upon the discharge of an administration order, the date of the presentation of the petition on which the administration order was made, and
(b) in a case where the section applies by reason of a company going into liquidation at any other time, the date of the commencement of the winding up.
242. Gratuitous alienations (Scotland)(1) Without prejudice to the generality of sections 238(3) and 239(3), an order under either of those sections with respect to a transaction or prefernce entered into or given by a company may (subject to the next subsection) -
(a) require any property transferred as part of the transaction, or in connection with the giving of the prference, to be vested in the company,
(b) require any property to be so vested if it represents in any person's hands the application either of the proceeds of sale of property so transferred or of money so transferred,
(c) release or discharge (in whole or in part) any security given by the company,
(d) require any person to pay, in respect of benefits received by him from the company, such sums to the office-holder as the court may direct,
(e) provide for any surety or guarantor whose obligations to any person were released or discharged (in whole or in part) under the transaction, or by the giving of the preference, to be under such new or revived obligations to that person as the court thinks appropriate,
(f) provide for security to be provided for the discharge of any obligation imposed by or arising under the order, for such an obligation to be charged on any property and for the security or charge to have the same priority as a security or charge released or discharged (in whole or in part) under the transaction or by the giving of the preference, and
(g) provide for the extent to which any person whose property is vested by the order in the company, or on whom obligations are imposed by the order, is to be able to prove in the winding up of the company for debts or other liabilities which arose from, or were released or discharged (in whole or part) under or by, the transaction or the giving of the preference.
(2) An order under section 238 or 239 may affect the property of, or impose any obligation on, any person whether or not he is the person with whom the company in question entered into the transaction or (as the case may be) the person to whom the preference was given; but such an order -
(a) shall not prejudice any interest in property which was acquired from a person other than the company and was acquired in good faith, for value and without notice of the relevant circumstances, or prejudice any interest deriving from such an interest, and
(b) shall require a person who received a benefit from the transaction or preference in good faith, for value and without notice of the relevant circumstances to pay a sum to the office- holder, except where that person was a party to the transaction or the payment is to be in respect of a preference given to that person at a time when he was a creditor of the company.
(3) For the purposes of this section the relevant circumstances, in relation to a transaction or preference, are -
(a) the circumstances by virtue of which an order under section 238 or (as the case may be) 239 could be made in respect of the transaction or preference if the company were to go into liquidation, or an administration order were made in relation to the company, within a particular period after the transaction is entered into or the preference given, and
(b) if that period has expired, the fact that the company has gone into liquidation or that such an order has been made.
(4) The provisions of sections 238 to 241 apply without prejudice to the availability of any other remedy, even in relation to a transaction or preference which the company had no power to enter into or give.
243. Unfair preferences (Scotland)(1) Where this subsection applies and -
(a) the winding up of a company has commenced, an alienation by the company is challengeable by -
(i) any creditor who is a creditor by virtue of a debt incurred on or before the date of such commencement, or
(ii) the liquidator;
(b) an administration order is in force in relation to a company, an alienation by the company is challengeable by the administrator.
(2) Subsection (1) applies where -
(a) by the alienation, whether before or after 1st April 1986 (the coming into force of section 75 of the Bankruptcy (Scotland) Act 1985), any part of the company's property is transferred or any claim or right of the company is discharged or renounced, and
(b) the alienation takes place on a relevant day.
(3) For the purposes of subsection (2)(b), the day on which an
alienation takes place is the day on which it becomes completely effectual; and in that subsection "relevant day" means, if the alienation has the effect of favouring -
(a) a person who is an associate (within the meaning of the Bankruptcy (Scotland) Act 1985) of the company, a day not earlier than 5 years before the date on which -
(i) the winding up of the company commences, or
(ii) as the case may be, the administration order is made; or
(b) any other person, a day not earlier than 2 years before that date.
(4) On a challenge being brought under subsection (1), the court shall grant decree of reduction or for such restoration of property to the company's assets or other redress as may be appropriate; but the court shall not gramt a decree if the person seeking to uphold the alienation establishes -
(a) that immediately, or at any other time, after the alienation the company's assets were greater than its liabilities, or
(b) that the alienation was made for adequate consideration, or
(c) that the alienation -
(i) was a birthday, Christmas or other conventional gift, or
(ii) was a gift made, for a charitable purpose, to a person who is not an associate of the company,
which, having regard to all the circumstances, it was reasonable for the company to make;
Provided that this subsection is without prejudice to any right or interest acquired in good faith and for the value from or through the transferee in the alienation.
(5) In subsection (4) above, "charitable purpose" means any charitable, benevolent or philanthropic purpose, whether or not it is charitable within the meaning of any rule of law.
(6) For the purposes of the foregoing provisions of this section, an alienation in implementation of a prior obligation is deemed to be one for which there was no consideration or no adequate consideration to the extent that the prior obligation was under- taken for no consideration or no adequate consideration.
(7) A liquidator and an administrator have the same right as a creditor has under any rule of law to challenge an alienation of a company made for no consideration or no adequate consideration.
(8) This section applies to Scotland only.
244. Extortionate credit transactions(1) Subject to subsection (2) below, subsection (4) below applies to a transaction entered into by a company, whether before or after 1st April 1986, which has the effect of creating a preference in favour of a creditor to the prejudice of the general body of creditors, being a preference created not earlier than 6 months before the commencement of the winding up of the company or the making of an administration order in relation to the company.
(2) Subsection (4) below does not apply to any of the following transaction -
(a) a transaction in the ordinary course of trade or business;
(b) a payment in cash for a debt which when it was paid had become payable, unless the transaction was conclusive with the purpose of prejudicing the general body of creditors;
(c) a transaction whereby the parties to it undertake reciprocal obligations (whther the performance by the parties of their respective obligations occurs at the same time or at different times) unless the transaction was collusive as aforesaid;
(d) the granting of a mandate by a company authorising an arrestee to pay over the arrested funds or part thereof to the arrester where -
(i) there has been a decree for payment or a warrant for summary diligence, and
(ii) the decree or warrant has been preceded by an arrestment on the dependence of the action or followed by an arrestment in execution.
(3) For the purposes of subsection (1) above, the day on which a preference was created is the day on which the preference became completely effectual.
(4) A transaction to which this subsection applies is challengeable by -
(a) in the case of a winding up -
(i) any creditor who is a creditor by virtue of a debt incurred on or before the date of commencement of the winding up, or
(ii) the liquidator; and
(b) in the case of an administration oder, the administrator.
(5) On a challenge being brought under subsection (4) above, the court, if satisfied that the transaction challenged is a transaction to which this section applies, shall grant decree of reduction or for such restoration of property to the company's assets or other redress as may be appropriate;
Provided that this subsection is without prejudice to any right or interest acquired in good faith and for value from or through the creditor in whose favour the preference was created.
(6) A liquidator and an administrator have the same right as a creditor has under any rule of law to challenge a preference created by a debtor.
(7) This section applies to Scotland only.
245. Avoidance of certain floating charges(1) This section applies as does section 238, and where the company is, or has been, a party to a transaction for, or involving, the provision of credit to the company.
(2) The court may, on the application of the office-holder, make the order with respect to the transaction if the transaction is or was extortionate and was entered into the period of 3 years ending with the day on which the administration order was made or (as the case may be) the company went into liquidation.
(3) For the purposes of this section a transaction is extortionate if, having regard to the risk accepted by the person providing the credit -
(a) the terms of it are or were such as to require grossly exorbitant payments to be made (whether unconditionally or in certain contingencies) in respect of the provision of the credit, or
(b) it otherwise grossly contravened ordinary principles of fair dealings;
and it shall be presumed, unless the contrary is proved, that a transaction with respect to which an application is made under this section is or, as the case may be, was extortionate.
(4) An order under this section with respect to any transaction may contain such one or more of the following as the court thinks fit, that is to say -
(a) provision setting aside the whole or part of any obligation created by the transaction,
(b) provision otherwise varying the terms of the transaction or varying the terms on which any security for the purposes of the transaction is held,
(c) provision requiring any person who is or was a party to the transaction to pay the office-holder any sums paid to that person, by virtue of the transaction, by the company,
(d) provision requiring any person to surrender to the office-holder any property held by him as security for the purposes of the transaction,
(e) provision directing accounts to be taken between any persons.
(5) The powers conferred by this section are exercisable in relation to any transaction concurrently with any powers exercisable in relation to that transaction as a transaction at an undervalue or under section 242 (gratuitous alienations in Scotland).
246. Unenforceability of liens on books, etc(1) This section applies as does section 238, but applies to Scotland as well as to England and Wales.
(2) Subject as follows, a floating charge on the company's under- taking or property created at a relevant time is invalid except to the extent of the aggregate of -
(a) the value of so much of the consideration for the creation of the charge as consists of money paid, or goods or services supplied, to the company at the same time as, or after, the creation of the charge,
(b) the value of so much of that consideration as consists of the discharge or reduction, at the same time as, or after, the creation of the charge, of any debt of the company, and
(c) the amount of such interest (if any) as is payable on the amount falling within paragraph (a) or (b) in pursuance of any agreement under which the money was so paid, the goods or services were so supplied or the debt was so discharged or reduced.
(3) Subject to the next subsection, the time at which a floating charge is created by a company is a relevant time for the purposes of this section if the charge is created -
(a) in the case of a discharge which is created in favour of a person who is connected with the company, at a time in the period of 2 years ending with the onset of insolvency.
(b) in the case of a charge which is created in favour of any other person, at a time in the period of 12 months ending with the onset of insolvency, or
(c) in either case, at a time between the presentation of a petition for the making of an administration order in relation to the company and the making of such an order on that petition.
(4) Where the company creates a floating charge at a time mentioned in subsection (3)(b) and the person in favour of whom the charge is created is not connected with the company, that time is not relevant time for the purposes of this section unless the company -
(a) is at that time unable to pay its debts within the meaning of section 123 in Chapter VI of Part IV, or
(b) becomes unable to pay its debts within the meaning of that section in consequence of the transaction under which the charge is created.
(5) For the purposes of subsection *3), the onset of insolvency is -
(a) in a case where this section applies by reason of the making of an administration order, the date of the presentation of the petition on which the order was made, and
(b) in a case where this section applies by reason of a company going into liquidation, the date of the commencement of the winding up.
(6) For the purposes of subsection (2)(a) the value of any goods or services supplied by way of consideration for a floating charge is the amount in money which at the time they were supplied could reasonably have been expected to be obtained for supplying the goods or services in the ordinary course of business and on the same terms (apart from the consideration) as those on which they were supplied to the company.
(1) This section applies in the case of a company where -
(a) an administration order is made in relation to to the company, or
(b) the company goes into liquidation, or
(c) a provisional liquidator is appointed;
and "the office-holder" means the administrator, the liquidator or the provisional liquidator, as the case may be.
(2) Subject as follows, a lien or other right to retain possession of any of the books, papers or other records of the company is unenforceable to the extent that its enforcement would deny possession of any books, papers or othjer records to the office- holder.
(3) This does not apply to a lien on documents which give a title to property and are held as such.
247. "Insolvency" and "Go into Liquidation" PART VII - INTERPRETATION FOR FIRST GROUP OF PARTS
248. "Secured Creditor", etc.(1) In this Group of Parts, except in so far as the context otherwise requires, "insolvency", in relation to a company, includes the approval of a voluntary arrangement under Part I, the making of an administration order or the appointment of an administrative receiver.
(2) For the purposes of any provision in this Group of Parts, a company goes into liquidation if it passes a resolution for voluntary winding up or an order for its winding up is made by the court at a time when it has not already gone into liquidation by passing such a resolution.
249. "Connected" with a CompanyIn this Group of Parts, except in so far as the context otherwise requires -
(a) "secured creditor", in relation to a company, means a creditor of the company who holds in respect of his debt a security over property of the company, and "unsecured creditor" is to be read accordingly; and
(b) "security" means -
(i) in relation to England and Wales, any mortgage, charge, lien or other security, and
(ii) in relation to Scotland, any security (whether heritable or moveable), any floating charge and any right of lien or preference and any right of retention (other than a right of compensation or set off).
250. "Member" of a CompanyFor the purposes of any provision in this Group of Parts, a person is connected with a company if -
(a) he is a director or shadow director of the company or an associate of such a director or shadow director, or
(b) he is an associate of the company ;
and "associate" has the meaning given by section 435 in Part XVIII of this Act.
251. Expressions used generallyFor the purposes of any provision in this Group of Parts, a person who is not a member of a company but to whom shares in the company have been transferred, or transmitted by operation of law, is to be regarded as a member of the company, and references to a member or members are to be read accordingly.
In this Group of Parts, except in so far as the context otherwise requires -
"administrative receiver" means -
(a) an administrative receiver as defined by section 29(2) in Chapter I of Part III, or
(b) a receiver appointed under section 51 in Chapter II of that Part in a case where the whole (or substantially the whole) of the company's property is attached by the floating charge;
"business day" means any day other than a Saturday, a Sunday, Christmas Day, Good Friday or a day which is a bank holiday in any part of Great Britain;
"chattel leasing agreement" means an agreement for the bailment or, in Scotland, the hiring of goods which is capable of subsisting for more than 3 months;
"contributory" has the meaning given by section 79;
"director" includes any person occupying the position of director, by whatever named called;
"floating charge" means a charge which, as created, was a floating charge and includes a floating charge within section 462 of the Companies Act (Scottish floating charges);
"office copy", in relation to Scotland, means a copy certified by the clerk of court;
"the official rate", in relation to interest, means the rate payable under section 189(4);
"prescribed" means prescribed by the rules;
"receiver", in the expression "receiver or manager", does not include a receiver appointed under section 51 in Chapter II of Part III;
"retention of title agreement" means an agreement for the sale of goods to a company, being an agreement -
(a) which does not constitute a charge on the goods, but
(b) under which, if the seller is not paid and the company is wound up, the seller will have priority over all other creditors of the company as respects the goods or any property representing the goods; "the rules" means rules under section 411 in Part XV; and
"shadow director" in relation to a company, means a person in accordance with whose directions or instructions the directors of the company are accustomed to act but so that a person is not deemed a shadow director by reason only that the directors act on advice given by him in a professional capacity);
and any expression for whose interpretation provision is made by Part XXVI of the Companies Act, other than an expression defined above in this session, is to be constructed in accordance with that provision.
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