Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—
Voluntary arrangements
Schedule 1 (which—is to have effect.
enables the directors of a company to obtain an initial moratorium for the company where they propose a voluntary arrangement under Part I of the Insolvency Act 1986,
makes provision about the approval and implementation of such a voluntary arrangement where a moratorium is obtained, and
makes consequential amendments),
Schedule 2 (which—is to have effect.
amends the provisions about company voluntary arrangements under Part I of the Insolvency Act 1986, and
in consequence of Schedule 1 and those amendments, makes amendments of the Building Societies Act 1986),
Schedule 3 (which enables the procedure for the approval of individual voluntary arrangements under Part VIII of the Insolvency Act 1986 to be started without an initial moratorium for the insolvent debtor and makes other amendments of the provisions about individual voluntary arrangements) is to have effect.
Part XIII of the Insolvency Act 1986 (insolvency practitioners and their qualification) is amended as follows.
In section 388 (meaning of “act as insolvency practitioner”)—
for subsection (1)(b) there is substituted—,
for subsection (2)(c) there is substituted—, and
after subsection (2A) there is inserted—
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Disqualification of company directors etc.
In section 1 of the Company Directors Disqualification Act 1986 (disqualification orders: general), in subsection (1), for the words following “an order that” there is substituted
At the end of subsection (2) of that section there is inserted “ and, unless the court otherwise orders, the period of disqualification so imposed shall begin at the end of the period of 21 days beginning with the date of the order ”.
In section 22 of that Act (interpretation), at the end there is inserted—
The Company Directors Disqualification Act 1986 is amended in accordance with this section.
After section 1 there is inserted—
In section 7 (applications to court under section 6; reporting provisions), after subsection (2) there is inserted—
In section 8 (disqualification after investigation of company), after subsection (2) there is inserted—
After that section there is inserted—
In section 9 (matters for determining unfitness of directors), after subsection (1) there is inserted—
After section 12 of the Company Directors Disqualification Act 1986 there is inserted—
If provision is made in relation to Northern Ireland for undertakings corresponding to the disqualification undertakings provided for by section 6, the Secretary of State may by order made by statutory instrument make any modifications of the Company Directors Disqualification Act 1986, or any enactment amended by Part II of Schedule 4, which he considers necessary or expedient to give effect to those undertakings in relation to Great Britain.
A statutory instrument containing an order under this section is to be subject to annulment in pursuance of a resolution of either House of Parliament.
Schedule 4 (which makes minor and consequential amendments about the disqualification of company directors, etc.) is to have effect.
Miscellaneous
Part II of the Insolvency Act 1986 (administration orders) is amended as follows.
In section 10 (effect of application), after paragraph (a) of subsection (1) there is inserted—.
In section 11 (effect of order), after paragraph (b) of subsection (3) there is inserted—.
Section 218 of the Insolvency Act 1986 (prosecution of delinquent officers and members of company) is amended as follows.
In subsection (1), for “to the prosecuting authority” there is substituted—.
Subsection (2) is omitted.
In subsection (4)—
for the words from the beginning of paragraph (a) to “that authority” in paragraph (b) there is substituted,
for “the authority” there is substituted “ the Secretary of State or (as the case may be) the Lord Advocate ”.
For subsection (5) there is substituted—
In subsection (6)(b), “to the prosecuting authority” is omitted.
In section 219 of that Act (obligations arising under section 218)—
in subsection (1), for “under section 218(5)” there is substituted “ in consequence of a report made to him under section 218(4) ” and for “that subsection” there is substituted “ section 218(5) ”,
in subsection (3), for “the prosecuting authority” and “that authority” there is substituted “ the Director of Public Prosecutions, the Lord Advocate ”,
in subsection (4), for “prosecuting authority” there is substituted “ Director of Public Prosecutions, the Lord Advocate ”.
In section 219 of the Insolvency Act 1986, after subsection (2) (answers given by a person pursuant to powers conferred by section 218 may be used in evidence against him) there is inserted—
After section 421 of the Insolvency Act 1986 (power to apply provisions of Act to insolvent estates of deceased persons) there is inserted—
In subsection (1) of section 421, after “apply” there is inserted “ in relation ”.
In Schedule 9 to the Insolvency Act 1986 (individual insolvency rules), in paragraph 21, for “handled” there is substituted “ invested or otherwise handled and with respect to the payment of interest on sums which, in pursuance of rules made by virtue of this paragraph, have been paid into the Insolvency Services Account ”.
In section 406 of that Act (interest on money received by liquidators and invested)—
for “a company” there is substituted “ or paragraph 21 of Schedule 9 to this Act (investment of money received by trustee in bankruptcy) a company or a bankrupt’s estate ”,
for the sidenote there is substituted “ Interest on money received by liquidators or trustees in bankruptcy and invested ”.
The Secretary of State may by regulations make any provision which he considers necessary or expedient for the purpose of giving effect, with or without modifications, to the model law on cross-border insolvency.
In particular, the regulations may—and may apply or, as the case may be, modify the application of insolvency law in relation to the Crown.
apply any provision of insolvency law in relation to foreign proceedings (whether begun before or after the regulations come into force),
modify the application of insolvency law (whether in relation to foreign proceedings or otherwise),
amend any provision of section 426 of the Insolvency Act 1986 (co-operation between courts),
The regulations may make different provision for different purposes and may make—which the Secretary of State considers necessary or expedient.
any supplementary, incidental or consequential provision, or
any transitory, transitional or saving provision,
In this section—“foreign proceedings” has the same meaning as in the model law on cross-border insolvency,“insolvency law” has the same meaning as in section 426(10)(a) and (b) of the Insolvency Act 1986,“the model law on cross-border insolvency” means the model law contained in Annex I of the report of the 30th session of UNCITRAL.
Regulations under this section are to be made by statutory instrument and may only be made if a draft has been laid before and approved by resolution of each House of Parliament.
Making regulations under this section requires the agreement—
if they extend to England and Wales, of the Lord Chancellor,
if they extend to Scotland, of the Scottish Ministers.
General
The enactments mentioned in Schedule 5 are repealed to the extent specified.
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Section 356 of that Act (Authority’s powers to participate in proceedings: company voluntary arrangements) is amended as follows—
for subsection (1), there is substituted—,
for subsection (2), there is substituted—,
in subsection (3), for “either” there is substituted “ any ”.
The preceding provisions of this Act (including the Schedules) are to come into force on such day as the Secretary of State may by order made by statutory instrument appoint.
Subsection (1) does not apply to section 14 (which accordingly comes into force on the day on which this Act is passed).
An order under this section may make different provision for different purposes and may make—which the Secretary of State considers necessary or expedient.
any supplementary, incidental or consequential provision, and
any transitory, transitional or saving provision,
This Act may be cited as the Insolvency Act 2000.
Moratorium where directors propose voluntary arrangement
Amendments of the Insolvency Act 1986
The Insolvency Act 1986 is amended as provided in this Schedule.
After section 1 there is inserted—
In section 2(1) (procedure where nominee is not the liquidator or administrator), at the end there is added “ and the directors do not propose to take steps to obtain a moratorium under section 1A for the company ”.
Before Schedule 1 there is inserted—
In section 27(3)(a) (protection of interests of creditors and members when administration order in force), “section 4 in” is omitted.
In section 122(1) (grounds on which company may be wound up by the court), after paragraph (f) there is inserted—.
In section 124 (application for winding up of company), after subsection (3) there is inserted—.
Section 233 (conditions which may be imposed on supply of gas, water, electricity, etc.) is amended as follows.
In subsection (1)—
after paragraph (b) there is inserted—,
in paragraph (c), for the words from “under Part I” to “section 3” there is substituted “ approved under Part I ”, and
after “receiver” (in the second place) there is inserted “ the nominee, ”.
In subsection (4)—
after paragraph (b) there is inserted—, and
in paragraph (c), for the words following “arrangement” there is substituted “ took effect ”.
In section 387 (date which determines existence and amount of preferential debt), after subsection (2) there is inserted—
After section 417 there is inserted—
In section 432(4) (offences by bodies corporate), at the end there is inserted “ and those under paragraphs 16(2), 17(3)(a), 18(3)(a), 19(3)(a), 22(1) and 23(1)(a) of Schedule A1 ”.
In Schedule 10 (punishment of offences), before the entry relating to paragraph 4(3) of Schedule 7 there are inserted the following entries—
Company voluntary arrangements
Amendments of the Insolvency Act 1986
The Insolvency Act 1986 is amended as follows.
In section 1(2) (proposal for a voluntary arrangement), for “in relation to the company” there is substituted “ or authorised to act as nominee, in relation to the voluntary arrangement ”.
In section 2 (procedure where nominee is not the liquidator or administrator)—
in subsection (2)(a), at the beginning there is inserted—.
for subsection (4) there is substituted—
In section 4(2) (decisions of meetings), for “in relation to the company” there is substituted “ or authorised to act as nominee, in relation to the voluntary arrangement ”.
After section 4 there is inserted—
In section 5 (effect of approval of voluntary arrangement)—
for subsection (1) there is substituted—,
in subsections (2) and (3), “approved” is omitted,
in subsection (2), for paragraph (b) there is substituted—
Section 6 (challenge of decisions) is amended as follows.
In subsection (1)(a), for “approved at the meetings summoned under section 3” there is substituted “ which has effect under section 4A ”.
In subsection (2), after paragraph (a) there is inserted—.
In subsection (3)—
after “be made” there is inserted “ (a) ”,
at the end there is inserted
In subsection (4)(a)—
for “the approvals given by the meetings” there is substituted “ any decision approving the voluntary arrangement which has effect under section 4A ”,
for “approval given by the meeting in question” there is substituted “ decision taken by the meeting in question which has effect under that section ”.
In subsection (5), for “approval given at the previous meetings” there is substituted “ decision approving the voluntary arrangement which has effect under section 4A ”.
In subsection (6), for the words from “since” to the end there is substituted “ under the voluntary arrangement since it took effect ”.
In subsection (7), for “an approval given” there is substituted “ a decision taken ”.
After that section there is inserted—
In section 7 (implementation of proposal)—
in subsection (1), for the words following “voluntary arrangement” there is substituted “ has effect under section 4A ”,
in subsection (2), for paragraph (a) there is substituted—,
in subsection (5), for “in relation to the company” there is substituted “ or authorised to act as supervisor, in relation to the voluntary arrangement ”.
After that section there is inserted—
In section 387(2)(b) (date which determines existence and amount of preferential debt), for the words following “date” there is substituted “ on which the voluntary arrangement takes effect ”.
In Schedule 10 (punishment of offences), before the entry relating to section 12(2) there is inserted the following entry—
Amendments of the Building Societies Act 1986
The Authority may appoint one or more competent persons to investigate and report on any matter reported to the Authority under section 7A(2) of the Insolvency Act 1986; and section 55 of the Building Societies Act 1986 (investigations) applies to such a person and the investigations as it applies to a person appointed under section 55(1) and an investigation under that section.
Section 57(5) to (5B) of that Act (use in evidence of answers given to questions) applies to answers given under section 55(3) as extended by sub-paragraph (1) as it applies to answers given under section 57.
Schedule 15A to the Building Societies Act 1986 (application of companies insolvency legislation to building societies) is amended as follows.
In paragraph 1(2)(a), after “Parts I” there is inserted “ (except section 1A) ”.
At the end of paragraph 8 there is inserted—
After paragraph 9 there is inserted—
Individual voluntary arrangements
The Insolvency Act 1986 is amended as follows.
In section 252 (interim order of court)—
in subsection (2)(a), after “with,” there is inserted—,
in subsection (2)(b), after “continued” there is inserted “ and no distress may be levied ”.
In section 253 (application for interim order)—
in subsection (1), after “proposal” there is inserted “ under this Part, that is, a proposal ”,
at the end of subsection (2) there is inserted “ and the nominee must be a person who is qualified to act as an insolvency practitioner, or authorised to act as nominee, in relation to the voluntary arrangement ”,
in subsection (4), for the words from “his proposal” to “arrangement)” there is substituted “ the proposal ”.
In section 254 (effect of application), in subsection (1)—
after “pending” there is inserted—,
after “may” there is inserted—.
In section 255 (cases in which interim order can be made), in subsection (1)—
in paragraph (a), for “such a proposal as is mentioned in that section” there is substituted “ a proposal under this Part ”,
in paragraph (d), the words from “to his creditors” to “to the debtor, and” are omitted.
In section 256 (nominee’s report on debtor’s proposal)—
in subsection (1)(a), at the beginning there is inserted—.
for subsection (3) there is substituted—
After section 256 there is inserted—
In section 257 (summoning of creditors’ meeting), in subsection (1)—
after “256” there is inserted “ or 256A ”, and
for “256(3)(a)” there is substituted “ 256(3) or 256A(4) ”.
In section 258 (decisions of creditors’ meeting), in subsection (3), for “in relation to the debtor” there is substituted “ or authorised to act as nominee, in relation to the voluntary arrangement ” and for “such as is mentioned in section 253” there is substituted “ under this Part ”.
In section 260 (effect of approval), for subsection (2)(b) there is substituted—
In section 262 (challenge of meeting’s decision), in subsection (2)—
for paragraph (b) there is substituted—,
in paragraph (c), for “256(3)(a)” there is substituted “ 256(3), 256A(4) ”.
In subsection (3) of that section—
after “be made” there is inserted “ (a) ”,
at the end there is inserted
After that section there is inserted—
In section 263 (implementation and supervision of approved voluntary arrangement)—
in subsection (2), for “256(3)(a)” there is substituted “ 256(3), 256A(4) ”, and
in subsection (5), for “in relation to the debtor” there is substituted “ or authorised to act as supervisor, in relation to the voluntary arrangement ”.
In section 347 (distress, etc.)—
in subsection (1), after “(subject to” there is inserted “ sections 252(2)(b) and 254(1) above and ”,
in subsection (8), at the beginning there is inserted “ Subject to sections 252(2)(b) and 254(1) above. ”
In section 387 (date which determines existence and amount of preferential debt), in subsection (5), for the words following “undischarged bankrupt” there is substituted—
In Schedule 10 (punishment of offences), after the entry relating to section 235(5) there is inserted the following entry—
Minor and consequential amendments about disqualification of company directors etc.
Amendments of the Company Directors Disqualification Act 1986
The Company Directors Disqualification Act 1986 is amended in accordance with this Part.
In section 1(3) (disqualification orders), after “an order” there is inserted “ or to a disqualification undertaking ” and after “those orders” there is inserted “ or, as the case may be, in the order and the undertaking ”.
In section 2(1) (disqualification on conviction of indictable offence), for the words following “a company” there is substituted “ with the receivership of a company’s property or with his being an administrative receiver of a company ”.
In section 4 (disqualification for fraud, etc., in winding up), in subsection (1)(b), for “or receiver or manager of its property” there is substituted “ receiver of the company’s property or administrative receiver of the company ” and for “receiver or manager” (in the second place) there is substituted “ receiver or administrative receiver ”.
In section 6 (disqualification of unfit directors)—
for subsection (3) there is substituted—.
in subsection (1)(b), after “being” there is inserted “ or has been ”,
for the sidenote there is substituted “ Disqualification order or undertaking; and reporting provisions ”.
In section 9 (matters for determining unfitness of directors)—
in subsection (1), “or shadow director” is omitted,
at the end of subsection (2) there is inserted “ and in this section and that Schedule “director” includes a shadow director ”.
In section 13 (criminal penalties)—
after “disqualification order or” there is inserted “ disqualification undertaking or in contravention ”,
after “12(2)” there is inserted “ or 12A ”.
In section 14(1) (offences by body corporate), after “disqualification order” there is inserted “ or disqualification undertaking or in contravention of section 12A ”.
Section 15 (personal liability for company’s debts where person acts while disqualified) is amended as follows.
In subsection (1)—
in paragraph (a), after “disqualification order or” there is inserted “ disqualification undertaking or in contravention ” and after “11” there is inserted “ or 12A ”,
in paragraph (b), after “disqualification order” there is inserted “ or disqualification undertaking or a disqualification order under Part II of the Companies (Northern Ireland) Order 1989 ”.
In subsection (5), after “disqualification order” there is inserted “ or disqualification undertaking or a disqualification order under Part II of the Companies (Northern Ireland) Order 1989 ”.
In section 16 (application for disqualification order), in subsection (2), for “5” there is substituted “ 4 ”.
For section 17 (application for leave under an order) there is substituted—
Section 18 (register of disqualification orders) is amended as follows.
In subsection (1)—
in paragraph (b), after “order” there is inserted “ or a disqualification undertaking ”,
after paragraph (c) there is inserted.
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In subsection (3)—
after “order” there is inserted “ or undertaking ”,
at the end there is inserted—.
After subsection (4) there is inserted—
For the sidenote there is substituted “ Register of disqualification orders and undertakings ”.
Section 21 (interaction with Insolvency Act 1986) is amended as follows.
In subsection (2)—
after “Sections” there is inserted “ 1A ”,
after “10” there is inserted “ 13, 14 ”,
In subsection (3)—
after “sections” there is inserted “ 1A ”,
after “10” there is inserted “ 13, 14 ”,
Section 22 (interpretation) is amended as follows.
At the end of subsection (3) there is inserted “ and references to acting as an insolvency practitioner are to be read in accordance with section 388 of that Act ”.
In subsection (4), the words following “called” are omitted.
Consequential amendments of other enactments
Insolvency Act 1986 (c. 45)
The Insolvency Act 1986 is amended as follows.
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In section 426(10) (co-operation between courts)—
in paragraph (a)—
after “provision” there is inserted “ extending to England and Wales and ”,
after “sections” there is inserted “ 1A ”,
for “12, 15” there is substituted “ 12 to 15 ”,
in paragraph (b)—
after “sections” there is inserted “ 1A ”,
for “12, 15” there is substituted “ 12 to 15 ”,
Law Reform (Miscellaneous Provisions) (Scotland) Act 1990 (c. 40.)
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Charities Act 1993 (c. 10)
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Pensions Act 1995 (c. 26)
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Police Act 1996 (c. 16)
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Housing Act 1996 (c. 52)
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Police Act 1997 (c. 50)
The Police Act 1997 is amended as follows.
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In Schedule 2 (members of Service Authorities), in paragraph 3(1)(c)—
after “disqualification order” there is inserted “ or disqualification undertaking ”,
after “1986 or” there is inserted “ to a disqualification order under ”.
Repeals