PART I GENERAL

Citation, commencement and extent_I1

1.—(1) This Order may be cited as the Insolvent Partnerships Order 1994 and shall come into force on 1st December 1994.

(2) This Order—

(a)in the case of insolvency proceedings in relation to companies and partnerships, relates to companies and partnerships which the courts in England and Wales have jurisdiction to wind up; and

(b)in the case of insolvency proceedings in relation to individuals, extends to England and Wales only.

(3) In paragraph (2) the term “insolvency proceedings” has the meaning ascribed to it by article 2 below.

Interpretation: definitions_I2

2.—(1) In this Order, except in so far as the context otherwise requires—

“the Act” means the Insolvency Act 1986 ;

“agricultural charge” has the same meaning as in the Agricultural Credits Act 1928 ( 3 );

“agricultural receiver” means a receiver appointed under an agricultural charge;

“corporate member” means an insolvent member which is a company;

“the court”, in relation to an insolvent partnership, means the court which has jurisdiction to wind up the partnership;

“individual member” means an insolvent member who is an individual;

“insolvency order” means—

“insolvency petition” means, in the case of a petition presented to the court—

where the petition is presented in conjunction with a petition for the winding up of the partnership by the court as an unregistered company under the Act;

“insolvency proceedings” means any proceedings under the Act, this Order or the [^F1 Insolvency (England and Wales) Rules 2016 ^F1]

“insolvent member” means a member of an insolvent partnership, against whom an insolvency petition is being or has been presented;

“joint bankruptcy petition” means a petition by virtue of article 11 of this Order;

“joint debt” means a debt of an insolvent partnership in respect of which an order is made by virtue of Part IV or V of this Order;

“joint estate” means the partnership property of an insolvent partnership in respect of which an order is made by virtue of Part IV or V of this Order;

“joint expenses” means expenses incurred in the winding up of an insolvent partnership or in the winding up of the business of an insolvent partnership and the administration of its property;

“limited partner” has the same meaning as in the Limited Partnerships Act 1907 ( 4 );

“member” means a member of a partnership and any person who is liable as a partner within the meaning of section 14 of the Partnership Act 1890 ( 5 );

“officer”, in relation to an insolvent partnership, means—

“partnership property” has the same meaning as in the Partnership Act 1890 ;

“postponed debt” means a debt the payment of which is postponed by or under any provision of the Act or of any other enactment;

“responsible insolvency practitioner” means—

and in either case includes the official receiver when so acting;

“separate debt” means a debt for which a member of a partnership is liable, other than a joint debt;

“separate estate” means the property of an insolvent member against whom an insolvency order has been made;

“separate expenses” means expenses incurred in the winding up of a corporate member, or in the bankruptcy of an individual member; and

“trustee of the partnership” means a person authorised by order made by virtue of article 11 of this Order to wind up the business of an insolvent partnership and to administer its property.

(2) The definitions in paragraph (1), other than the first definition, shall be added to those in section 436 of the Act.

(3) References in provisions of the Act applied by this Order to any provision of the Act so applied shall, unless the context otherwise requires, be construed as references to the provision as so applied.

(4) Where, in any Schedule to this Order, all or any of the provisions of two or more sections of the Act are expressed to be modified by a single paragraph of the Schedule, the modification includes the combination of the provisions of those sections into the one or more sections set out in that paragraph.

Interpretation: expressions appropriate to companies_I3

3.—(1) This article applies for the interpretation in relation to insolvent partnerships of expressions appropriate to companies in provisions of the Act and of the Company Directors Disqualification Act 1986 applied by this Order, unless the contrary intention appears.

(2) References to companies shall be construed as references to insolvent partnerships and all references to the registrar of companies shall be omitted.

(3) References to shares of a company shall be construed—

(a)in relation to an insolvent partnership with capital, as references to rights to share in that capital; and

(b)in relation to an insolvent partnership without capital, as references to interests—

(i)conferring any right to share in the profits or liability to contribute to the losses of the partnership, or

(ii)giving rise to an obligation to contribute to the debts or expenses of the partnership in the event of a winding up.

(4) Other expressions appropriate to companies shall be construed, in relation to an insolvent partnership, as references to the corresponding persons, officers, documents or organs (as the case may be) appropriate to a partnership.

PART II VOLUNTARY ARRANGEMENTS

Voluntary arrangement of insolvent partnership_I4

4.[^F2—(1) The provisions of Part I of, and Schedule A1 to, the Act shall apply in relation to an insolvent partnership, certain of those provisions being modified in such manner that, after modification, they are as set out in Schedule 1 to this Order.^F2]

(2) For the purposes of the provisions of the Act applied by paragraph (1), the provisions of the Act specified in paragraph (3) below, insofar as they relate to company voluntary arrangements, shall also apply in relation to insolvent partnerships.

(3) The provisions referred to in paragraph (2) are—

[^F3 (za)section 176AZA in Part IV,^F3]

(a)[^F4 sections 233, 233A and 233B and Schedule 4ZZA^F4] in Part VI,

(b)Part VII, with the exception of section 250,

(c)Part XII,

(d)Part XIII,

(e)sections 411, 413, 414 and 419 in Part XV, and

(f)Parts XVI to XIX.

Voluntary arrangements of members of insolvent partnership_I5

5.—(1) Where insolvency orders are made against an insolvent partnership and an insolvent member of that partnership in his capacity as such, Part I of the Act shall apply to corporate members and Part VIII to individual members of that partnership, with the modification that any reference to the creditors of the company or of the debtor, as the case may be, includes a reference to the creditors of the partnership.

(2) Paragraph (1) is not to be construed as preventing the application of Part I or (as the case may be) Part VIII of the Act to any person who is a member of an insolvent partnership (whether or not a winding-up order has been made against that partnership) and against whom an insolvency order has not been made under this Order or under the Act.

[^F5PART III ADMINISTRATION

Administration in relation to insolvent partnership

case6.—(1) The provisions of Part II of, and Schedule B1 to, the Act shall apply in relation to an insolvent partnership, certain of those provisions being modified in such manner that, after modification, they are as set out in Schedule 2 to this Order.

(2) In its application to insolvent partnerships, Part II of, and Schedule B1 to, the Act (as modified as set out in Schedule 2 to this Order) shall be read subject to paragraph (3).

(3) For every reference to—

(a) “administrative receiver” there shall be substituted “agricultural receiver”; and

(b) “floating charge” there shall be substituted “agricultural floating charge”.

(4) For the purposes of the provisions of the Act applied by paragraph (1), the provisions of the Act specified in paragraph (5) below, insofar as they relate to the appointment of an administrator, shall also apply in relation to insolvent partnerships.

(5) The provisions referred to in paragraph (4) are—

[^F6 (za)section 176AZA in Part IV,^F6]

(a)Part VI,

(b)Part VII (with the exception of section 250),

(c)Part XII,

(d)Part XIII,

(e)sections 411, 413, 414 and 419 in Part XV, and

(f)Parts XVI to XIX.

(6) For the purposes of this Article and the provisions of the Act applied by paragraph (1), “agricultural floating charge” shall be construed as a reference to a floating charge created under section 5 of the Agricultural Credits Act 1928 . ^F5]

PART IV CREDITORS' ETC. WINDING-UP PETITIONS

Winding up of insolvent partnership as unregistered company on petition of creditor etc. where no concurrent petition presented against member_I6

case7.—(1) Subject to paragraph (2) below, the provisions of Part V of the Act shall apply in relation to the winding up of an insolvent partnership as an unregistered company on the petition of a creditor, [^F7of a liquidator (within the meaning of Article 2(b) of the EC Regulation) appointed in proceedings by virtue of Article 3(1) of the EC Regulation, of a temporary administrator (within the meaning of Article 38 of the EC Regulation),^F7] of a responsible insolvency practitioner[^F8 , of the Secretary of State or of any other person other than a member,^F8] where no insolvency petition is presented by the petitioner against a member or former member of that partnership in his capacity as such.

(2) Certain of the provisions referred to in paragraph (1) are modified in their application in relation to insolvent partnerships which are being wound up by virtue of that paragraph in such manner that, after modification, they are as set out in Part I of Schedule 3 to this Order.

(3) The provisions of the Act specified in Part II of Schedule 3 to this Order shall apply as set out in that Part for the purposes of section 221(5) of the Act, as modified by Part I of that Schedule.

[^F9Winding up of insolvent partnership as unregistered company on the petition of creditor etc. where concurrent petitions presented against one or more members^F9] _I7

case8.—(1) Subject to paragraph (2) below, the provisions of Part V of the Act (other than sections 223 and 224), shall apply in relation to the winding up of an insolvent partnership as an unregistered company on [^F10the petition of a creditor, of a liquidator (within the meaning of Article 2(b) of the EC Regulation) appointed in proceedings by virtue of Article 3(1) of the EC Regulation, or of a temporary administrator (within the meaning of Article 38 of the EC Regulation)^F10] where insolvency petitions are presented by the petitioner against the partnership and against one or more members or former members of the partnership in their capacity as such.

(2) Certain of the provisions referred to in paragraph (1) are modified in their application in relation to insolvent partnerships which are being wound up by virtue of that paragraph in such manner that, after modification, they are as set out in Part I of Schedule 4 to this Order.

(3) The provisions of the Act specified in Part II of Schedule 4 to this Order shall apply as set out in that Part for the purposes of section 221(5) of the Act, as modified by Part I of that Schedule.

(4) The provisions of the Act specified in paragraph (5) below, insofar as they relate to winding up of companies by the court in England and Wales on a creditor’s petition, shall apply in relation to the winding up of a corporate member or former corporate member (in its capacity as such) of an insolvent partnership which is being wound up by virtue of paragraph (1).

(5) The provisions referred to in paragraph (4) are—

(a)^F11Part IV ...,

(b)Part VI,

(c)Part VII, and

(d)Parts XII to XIX.

(6) The provisions of the Act specified in paragraph (7) below, insofar as they relate to the bankruptcy of individuals in England and Wales on a petition presented by a creditor, shall apply in relation to the bankruptcy of an individual member or former individual member (in his capacity as such) of an insolvent partnership which is being wound up by virtue of paragraph (1).

(7) The provisions referred to in paragraph (6) are—

(a)Part IX (other than sections 269, 270, 287 and 297), and

(b)Parts X to XIX.

(8) Certain of the provisions referred to in paragraphs (4) and (6) are modified in their application in relation to the corporate or individual members or former corporate or individual members of insolvent partnerships in such manner that, after modification, they are as set out in Part II of Schedule 4 to this Order.

(9) The provisions of the Act applied by this Article shall further be modified so that references to a corporate or individual member include any former such member against whom an insolvency petition is being or has been presented by virtue of this Article.

case PART V MEMBERS' PETITIONS

Winding up of insolvent partnership as unregistered company on member’s petition where no concurrent petition presented against member_I8

9. The following provisions of the Act shall apply in relation to the winding up of an insolvent partnership as an unregistered company on the petition of a member where no insolvency petition is presented by the petitioner against a member of that partnership in his capacity as such—

(a)sections 117 and 221, modified in such manner that, after modification, they are as set out in Schedule 5 to this Order; and

(b)the other provisions of Part V of the Act, certain of those provisions being modified in such manner that, after modification, they are as set out in Part I of Schedule 3 to this Order.

Winding up of insolvent partnership as unregistered company on member’s petition where concurrent petitions presented against all members_I9

10.—(1) The following provisions of the Act shall apply in relation to the winding up of an insolvent partnership as an unregistered company on a member’s petition where insolvency petitions are presented by the petitioner against the partnership and against all its members in their capacity as such—

(a)sections 117, 124, 125, 221, 264, [^F12265 and 271^F12] of the Act, modified in such manner that, after modification, they are as set out in Schedule 6 to this Order; and

(b)sections 220, 225 and 227 to 229 in Part V of the Act, section 220 being modified in such manner that, after modification, it is as set out in Part I of Schedule 4 to this Order.

(2) The provisions of the Act specified in paragraph (3) below, insofar as they relate to winding up of companies by the court in England and Wales on a member’s petition, shall apply in relation to the winding up of a corporate member (in its capacity as such) of an insolvent partnership which is wound up by virtue of paragraph (1).

(3) The provisions referred to in paragraph (2) are—

(a)^F13Part IV ...,

(b)Part VI,

(c)Part VII, and

(d)Parts XII to XIX.

(4) The provisions of the Act specified in paragraph (5) below, insofar as they relate to the bankruptcy of individuals in England and Wales where [^F14a bankruptcy application is made^F14] by a debtor, shall apply in relation to the bankruptcy of an individual member (in his capacity as such) of an insolvent partnership which is being wound up by virtue of paragraph (1).

(5) The provisions referred to in paragraph (4) are—

(a)^F15Part IX (other than sections ... 287 and 297), and

(b)Parts X to XIX.

[^F16 (6) Certain of the provisions referred to in paragraphs (2) and (4) are modified in their application in relation to the corporate or individual members of insolvent partnerships in such manner that, after modification, they are as set out in Part II of Schedule 4 to this Order.^F16]

Insolvency proceedings not involving winding up of insolvent partnership as unregistered company where individual members present joint bankruptcy petition_I10

11.—(1) The provisions of the Act specified in paragraph (2) below shall apply in relation to the bankruptcy of the individual members of an insolvent partnership where those members jointly present a petition to the court for orders to be made for the bankruptcy of each of them in his capacity as a member of the partnership, and the winding up of the partnership business and administration of its property, without the partnership being wound up as an unregistered company under Part V of the Act.

(2) The provisions referred to in paragraph (1) are—

(a)Part IX (other than [^F17section^F17] 287), and

(b)Parts X to XIX,

insofar as they relate to the insolvency of individuals in England and Wales where [^F18a bankruptcy application is made^F18] by a debtor.

(3) Certain of the provisions referred to in paragraph (1) are modified in their application in relation to the individual members of insolvent partnerships in such manner that, after modification, they are as set out in Schedule 7 to this Order.

PART VI PROVISIONS APPLYING IN INSOLVENCY PROCEEDINGS IN RELATION TO INSOLVENT PARTNERSHIPS

[^F19Decision procedure in insolvency proceedings in relation to insolvent partnerships

11A. Sections 246ZE, 246ZF, 379ZA and 379ZB of the Act apply in insolvency proceedings in relation to insolvent partnerships with the modifications set out in Schedule 7A to this Order.^F19]

Winding up of unregistered company which is a member of insolvent partnership being wound up by virtue of this Order_I11

12. Where an insolvent partnership or other body which may be wound up under Part V of the Act as an unregistered company is itself a member of an insolvent partnership being so wound up, articles 8 and 10 above shall apply in relation to the latter insolvent partnership as though the former body were a corporate member of that partnership.

Deposit on petitions_I12

13.—(1) Where an order under section 414(4) or 415(3) of the Act (security for fees) provides for any sum to be deposited on presentation of a winding-up or bankruptcy petition, that sum shall, in the case of petitions presented by virtue of articles 8 and 10 above, only be required to be deposited in respect of the petition for winding up the partnership, but shall be treated as a deposit in respect of all those petitions.

(2) Production of evidence as to the sum deposited on presentation of the petition for winding up the partnership shall suffice for the filing in court of an insolvency petition against an insolvent member.

Supplemental powers of court_I13

case14.—(1) At the end of section 168 of the Act there shall be inserted the following subsections:—

“(5A) Where at any time after a winding-up petition has been presented to the court against any person (including an insolvent partnership or other body which may be wound up under Part V of the Act as an unregistered company), whether by virtue of the provisions of the Insolvent Partnerships Order 1994(6) or not, the attention of the court is drawn to the fact that the person in question is a member of an insolvent partnership, the court may make an order as to the future conduct of the insolvency proceedings and any such order may apply any provisions of that Order with any necessary modifications.

(5B) Any order or directions under subsection (5A) may be made or given on the application of the official receiver, any responsible insolvency practitioner, the trustee of the partnership or any other interested person and may include provisions as to the administration of the joint estate of the partnership, and in particular how it and the separate estate of any member are to be administered.

(5C) Where the court makes an order under section 72(1)(a) of the Financial Services Act 1986(7) or section 92(1)(a) of the Banking Act 1987(8) for the winding up of an insolvent partnership, the court may make an order as to the future conduct of the winding-up proceedings, and any such order may apply any provisions of the Insolvent Partnerships Order 1994 with any necessary modifications.”.

(2) At the end of section 303 of the Act there shall be inserted the following subsections:—

“(2A) Where at any time after a bankruptcy petition has been presented to the court against any person, whether under the provisions of the Insolvent Partnerships Order 1994 or not, the attention of the court is drawn to the fact that the person in question is a member of an insolvent partnership, the court may make an order as to the future conduct of the insolvency proceedings and any such order may apply any provisions of that Order with any necessary modifications.

(2B) Where a bankruptcy petition has been presented against more than one individual in the circumstances mentioned in subsection (2A) above, the court may give such directions for consolidating the proceedings, or any of them, as it thinks just.

(2C) Any order or directions under subsection (2A) or (2B) may be made or given on the application of the official receiver, any responsible insolvency practitioner, the trustee of the partnership or any other interested person and may include provisions as to the administration of the joint estate of the partnership, and in particular how it and the separate estate of any member are to be administered.”.

Meaning of “act as insolvency practitioner”_I14

15.—(1) After section 388(2) of the Act there shall be inserted the following—

“(2A) A person acts as an insolvency practitioner in relation to an insolvent partnership by acting—

(a)as its liquidator, provisional liquidator or administrator, or

(b)as trustee of the partnership under article 11 of the Insolvent Partnerships Order 1994, or

(c)as supervisor of a voluntary arrangement approved in relation to it under Part I of this Act.”.

(2) In section 388(3) the words “to a partnership and” shall be omitted.

PART VII DISQUALIFICATION

Application of Company Directors Disqualification Act 1986_{cross-notesI15}

case16. Where an insolvent partnership is wound up as an unregistered company under Part V of the Act, the provisions of [^F20sections 1, 1A, 5A, 6 to 10, 12C, 13 to 15C, 17, 19(c) and 20 of, and Schedule 1 to^F20] , the Company Directors Disqualification Act 1986 shall apply, certain of those provisions being modified in such manner that, after modification, they are as set out in Schedule 8 to this Order.

PART VIII MISCELLANEOUS

Forms_I16

17.—(1) The forms contained in Schedule 9 to this Order shall be used in and in connection with proceedings by virtue of this Order, whether in the High Court or a county court.

(2) The forms shall be used with such variations, if any, as the circumstances may require.

Application of subordinate legislation_{cross-notesI17}

18.—(1) The subordinate legislation specified in Schedule 10 to this Order shall apply as from time to time in force and with such modifications as the context requires for the purpose of giving effect to the provisions of the Act and of the Company Directors Disqualification Act 1986 which are applied by this Order.

(2) In the case of any conflict between any provision of the subordinate legislation applied by paragraph (1) and any provision of this Order, the latter provision shall prevail.

Supplemental and transitional provisions_I18

case19.—(1) This Order does not apply in relation to any case in which a winding-up or a bankruptcy order was made under the Insolvent Partnerships Order 1986(9) in relation to a partnership or an insolvent member of a partnership, and where this Order does not apply the law in force immediately before this Order came into force continues to have effect.

(2) Where winding-up or bankruptcy proceedings commenced under the provisions of the Insolvent Partnerships Order 1986 were pending in relation to a partnership or an insolvent member of a partnership immediately before this Order came into force, either—

(a)those proceedings shall be continued, after the coming into force of this Order, in accordance with the provisions of this Order, or

(b)if the court so directs, they shall be continued under the provisions of the 1986 Order, in which case the law in force immediately before this Order came into force continues to have effect.

(3) For the purpose of paragraph (2) above, winding-up or bankruptcy proceedings are pending if a statutory or written demand has been served or a winding-up or bankruptcy petition has been presented.

[^F21 (4) Nothing in this Order is to be taken as preventing a petition being presented against an insolvent partnership under section 367 of the Financial Services and Markets Act 2000, or any other enactment [^F22 except where paragraph 12 of Schedule A1 to the Act, as applied by this Order, has the effect of preventing a petition being so presented^F22] .^F21]

(5) Nothing in this Order is to be taken as preventing any creditor or creditors owed one or more debts by an insolvent partnership from presenting a petition under the Act against one or more members of the partnership liable for that debt or those debts (as the case may be) without including the others and without presenting a petition for the winding up of the partnership as an unregistered company.

(6) Bankruptcy proceedings may be consolidated by virtue of article 14(2) above irrespective of whether they were commenced under the Bankruptcy Act 1914(10) or the Insolvency Act 1986 or by virtue of the Insolvent Partnerships Order 1986 or this Order, and the court shall, in the case of proceedings commenced under or by virtue of different enactments, make provision for the manner in which the consolidated proceedings are to be conducted.

Revocation_I19

20. The Insolvent Partnerships Order 1986 is hereby revoked.

Article 4

[^F23SCHEDULE 1 MODIFIED PROVISIONS OF PART I OF, AND SCHEDULE A1 TO, THE ACT (COMPANY VOLUNTARY ARRANGEMENTS) AS APPLIED BY ARTICLE 4

PART I Modified Provisions of Sections 1 to 7B of the Act

For sections 1 to 7B of the Act there shall be substituted:—

“PART I Partnership Voluntary Arrangements

The proposal

“1. Those who may propose an arrangement

(1) The members of an insolvent partnership (other than one [^F24which is in administration^F24] , or which is being wound up as an unregistered company, or in respect of which an order has been made by virtue of article 11 of the Insolvent Partnerships Order 1994) may make a proposal under this Part to the partnership’s creditors for a composition in satisfaction of the debts of the partnership or a scheme of arrangement of its affairs (from here on referred to, in either case, as a “voluntary arrangement”).

(2) A proposal under this Part is one which provides for some person (“the nominee”) to act in relation to the voluntary arrangement either as trustee or otherwise for the purpose of supervising its implementation; and the nominee must be a person who is qualified to act as an insolvency practitioner ^F25... in relation to the voluntary arrangement.

(3) Such a proposal may also be made—

(a)where [^F26the partnership is in administration^F26] , by the administrator,

(b)where the partnership is being wound up as an unregistered company, by the liquidator, and

(c)where an order has been made by virtue of article 11 of the Insolvent Partnerships Order 1994, by the trustee of the partnership.

^F27(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

“1A. Moratorium

(1) Where the members of an eligible insolvent partnership intend to make a proposal for a voluntary arrangement, they may take steps to obtain a moratorium for the insolvent partnership.

(2) Subject to subsections (3), (4), (5), (6) and (7), the provisions of Schedule A1 to this Act have effect with respect to—

(a)insolvent partnerships eligible for a moratorium under this section,

(b)the procedure for obtaining such a moratorium,

(c)the effects of such a moratorium, and

(d)the procedure applicable (in place of sections 2 to 6 and 7) in relation to the approval and implementation of a voluntary arrangement where such a moratorium is or has been in force.

(3) Certain of the provisions applied in relation to insolvent partnerships by virtue of subsection (2) are modified in their application in relation to insolvent partnerships in such manner that, after modification, they are as set out in Part II of Schedule 1 to the Insolvent Partnerships Order 1994.

(4) Paragraphs 4A, 4B, 4C, 4D, 4E, 4F, 4G, 4H, 4I, 4J, 4K, 5, 7(4), 8(8), 32(7), 34(2), 41(5) and 45 of Schedule A1 to this Act shall not apply.

(5) An insolvent partnership is not liable to a fine under paragraphs 16(2), 17(3), 18(3), 19(3), 22 or 23(1) of Schedule A1 to the Act.

(6) Notwithstanding subsection (5) an officer of an insolvent partnership may be liable to imprisonment or a fine under the paragraphs referred to in that subsection in the same manner as an officer of a company.

(7) In the application of Schedule A1, and the application of the entries in Schedule 10 relating to offences under Schedule A1, to insolvent partnerships—

(a)references to the directors or members of a company shall be construed as references to the members of an insolvent partnership,

(b)references to officers of a company shall be construed as references to the officers of an insolvent partnership,

(c)references to a meeting of a company shall be construed as references to a meeting of the members of an insolvent partnership, and

(d)references to a floating charge shall be construed as references to a floating charge created under section 5 of the Agricultural Credits Act 1928.

“2. Procedure where nominee is not the liquidator, administrator or trustee

(1) This section applies where the nominee under section 1 is not the liquidator, administrator or trustee of the insolvent partnership and the members of the partnership do not propose to take steps to obtain a moratorium under section 1A for the insolvent partnership.

(2) The nominee shall, within 28 days (or such longer period as the court may allow) after he is given notice of the proposal for a voluntary arrangement, submit a report to the court stating—

(a)whether, in his opinion, the proposed voluntary arrangement has a reasonable prospect of being approved and implemented,

[^F28(b) whether, in his opinion, the proposal should be considered by a meeting of the members of the partnership and by the partnership’s creditors, and

(c)if in his opinion it should, the date on which, and time and place at which, he proposes a meeting should be held.^F28]

(3) The nominee shall also state in his report whether there are in existence any insolvency proceedings in respect of the insolvent partnership or any of its members.

(4) For the purposes of enabling the nominee to prepare his report, the person intending to make the proposal shall submit to the nominee—

(a)a document setting out the terms of the proposed voluntary arrangement, and

(b)a statement of the partnership’s affairs containing—

(i)such particulars of the partnership’s creditors and of the partnership’s debts and other liabilities and of the partnership property as may be prescribed, and

(ii)such other information as may be prescribed.

(5) The court may—

(a)on an application made by the person intending to make the proposal, in a case where the nominee has failed to submit the report required by this section or has died, or

(b)on an application made by that person or the nominee, in a case where it is impracticable or inappropriate for the nominee to continue to act as such,

direct that the nominee be replaced as such by another person qualified to act as an insolvency practitioner ^F29... in relation to the voluntary arrangement.

“3. Summoning of meetings

(1) Where the nominee under section 1 is not the liquidator, administrator or trustee of the insolvent partnership, and it has been reported to the court [^F30under section 2(2) that the proposal should be considered by a meeting of the members of the partnership and by the partnership’s creditors^F30] , the person making the report shall (unless the court otherwise [^F31directs)—

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

(b)seek a decision from the partnership’s creditors as to whether they approve the proposal.^F31]

(2) Where the nominee is the liquidator, administrator or trustee of the insolvent partnership, he [^F32must—

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

(b)seek a decision from the partnership’s creditors as to whether they approve the proposal.^F32]

[^F33(3) A decision of the partnership’s creditors as to whether they approve the proposal is to be made by a qualifying decision procedure.

(4) Notice of the qualifying decision procedure must be given to every creditor of the partnership of whose claim and address the person summoning the meeting is aware.^F33]

Consideration and implementation of proposal

“4. Decisions of [^F34the members of the partnership and its creditors^F34]

[^F35(1) This section applies where, under section 3—

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

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

(1A) The members of the partnership and its creditors may approve the proposed voluntary arrangement with or without modifications.^F35]

(2) The modifications may include one conferring the functions proposed to be conferred on the nominee on another person qualified to act as an insolvency practitioner ^F36... in relation to the voluntary arrangement.

But they shall not include any modification by virtue of which the proposal ceases to be a proposal such as is mentioned in section 1.

(3) [^F37Neither the members of the partnership nor its creditors may^F37] approve any proposal or modification which affects the right of a secured creditor of the partnership to enforce his security, except with the concurrence of the creditor concerned.

(4) Subject as follows, [^F38neither the members of the partnership nor its creditors may^F38] approve any proposal or modification under which—

(a)any preferential debt of the partnership is to be paid otherwise than in priority to such of its debts as are not preferential debts, ^F39...

[^F40(aa)any ordinary preferential debt of the partnership is to be paid otherwise than in priority to any secondary preferential debts that it may have,^F40]

(b)a preferential creditor of the partnership is to be paid an amount in respect of [^F41an ordinary preferential debt^F41] that bears to that debt a smaller proportion than is borne to [^F42another ordinary^F42] preferential debt by the amount that is to be paid in respect of that other debt ^F43[^F44...

(c)a preferential creditor of the partnership is to be paid an amount in respect of a secondary preferential debt that bears to that debt a smaller proportion than is borne to another secondary preferential debt by the amount that is to be paid in respect of that other debt^F44] [^F45or

(d)in the case of a company which is a relevant financial institution (see section 387A), any non-preferential debt is to be paid otherwise than in accordance with the rules in section 176AZA(2) or (3).^F45]

However, [^F46 such a proposal or modification may be approved^F46] with the concurrence of the ^F47... creditor concerned.

(5) Subject as above, [^F48the meeting of the members of the partnership and the qualifying decision procedure^F48] shall be conducted in accordance with the rules.

(6) After the conclusion of [^F49the meeting of the members of the partnership^F49] in accordance with the rules, the chairman of the meeting shall report the result of the meeting to the court, and, immediately after reporting to the court, shall give notice of the result of the meeting to all those who were sent notice of the meeting in accordance with the rules.

[^F50(6A) After the partnership’s creditors have decided whether to approve the proposed voluntary arrangement the person who sought the decision must—

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

(b)immediately after reporting to the court, give notice of the creditors’ decision to everyone who was invited to consider the proposal or to whom notice of a decision procedure or meeting was delivered.^F50]

(7) References in this section to preferential debts [^F51, ordinary preferential debts, secondary preferential debts^F51] and preferential creditors are to be read in accordance with section 386 in Part XII of this Act.

“4A. Approval of arrangement

(1) This section applies to a decision, under section 4, with respect to the approval of a proposed voluntary arrangement.

(2) The decision has effect if, in accordance with the rules—

(a)it has been taken by [^F52the meeting of the members of the partnership summoned under section 3 and by the partnership’s creditors pursuant to that section^F52] , or

(b)(subject to any order made under subsection (6)) it has been taken by the [^F53partnership’s creditors pursuant to^F53] that section.

(3) If the decision taken by the [^F54partnership’s creditors^F54] differs from that taken by the meeting of the members of the partnership, a member of the partnership may apply to court.

(4) An application under subsection (3) shall not be made after the end of the period of 28 days beginning with—

(a)the day on which the decision was taken by the [^F54partnership’s creditors^F54] , or

(b)where the decision of the meeting of the members of the partnership was taken on a later day, that day.

[^F55(5) Where a member of an insolvent partnership which is regulated applies to the court under subsection (3), the appropriate regulator is entitled to be heard on the application.

(5A) “The appropriate regulator” means—

(a)where the partnership is a PRA-regulated partnership, the Prudential Regulation Authority and the Financial Conduct Authority;

(b)in any other case the Financial Conduct Authority.

(5B) For the purposes of subsection (5A), a “PRA-regulated partnership” means a partnership which—

(a)is or has been, a PRA–authorised person (within the meaning of the Financial Services and Markets Act 2000),

(b)is, or has been, an appointed representative within the meaning given by section 39 of that Act, whose principal (or one of whose principals) is, or was, a PRA-authorised person, or

(c)is carrying on, or has carried on, a PRA-regulated activity (within the meaning of that Act) in contravention of the general prohibition under section 19 of that Act.^F55]

(6) On an application under subsection (3), the court may—

(a)order the decision of the meeting of the members of the partnership to have effect instead of the decision of the [^F54partnership’s creditors^F54] , or

(b)make such other order as it thinks fit.

(7) In this section “regulated” in relation to an insolvent partnership means a person who—

(a)is, or has been, an authorised person within the meaning given by section 31 of the Financial Services and Markets Act 2000,

(b)is, or has been, an appointed representative within the meaning given by section 39 of that Act, or

(c)is carrying on, or has carried on, a regulated activity, within the meaning given by section 22 of that Act, in contravention of the general prohibition within the meaning given by section 19 of that Act.

“5. Effect of approval

(1) This section applies where a decision approving a voluntary arrangement has effect under section 4A.

(2) The voluntary arrangement—

(a)takes effect as if made by the members of the partnership at the [^F56time the creditors decided to approve the voluntary arrangement^F56] , and

(b)binds every person who in accordance with the rules—

(i)was entitled to vote [^F57in the qualifying decision procedure by which the creditors’ decision to approve the voluntary arrangement was made^F57] , or

(ii)would have been so entitled if he had had notice of [^F58the procedure^F58] ,

as if he were a party to the voluntary arrangement.

(2A) If—

(a)when the arrangement ceases to have effect any amount payable under the arrangement to a person bound by virtue of subsection 2(b)(ii) has not been paid, and

(b)the arrangement did not come to an end prematurely,

the insolvent partnership shall at that time become liable to pay to that person the amount payable under the arrangement.

(3) Subject as follows, if the partnership is being wound up as an unregistered company, or [^F59is in administration^F59] or an order by virtue of article 11 of the Insolvent Partnerships Order 1994 is in force, the court may do one or both of the following, namely—

(a)by order—

(i)stay all proceedings in the winding up or in the proceedings under the order made by virtue of the said article 11 (as the case may be), including any related insolvency proceedings of a member of the partnership in his capacity as such, or

(ii) [^F60provide for the appointment of the administrator to cease to have effect^F60] ;

(b)give such directions as it thinks appropriate for facilitating the implementation of the voluntary arrangement with respect to—

(i)the conduct of the winding up, the proceedings by virtue of the said article 11 or the administration (as the case may be), and

(ii)the conduct of any related insolvency proceedings as referred to in paragraph (a)(i) above.

(4) The court shall not make an order under subsection (3)(a)—

(a)at any time before the end of the period of 28 days beginning with the first day on which each of the reports required by section 4(6) [^F61and (6A)^F61] has been made to the court, or

(b)at any time when an application under the next section or an appeal in respect of such an application is pending, or at any time in the period within which such an appeal may be brought.

“6. Challenge of decisions

(1) Subject to this section, an application to the court may be made, by any of the persons specified below, on one or both of the following grounds, namely—

(a)that a voluntary arrangement which has effect under section 4A unfairly prejudices the interests of a creditor, member or contributory of the partnership;

(b)that there has been some material irregularity at or in relation to [^F62the meeting of the members of the partnership or in the relevant qualifying decision procedure^F62] .

(2) The persons who may apply under this section are—

(a)a person entitled, in accordance with the rules, to vote at [^F63the meeting of the members of the partnership or in the relevant qualifying decision procedure^F63] ;

(b)a person who would have been entitled, in accordance with the rules, to vote [^F64in the relevant qualifying decision procedure^F64] if he had had notice of it;

(c)the nominee or any person who has replaced him under section 2(5) or 4(2); and

(d)if the partnership is being wound up as an unregistered company or [^F65is in administration or an^F65] order by virtue of article 11 of the Insolvent Partnerships Order 1994 is in force, the liquidator, administrator or trustee of the partnership.

(3) An application under this section shall not be made—

(a)after the end of the period of 28 days beginning with the first day on which each of the reports required by section 4(6) [^F66and (6A)^F66] has been made to the court, or

(b)in the case of a person who was not given notice of the [^F67relevant qualifying decision procedure^F67] , after the end of the period of 28 days beginning with the day on which he became aware that [^F68the relevant qualifying decision procedure^F68] had taken place,

but (subject to that) an application made by a person within subsection (2)(b) on the ground that the voluntary arrangement prejudices his interests may be made after the voluntary arrangement has ceased to have effect, unless it came to an end prematurely.

(4) Where on such an application the court is satisfied as to either of the grounds mentioned in subsection (1), it may do [^F69any^F69] of the following, namely—

(a)revoke or suspend any decision approving the voluntary arrangement which has effect under section 4A or, in a case falling within subsection (1)(b), any decision taken by the meeting [^F70of the members of the partnership, or in the relevant qualifying decision procedure,^F70] which has effect under that section;

(b)give a direction to any person for the summoning of [^F71a further meeting of the members of the partnership^F71] to consider any revised proposal the person who made the original proposal may make or, in a case falling within subsection (1)(b), [^F72and relating to the meeting of the members of the partnership, a further meeting of the members of the partnership^F72] to reconsider the original proposal.

[^F73(c)direct any person—

(i)to seek a decision from the partnership’s creditors (using a qualifying decision procedure) as to whether they approve any revised proposal the person who made the original proposal may make, or

(ii)in a case falling within subsection (1)(b) and relating to the relevant qualifying decision procedure, to seek a decision from the partnership’s creditors (using a qualifying decision procedure) as to whether they approve the original proposal.^F73]

(5) Where at any time after giving a direction under subsection (4)(b) [^F74or (c) in relation to^F74] a revised proposal the court is satisfied that the person who made the original proposal does not intend to submit a revised proposal, the court shall revoke the direction and revoke or suspend any decision approving the voluntary arrangement which has effect under section 4A.

(6) In a case where the court, on an application under this section with respect to any meeting [^F75or relevant qualifying decision procedure^F75] —

(a)gives a direction under subsection (4)(b) [^F76or (c)^F76] , or

(b)revokes or suspends an approval under subsection (4)(a) or (5),

the court may give such supplemental directions as it thinks fit, and, in particular, directions with respect to things done under the voluntary arrangement since it took effect.

(7) Except in pursuance of the preceding provisions of this section,

[^F77(a)^F77] a decision taken at a meeting [^F78of the members of the partnership^F78] summoned under section 3 is not invalidated by any irregularity at or in relation to the meeting [^F79, and

(b)a decision of the creditors of the partnership made in the relevant qualifying decision procedure is not invalidated by any irregularity in relation to the relevant qualifying decision procedure.^F79]

“6A. False representations, etc.

(1) If, for the purpose of obtaining the approval of the members or creditors of an insolvent partnership or of the members or creditors of any of its members to a proposal for a voluntary arrangement in relation to the partnership or any of its members, a person who is an officer of the partnership or an officer (which for this purpose includes a shadow director) of a corporate member in relation to which a voluntary arrangement is proposed—

(a)makes a false representation, or

(b)fraudulently does, or omits to do, anything,

he commits an offence.

(2) Subsection (1) applies even if the proposal is not approved.

(3) A person guilty of an offence under this section is liable to imprisonment or a fine, or both.

“7. Implementation of proposal

(1) This section applies where a voluntary arrangement has effect under section 4A.

(2) The person who is for the time being carrying out in relation to the voluntary arrangement the functions conferred—

(a)on the nominee by virtue of the approval [^F80of the voluntary arrangement by the members of the partnership or its creditors (or both) pursuant to^F80] section 3, or

(b)by virtue of section 2(5) or 4(2) on a person other than the nominee,

shall be known as the supervisor of the voluntary arrangement.

(3) If any of the partnership’s creditors or any other person is dissatisfied by any act, omission or decision of the supervisor, he may apply to the court; and on the application the court may—

(a)confirm, reverse or modify any act or decision of the supervisor,

(b)give him directions, or

(c)make such other order as it thinks fit.

(4) The supervisor—

(a)may apply to the court for directions in relation to any particular matter arising under the voluntary arrangement, and

(b)is included among the persons who may apply to the court for the winding up of the partnership as an unregistered company or for an administration order to be made in relation to it.

(5) The court may, whenever—

(a)it is expedient to appoint a person to carry out the functions of the supervisor, and

(b)it is inexpedient, difficult or impracticable for an appointment to be made without the assistance of the court,

make an order appointing a person who is qualified to act as an insolvency practitioner ^F81... in relation to the voluntary arrangement, either in substitution for the existing supervisor or to fill a vacancy.

(6) The power conferred by subsection (5) is exercisable so as to increase the number of persons exercising the functions of supervisor or, where there is more than one person exercising those functions, so as to replace one or more of those persons.

“7A. Prosecution of delinquent officers of partnership

(1) This section applies where a moratorium under section 1A has been obtained for an insolvent partnership or the approval of a voluntary arrangement in relation to an insolvent partnership has taken effect under section 4A or paragraph 36 of Schedule A1.

(2) If it appears to the nominee or supervisor that any past or present officer of the insolvent partnership has been guilty of any offence in connection with the moratorium or, as the case may be, voluntary arrangement for which such officer is criminally liable, the nominee or supervisor shall forthwith—

(a)report the matter to the Secretary of State, and

(b)provide the Secretary of State with such information and give 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 nominee or supervisor and relating to the matter in question) as the Secretary of State requires.

(3) Where a prosecuting authority institutes criminal proceedings following any report under subsection (2), the nominee or supervisor, and every officer and agent of the insolvent partnership past or present (other than the defendant), shall give the authority 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 insolvent partnership and any person employed by the insolvent partnership as auditor, whether that person is or is not an officer of the insolvent partnership,

• “prosecuting authority” means the Director of Public Prosecutions or the Secretary of State.

(4) The court may, on the application of the prosecuting authority, direct any person referred to in subsection (3) to comply with that subsection if he has failed to do so.

“7B. Arrangements coming to an end prematurely

For the purposes of this Part, a voluntary arrangement the approval of which has taken effect under section 4A or paragraph 36 of Schedule A1 comes to an end prematurely if, when it ceases to have effect, it has not been fully implemented in respect of all persons bound by the arrangement by virtue of section 5(2)(b)(i) or, as the case may be, paragraph 37(2)(b)(i) of Schedule A1”.

PART II Modified Provisions of Schedule A1 to the Act

The following provisions of Schedule A1 to the Act are modified so as to read as follows:

“3.—(1) An insolvent partnership meets the requirements of this paragraph if the qualifying conditions are met—

(a)in the year ending with the date of filing, or

(b)in the tax year of the insolvent partnership which ended last before that date.

(2) For the purposes of sub-paragraph (1) the qualifying conditions are met by an insolvent partnership in a period if, in that period, it satisfies two or more of the requirements set out in sub-paragraph (3).

(3) The qualifying conditions referred to in this paragraph are—

(a)turnover of not more than [^F82£5.6^F82] million,

(b)assets of not more than [^F83£2.8^F83] million, and

(c)no more than 50 employees.

(4) For the purposes of sub-paragraph (3)—

(a)the total of turnover is the amount which is or would be, as the case may be, entered as turnover in the partnership’s tax return,

(b)the total of assets is the amount which—

(i)in the case of the period referred to in paragraph 3(1)(a), is entered in the partnership’s statement of affairs which must be filed with the court under paragraph 7(1)(b), or

(ii)in the case of the period referred to in paragraph 3(1)(b), would be entered in the partnership’s statement of affairs had it prepared such a statement on the last day of the period to which the amount for turnover is calculated for the purposes of paragraph 3(4)(a),

(c)the number of employees is the average number of persons employed by the insolvent partnership—

(i)in the case of the period referred to in paragraph 3(1)(a), in the period ending with the date of filing,

(ii)in the case of the period referred to in paragraph 3(1)(b), in the period to which the amount for turnover is calculated for the purposes of paragraph 3(4)(a).

(5) Where the period covered by the qualifying conditions in respect of the insolvent partnership is not a year the total of turnover referred to in paragraph 3(3)(a) shall be proportionately adjusted.

(6) The average number of persons employed by the insolvent partnership shall be calculated as follows—

(a)by ascertaining the number of persons employed by it under contracts of service for each month of the year (whether throughout the month or not),

(b)by adding those figures together, and

(c)by dividing the resulting figure by the number of months during which persons were so employed by it during the year.

(7) In this paragraph—

“tax return” means a return under section 12AA of the Taxes Management Act 1970,

“tax year” means the 12 months beginning with 6th April in any year.

4.—(1) An insolvent partnership is excluded from being eligible for a moratorium if, on the date of filing—

(a) [^F84the partnership is in administration^F84] ,

(b)the insolvent partnership is being wound up as an unregistered company,

(c)there is an agricultural receiver of the insolvent partnership,

(d)a voluntary arrangement has effect in relation to the insolvent partnership,

(e)there is a provisional liquidator of the insolvent partnership,

(f)a moratorium has been in force for the insolvent partnership at any time during the period of 12 months ending with the date of filing and—

(i)no voluntary arrangement had effect at the time at which the moratorium came to an end, or

(ii)a voluntary arrangement which had effect at any time in that period has come to an end prematurely,

(g)a voluntary arrangement in relation to the insolvent partnership which had effect in pursuance of a proposal under section 1(3) has come to an end prematurely and, during the period of 12 months ending with the date of filing, an order under section 5(3)(a) has been made, or

(h)an order has been made by virtue of article 11 of the Insolvent Partnerships Order 1994.

(2) Sub-paragraph (1)(b) does not apply to an insolvent partnership which, by reason of a winding-up order made after the date of filing, is treated as being wound up on that date.

Effect on creditors, etc.

12.—(1) During the period for which a moratorium is in force for an insolvent partnership—

(a)no petition may be presented for the winding-up of the insolvent partnership as an unregistered company,

(b)no meeting of the members of the partnership may be called or requisitioned except with the consent of the nominee or the leave of the court and subject (where the court gives leave) to such terms as the court may impose,

(c)no order may be made for the winding-up of the insolvent partnership as an unregistered company,

[^F85(d) no administration application may be made in respect of the partnership,

(da)no administrator of the partnership may be appointed under paragraph 14 or 22 of Schedule B1,^F85]

(e)no agricultural receiver of the partnership may be appointed except with the leave of the court and subject to such terms as the court may impose,

(f)no landlord or other person to whom rent is payable may exercise any rights of forfeiture by peaceable re-entry in relation to premises forming part of the partnership property or let to one or more officers of the partnership in their capacity as such in respect of a failure by the partnership or one or more officers of the partnership to comply with any term or condition of the tenancy of such premises, except with the leave of the court and subject to such terms as the court may impose,

(g)no other steps may be taken to enforce any security over the partnership property, or to repossess goods in the possession, under any hire-purchase agreement, of one or more officers of the partnership in their capacity as such, except with the leave of the court and subject to such terms as the court may impose,

(h)no other proceedings and no execution or other legal process may be commenced or continued, and no distress may be levied, against the insolvent partnership or the partnership property except with the leave of the court and subject to such terms as the court may impose,

(i)no petition may be presented, and no order may be made, by virtue of article 11 of the Insolvent Partnerships Order 1994, and

(j)no application or order may be made under section 35 of the Partnership Act 1890 in respect of the insolvent partnership.

(2) Where a petition, other than an excepted petition, for the winding-up of the insolvent partnership has been presented before the beginning of the moratorium, section 127 shall not apply in relation to any disposition of partnership property, any transfer of an interest in the insolvent partnership or alteration in status of a member of the partnership made during the moratorium or at a time mentioned in paragraph 37(5)(a).

(3) Paragraph (a) of sub-paragraph (1) does not apply to an excepted petition and, where such a petition has been presented before the beginning of the moratorium or is presented during the moratorium, paragraphs (b) and (c) of that sub-paragraph do not apply in relation to proceedings on the petition.

(4) For the purposes of this paragraph, “excepted petition” means a petition under—

(a)article 7(1) of the Insolvent Partnerships Order 1994 presented by the Secretary of State on the grounds mentioned in subsections (b), (c) and (d) of section 124A of this Act,

(b)section 72 of the Financial Services Act 1986 on the ground mentioned in subsection (1)(b) of that section,

(c)section 92 of the Banking Act 1987 on the ground mentioned in subsection (1)(b) of that section, or

(d)section 367 of the Financial Services and Markets Act 2000 on the ground mentioned in subsection (3)(b) of that section.

Disposal of charged property, etc

20.—(1) This paragraph applies where—

(a)any partnership property of the insolvent partnership is subject to a security, or

(b)any goods are in possession of one or more officers of the partnership in their capacity as such under a hire-purchase agreement.

(2) If the holder of the security consents, or the court gives leave, the insolvent partnership may dispose of the property as if it were not subject to the security.

(3) If the owner of the goods consents, or the court gives leave, the insolvent partnership may dispose of the goods as if all rights of the owner under the hire-purchase agreement were vested in the members of the partnership.

(4) Where property subject to a security which, as created, was a floating charge is disposed of under sub-paragraph (2), the holder of the security has the same priority in respect of any partnership property directly or indirectly representing the property disposed of as he would have had in respect of the property subject to the security.

(5) Sub-paragraph (6) applies to the disposal under sub-paragraph (2) or (as the case may be) sub-paragraph (3) of—

(a)any property subject to a security other than a security which, as created, was a floating charge, or

(b)any goods in the possession of one or more officers of the partnership in their capacity as such under a hire-purchase agreement.

(6) It shall be a condition of any consent or leave under sub-paragraph (2) or (as the case may be) sub-paragraph (3) that—

(a)the net proceeds of the disposal, and

(b)where those proceeds are less than such amount as may be agreed, or 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,

shall be applied towards discharging the sums secured by the security or payable under the hire-purchase agreement.

(7) Where a condition imposed in pursuance of sub-paragraph (6) relates to two or more securities, that condition requires—

(a)the net proceeds of the disposal, and

(b)where paragraph (b) of sub-paragraph (6) applies, the sums mentioned in that paragraph,

to be applied towards discharging the sums secured by those securities in the order of their priorities.

(8) In this paragraph “floating charge” means a floating charge created under section 5 of the Agricultural Credits Act 1928.

Effect of approval of voluntary arrangement

37.—(1) This paragraph applies where a decision approving a voluntary arrangement has effect under paragraph 36.

(2) The approved voluntary arrangement—

(a)takes effect as if made by the members of the partnership at the [^F86time the creditors decided to approve the voluntary arrangement^F86] , and

(b)binds every person who in accordance with the rules—

(i)was entitled to vote [^F87in the qualifying decision procedure by which the creditors’ decision to approve the voluntary arrangement was made^F87] , or

(ii)would have been so entitled if he had had notice of [^F88the procedure^F88] ,

as if he were a party to the voluntary arrangement.

(3) If—

(a)when the arrangement ceases to have effect any amount payable under the arrangement to a person bound by virtue of sub-paragraph (2)(b)(ii) has not been paid, and

(b)the arrangement did not come to an end prematurely,

the insolvent partnership shall at that time become liable to pay to that person the amount payable under the arrangement.

(4) Where a petition for the winding-up of the insolvent partnership as an unregistered company or a petition by virtue of article 11 of the Insolvent Partnerships Order 1994, other than an excepted petition within the meaning of paragraph 12, was presented before the beginning of the moratorium, the court shall dismiss the petition.

(5) The court shall not dismiss a petition under sub-paragraph (4)—

(a)at any time before the end of the period of 28 days beginning with the first day on which each of the reports ^F89... required by paragraph 30(3) [^F90and (4)^F90] has been made to the court, or

(b)at any time when an application under paragraph 38 or an appeal in respect of such an application is pending, or at any time in the period within which such an appeal may be brought.

Challenge of actions of officers of insolvent partnership

40.—(1) This paragraph applies in relation to acts or omissions of the officers of a partnership during a moratorium.

(2) A creditor or member of the insolvent partnership may apply to the court for an order under this paragraph on the ground—

(a)that the partnership’s affairs and business and partnership property are being or have been managed by the officers of the partnership 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 (including at least the petitioner), or

(b)that any actual or proposed act or omission of the officers of the partnership is or would be so prejudicial.

(3) An application for an order under this paragraph may be made during or after the moratorium.

(4) On an application for an order under this paragraph the court may—

(a)make such order as it thinks fit for giving relief in respect of the matters complained of,

(b)adjourn the hearing conditionally or unconditionally, or

(c)make an interim order or any other order that it thinks fit.

(5) An order under this paragraph may in particular—

(a)regulate the management by the officers of the partnership of the partnership’s affairs and business and partnership property during the remainder of the moratorium,

(b)require the officers of the partnership to refrain from doing or continuing an act complained of by the petitioner, or to do an act which the petitioner has complained they have omitted to do,

(c)require the summoning of a meeting of ^F91... members of the partnership for the purpose of considering such matters as the court may direct,

[^F92(ca)require a decision of the partnership’s creditors to be sought (using a qualifying decision procedure) on such matters as the court may direct,^F92]

(d)bring the moratorium to an end and make such consequential provision as the court thinks fit.

(6) In making an order under this paragraph the court shall have regard to the need to safeguard the interests of persons who have dealt with the insolvent partnership in good faith and for value.

[^F93(7) Sub-paragraph (8) applies where—

(a)the appointment of an administrator has effect in relation to the insolvent partnership and the appointment took effect before the moratorium came into force, or

(b)the insolvent partnership is being wound up as an unregistered company or an order by virtue of article 11 of the Insolvent Partnerships Order 1994 has been made, in pursuance of a petition presented before the moratorium came into force.

(8) No application for an order under this paragraph may be made by a creditor or member of the insolvent partnership; but such an application may be made instead by the administrator (or as the case may be) the liquidator.^F93]

42.—(1) If, for the purpose of obtaining a moratorium, or an extension of a moratorium, for an insolvent partnership or any of its members (a moratorium meaning in the case of an individual the effect of an application for, or the making of, an interim order under Part VIII of the Act), a person who is an officer of an insolvent partnership or an officer (which for this purpose includes a shadow director) of a corporate member in relation to which a voluntary arrangement is proposed—

(a)makes any false representation, or

(b)fraudulently does, or omits to do, anything,

he commits an offence.

(2) Sub-paragraph (1) applies even if no moratorium or extension is obtained.

(3) A person guilty of an offence under this paragraph is liable to imprisonment or a fine, or both.”^F23] .

Article 6

[^F94SCHEDULE 2 MODIFIED PROVISIONS OF PART II OF, AND SCHEDULE B1 TO, THE ACT (ADMINISTRATION) AS APPLIED BY ARTICLE 6 _cross-notes

1. The following provisions of Schedule B1 and Schedule 1 to the Act are modified as follows.

2. Paragraph 2 is modified so as to read as follows—

“2. A person may be appointed as administrator of a partnership—

(a)by administration order of the court under paragraph 10,

(b)by the holder of an agricultural floating charge under paragraph 14, or

(c)by the members of the insolvent partnership in their capacity as such under paragraph 22.”.

3. Paragraph 7 is modified so as to read as follows—

“7. A person may not be appointed as administrator of a partnership which is in administration (subject to the provisions of paragraphs 90 to 93, 95 to 97, and 100 to 103 about replacement and additional administrators).”.

4. Paragraph 8 is modified so as to read as follows—

“8.—(1) A person may not be appointed as administrator of a partnership after—

(a)an order has been made in relation to it by virtue of Article 11 of the Insolvent Partnerships Order 1994; or

(b)an order has been made for it to be wound up by the court as an unregistered company.

(2) Sub-paragraph (1)(a) is subject to paragraph 38.

(3) Sub-paragraph (1)(b) is subject to paragraphs 37 and 38.”.

5. Paragraph 11 is modified so as to read as follows—

“11. The court may make an administration order in relation to a partnership only if satisfied—

(a)that the partnership is unable to pay its debts, and

(b)that the administration order is reasonably likely to achieve the purpose of administration.”.

6. Paragraph 12 is modified so as to read as follows—

“12.—(1) An application to the court for an administration order in respect of a partnership (“an administration application”) shall be by application in Form 1 in Schedule 9 to the Insolvent Partnerships Order 1994 and may be made only by—

(a)the members of the insolvent partnership in their capacity as such;

(b)one or more creditors of the partnership; or

(c)a combination of persons listed in paragraphs (a) and (b).

(2) As soon as is reasonably practicable after the making of an administration application the applicant shall notify—

(a)any person who has appointed an agricultural receiver of the partnership;

(b)any person who is or may be entitled to appoint an agricultural receiver of the partnership;

(c)any person who is or may be entitled to appoint an administrator of the partnership under paragraph 14; and

(d)such other persons as may be prescribed.

(3) An administration application may not be withdrawn without the permission of the court.

(4) In sub-paragraph (1) “creditor” includes a contingent creditor and a prospective creditor.

(5) Sub-paragraph (1) is without prejudice to section 7(4)(b).”.

7. Paragraph 14 is modified so as to read as follows—

“14.—(1) The holder of a qualifying agricultural floating charge in respect of partnership property may appoint an administrator of the partnership.

(2) For the purposes of sub-paragraph (1) an agricultural floating charge qualifies if created by an instrument which—

(a)states that this paragraph applies to the agricultural floating charge,

(b)purports to empower the holder of the agricultural floating charge to appoint an administrator of the partnership, [^F95or^F95]

(c)purports to empower the holder of the agricultural floating charge to make an appointment which would be the appointment of an agricultural receiver.

(3) For the purposes of sub-paragraph (1) a person is the holder of a qualifying agricultural floating charge in respect of partnership property if he holds one or more charges of the partnership secured—

(a)by a qualifying agricultural floating charge which relates to the whole or substantially the whole of the partnership property,

(b)by a number of qualifying agricultural floating charges which together relate to the whole or substantially the whole of the partnership property, or

(c)by charges and other forms of security which together relate to the whole or substantially the whole of the partnership property and at least one of which is a qualifying agricultural floating charge.”.

8. Paragraph 15 is modified so as to read as follows—

“15.—(1) A person may not appoint an administrator under paragraph 14 unless—

(a)he has given at least two business days' written notice to the holder of any prior agricultural floating charge which satisfies paragraph 14(2); or

(b)the holder of any prior agricultural floating charge which satisfies paragraph 14(2) has consented in writing to the making of the appointment.

[^F96(2) For the purposes of this paragraph, one agricultural floating charge is prior to another in accordance with the provisions of section 8(2) of the Agricultural Credits Act 1928”^F96] .

9. Paragraph 22 is modified so as to read as follows—

“22. The members of the insolvent partnership may appoint an administrator.”.

10. Paragraph 23 is modified so as to read as follows—

“23.—(1) This paragraph applies where an administrator of a partnership is appointed—

(a)under paragraph 22, or

(b)on an administration application made by the members of the partnership.

(2) An administrator of the partnership may not be appointed under paragraph 22 during the period of 12 months beginning with the date on which the appointment referred to in sub-paragraph (1) ceases to have effect.”.

11. Paragraph 26 is modified so as to read as follows—

“26.—(1) A person who proposes to make an appointment under paragraph 22 shall give at least five business days' written notice to—

(a)any person who is or may be entitled to appoint an agricultural receiver of the partnership, and

(b)any person who is or may be entitled to appoint an administrator of the partnership under paragraph 14.

(2) A person who proposes to make an appointment under paragraph 22 shall also give such notice as may be prescribed to such other persons as may be prescribed.

(3) A notice under this paragraph must—

(a)identify the proposed administrator, and

(b)be in Form 1A in Schedule 9 to the Insolvent Partnerships Order 1994.”.

12. Paragraph 27 is modified so as to read as follows—

“27.—(1) A person who gives notice of intention to appoint under paragraph 26 shall file with the court as soon as is reasonably practicable a copy of—

(a)the notice, and

(b)any document accompanying it.

(2) The copy filed under sub-paragraph (1) must be accompanied by a statutory declaration made by or on behalf of the person who proposes to make the appointment—

(a)that the partnership is unable to pay its debts,

(b)that the partnership is not in liquidation, and

(c)that, so far as the person making the statement is able to ascertain, the appointment is not prevented by paragraphs 23 to 25, and

(d)to such additional effect, and giving such information, as may be prescribed.

(3) A statutory declaration under sub-paragraph (2) must—

(a)be in the prescribed form, and

(b)be made during the prescribed period.

(4) A person commits an offence if in a statutory declaration under sub-paragraph (2) he makes a statement—

(a)which is false, and

(b)which he does not reasonably believe to be true.”.

13. Paragraph 29 is modified so as to read as follows—

“29.—(1) A person who appoints an administrator of a partnership under paragraph 22 shall file with the court—

(a)a notice of appointment, and

(b)such other documents as may be prescribed.

(2) The notice of appointment must include a statutory declaration by or on behalf of the person who makes the appointment—-

(a)that the person is entitled to make an appointment under paragraph 22,

(b)that the appointment is in accordance with this Schedule, and

(c)that, so far as the person making the statement is able to ascertain, the statements made, and information given in the statutory declaration filed with the notice of intention to appoint remain accurate.

(3) The notice of appointment must identify the administrator and must be accompanied by a statement by the administrator—

(a)that he consents to the appointment,

(b)that in his opinion the purpose of administration is reasonably likely to be achieved, and

(c)giving such other information and opinions as may be prescribed.

(4) For the purpose of a statement under sub-paragraph (3) an administrator may rely on information supplied by members of the partnership (unless he has reason to doubt its accuracy).

(5) The notice of appointment must be in Form 1B in Schedule 9 to the Insolvent Partnerships Order 1994 and any document accompanying it must be in the prescribed form.

(6) A statutory declaration under sub-paragraph (2) must be made during the prescribed period.

(7) A person commits an offence if in a statutory declaration under sub-paragraph (2) he makes a statement—

(a)which is false, and

(b)which he does not reasonably believe to be true.”.

14. Paragraph 35 is modified so as to read as follows—

“35.—(1) This paragraph applies where an administration application in respect of a partnership—

(a)is made by the holder of a qualifying agricultural floating charge in respect of the partnership property, and

(b)includes a statement that the application is made in reliance on this paragraph.

(2) The court may make an administration order—

(a)whether or not satisfied that the partnership is unable to pay its debts; but

(b)only if satisfied that the applicant could appoint an administrator under paragraph 14.”.

15. Paragraph 39 is modified so as to read as follows—

“39.—(1) Where there is an agricultural receiver of a partnership the court must dismiss an administration application in respect of the partnership unless—

(a)the person by or on behalf of whom the agricultural receiver was appointed consents to the making of the administration order,

(b)the court thinks that the security by virtue of which the agricultural receiver was appointed would be liable to be released or discharged under sections 238 to 240 (transaction at undervalue and preference) if an administration order were made, or

(c)the court thinks that the security by virtue of which the agricultural receiver was appointed would be avoided under section 245 (avoidance of floating charge) if an administration order were made.

(2) Sub-paragraph (1) applies whether the agricultural receiver is appointed before or after the making of the administration application.”.

16. Paragraph 41 is modified so as to read as follows—

“41.—(1) When an administration order takes effect in respect of a partnership any agricultural receiver of the partnership shall vacate office.

(2) Where a partnership is in administration, any receiver of part of the partnership property shall vacate office if the administrator requires him to.

(3) Where an agricultural receiver vacates office under sub-paragraph (1) or (2), his remuneration shall be charged on and paid out of any partnership property which was in his custody or under his control immediately before he vacated office.

(4) In the application of sub-paragraph (3)—

(a)“remuneration” includes expenses properly incurred and any indemnity to which the agricultural receiver is entitled out of the partnership property,

(b)the charge imposed takes priority over security held by the person by whom or on whose behalf the agricultural receiver was appointed, and

(c)the provision for payment is subject to paragraph 43.”.

17. Paragraph 42 is modified so as to read as follows—

“42.—(1) This paragraph applies to a partnership in administration.

(2) No order may be made for the winding up of the partnership.

(3) No order may be made by virtue of Article 11 of the Insolvent Partnerships Order 1994 in respect of the partnership.

(4) No order may be made under section 35 of the Partnership Act 1890 in respect of the partnership.

(5) Sub-paragraph (2) does not apply to an order made on a petition presented under—

(a)section 124A(public interest); or

(b)section 367 of the Financial Services and Markets Act 2000 (c. 8) [^F97(winding-up petitions)^F97] .

(6) If a petition presented under a provision referred to in sub-paragraph (5) comes to the attention of the administrator, he shall apply to the court for directions under paragraph 63.”.

18. Paragraph 43 is modified so as to read as follows—

“43.—(1) This paragraph applies to a partnership in administration.

(2) No step may be taken to enforce security over the partnership property except—

(a)with the consent of the administrator, or

(b)with the permission of the court.

(3) No step may be taken to repossess goods in the partnership’s possession under a hire-purchase agreement except—

(a)with the consent of the administrator, or

(b)with the permission of the court.

(4) A landlord may not exercise a right of forfeiture by peaceable re-entry in relation to premises forming part of the partnership property or let to one or more officers of the partnership in their capacity as such except—

(a)with the consent of the administrator, or

(b)with the permission of the court.

(5) No legal process (including legal proceedings, execution, distress and diligence) may be instituted or continued against the partnership or partnership property except—

(a)with the consent of the administrator, or

(b)with the permission of the court.

(6) An agricultural receiver of the partnership may not be appointed.

(7) Where the court gives permission for a transaction under this paragraph it may impose a condition on or a requirement in connection with the transaction.

(8) In this paragraph “landlord” includes a person to whom rent is payable.”.

19. Paragraph 47 is modified so as to read as follows—

“47.—(1) As soon as is reasonably practicable after appointment the administrator of a partnership shall by notice in the prescribed form require one or more relevant persons to provide the administrator with a statement of the affairs of the partnership.

(2) The statement must—

(a)be verified by a statement of truth in accordance with Civil Procedure Rules,

(b)be in the prescribed form,

(c)give particulars of the partnership property, debts and liabilities,

(d)give the names and addresses of the creditors of the partnership,

(e)specify the security held by each creditor,

(f)give the date on which each security was granted, and

(g)contain such other information as may be prescribed.

(3) In sub-paragraph (1) “relevant person” means—

(a)a person who is or has been an officer of the partnership,

(b)a person who took part in the formation of the partnership during the period of one year ending with the date on which the partnership enters administration,

(c)a person employed by the partnership during that period, and

(d)a person who is or has been during that period an officer or employee of a partnership which is or has been during that year an officer of the partnership.

(4) For the purpose of sub-paragraph (3) a reference to employment is a reference to employment through a contract of employment or a contract for services.”.

20. Paragraph 49 is modified so as to read as follows—

“49.—(1) The administrator of a partnership shall make a statement setting out proposals for achieving the purpose of administration.

(2) A statement under sub-paragraph (1) must, in particular—

(a)deal with such matters as may be prescribed, and

(b)where applicable, explain why the administrator thinks that the objective mentioned in paragraph 3(1)(a) or (b) cannot be achieved.

(3) Proposals under this paragraph may include a proposal for a voluntary arrangement under Part I of this Act (although this paragraph is without prejudice to section 4(3)).

(4) The administrator shall send a copy of the statement of his proposals—

(a)to the court,

(b)to every creditor of the partnership [^F98, other than an opted-out creditor,^F98] of whose claim and address he is aware, and

(c)to every member of the partnership of whose address he is aware.

(5) The administrator shall comply with sub-paragraph (4)—

(a)as soon as is reasonably practicable after the partnership enters administration, and

(b)in any event, before the end of the period of eight weeks beginning with the day on which the partnership enters administration.

(6) The administrator shall be taken to comply with sub-paragraph (4)(c) if he publishes in the prescribed manner a notice undertaking to provide a copy of the statement of proposals free of charge to any member of the partnership who applies in writing to a specified address.

(7) An administrator commits an offence if he fails without reasonable excuse to comply with sub-paragraph (5).

(8) A period specified in this paragraph may be varied in accordance with paragraph 107.”.

21. Paragraph 52 is modified so as to read as follows—

“52.—(1) Paragraph 51(1) shall not apply where the statement of proposals states that the administrator thinks—

(a)that the partnership has sufficient property to enable each creditor of the partnership to be paid in full,

(b)that the partnership has insufficient property to enable a distribution to be made to unsecured creditors, or

(c)that neither of the objectives specified in paragraph 3(1)(a) and (b) can be achieved.

(2) But the administrator shall [^F99seek a decision from the partnership’s creditors as to whether they approve the proposals set out in the statement made under paragraph 49(1) if requested to do so^F99] —

(a)by creditors of the partnership whose debts amount to at least 10 per cent of the total debts of the partnership,

(b)in the prescribed manner, and

(c)in the prescribed period.

[^F100(3) Where a decision is sought by virtue of sub-paragraph (2) the initial decision date (as defined in paragraph 51(3)) must be within the prescribed period.^F100]

(4) The period prescribed under sub-paragraph (3) may be varied in accordance with paragraph 107.”.

22. Paragraph 61 is modified so as to read as follows—

“61. The administrator of a partnership—

(a)may prevent any person from taking part in the management of the partnership business, and

(b)may appoint any person to be a manager of that business.”.

23. Paragraph 65 is modified so as to read as follows—

“65.—(1) The administrator of a partnership may make a distribution to a creditor of the partnership.

(2) [^F101Section 175(1), (1A), (1B), and (3) and section 176AZA^F101] shall apply in relation to a distribution under this paragraph as it applies in relation to a winding up.

(3) A payment may not be made by way of distribution under this paragraph to a creditor of the partnership who is neither secured nor preferential unless the court gives permission.”.

24. Paragraph 69 is modified so as to read as follows:—

“69.—(1) Subject to sub-paragraph (2) below, in exercising his function under this Schedule the administrator of a partnership acts as the agent of the members of the partnership in their capacity as such.

(2) An officer of the partnership shall not, unless he otherwise consents, be personally liable for the debts and obligations of the partnership incurred during the period when the partnership is in administration.”.

25. Paragraph 73 is modified so as to read as follows—

“73.—(1) An administrator’s statement of proposals under paragraph 49 may not include any action which—

(a)affects the right of a secured creditor of the partnership to enforce his security,

(b)would result in a preferential debt of the partnership being paid otherwise than in priority to its non-preferential debts, ^F102...

[^F103(bb)would result in an ordinary preferential debt of the partnership being paid otherwise than in priority to any secondary preferential debts that it may have,^F103]

(c)would result in one preferential creditor of the partnership being paid a smaller proportion of [^F104an ordinary preferential debt^F104] than another ^F105[^F106...

(d)would result in one preferential creditor of the partnership being paid a smaller proportion of a secondary preferential debt than another^F106] [^F107or

(e)the company is a relevant financial institution (see section 387A), any non-preferential debt is to be paid otherwise than in accordance with the rules in section 176AZA(2) or (3).^F107]

(2) Sub-paragraph (1) does not apply to—

(a)action to which the relevant creditor consents, or

(b)a proposal for a voluntary arrangement under Part I of this Act (although this sub-paragraph is without prejudice to section 4(3)).

(3) The reference to a statement of proposals in sub-paragraph (1) includes a reference to a statement as revised or modified.”.

26. Paragraph 74 is modified so as to read as follows—

“74.—(1) A creditor or member of a partnership in administration may apply to the court claiming that—

(a)the administrator is acting or has acted so as unfairly to harm the interests of the applicant (whether alone or in common with some or all other members or creditors), or

(b)the administrator proposes to act in a way which would unfairly harm the interests of the applicant (whether alone or in common with some or all other members or creditors).

(2) A creditor or member of a partnership in administration may apply to the court claiming that the administrator is not performing his functions as quickly or as efficiently as is reasonably practicable.

(3) The court may—

(a)grant relief;

(b)dismiss the application;

(c)adjourn the hearing conditionally or unconditionally;

(d)make an interim order;

(e)make any other order it thinks appropriate.

(4) In particular, an order under this paragraph may—

(a)regulate the administrator’s exercise of his functions;

(b)require the administrator to do or not do a specified thing;

[^F108(c) require a decision of the partnership’s creditors to be sought on a matter;^F108]

(d)provide for the appointment of an administrator to cease to have effect;

(e)make consequential provision.

(5) An order may be made on a claim under sub-paragraph (1) whether or not the action complained of—

(a)is within the administrator’s powers under that Schedule;

(b)was taken in reliance on an order under paragraph 71 or 72.

(6) An order may not be made under this paragraph if it would impede or prevent the implementation of—

(a)a voluntary arrangement approved under Part I, or

(b)proposals or a revision approved under paragraph 53 or 54 more than 28 days before the day on which the application for the order under this paragraph is made.”.

27. Omit paragraph 83.

28. Paragraph 84 is modified so as to read as follows—

“84.—(1) If the administrator of a partnership thinks that the partnership has no property which might permit a distribution to its creditors, he shall file a notice to that effect with the court.

(2) The court may on the application of the administrator of a partnership disapply sub-paragraph (1) in respect of the partnership.

(3) On the filing of a notice in respect of a partnership under sub-paragraph (1) the appointment of an administrator of the partnership shall cease to have effect.

(4) If an administrator files a notice under sub-paragraph (1) he shall as soon as is reasonably practicable send a copy of the notice to each creditor of whose claim and address he is aware.

(5) At the end of the period of three months beginning with the date of filing of a notice in respect of a partnership under sub-paragraph (1) the partnership is deemed to be dissolved.

(6) On an application in respect of a partnership by the administrator or another interested person the court may—

(a)extend the period specified in sub-paragraph (5);

(b)suspend that period; or

(c)disapply sub-paragraph (5).

(7) An administrator commits an offence if he fails without reasonable excuse to comply with sub-paragraph (4).”.

29. Paragraph 87 is modified to read as follows—

“87.—(1) An administrator may resign only in prescribed circumstances.

(2) Where an administrator may resign he may do so only—

(a)in the case of an administrator appointed by administration order, by notice in writing to the court,

(b)in the case of an administrator appointed under paragraph 14, by notice in writing to the holder of the agricultural floating charge by virtue of which the appointment was made, or

(c)in the case of an administrator appointed under paragraph 22, by notice in writing to the members of the insolvent partnership.”.

30. Paragraph 89 is modified so as to read as follows—

“89.—(1) The administrator of a partnership shall vacate office if he ceases to be qualified to act as an insolvency practitioner in relation to the partnership.

(2) Where an administrator vacates office by virtue of sub-paragraph (1) he shall give notice in writing—

(a)in the case of an administrator appointed by administration order, to the court,

(b)in the case of an administrator appointed under paragraph 14, to the holder of the agricultural floating charge by virtue of which the appointment was made, or

(c)in the case of an administrator appointed under paragraph 22, to the members of the insolvent partnership.

(3) An administrator who fails without reasonable excuse to comply with sub-paragraph (2) commits an offence.”.

31. Paragraph 90 is modified so as to read as follows—

“90. Paragraphs 91 to 93 and 95 apply where an administrator—

(a)dies

(b)resigns

(c)is removed from office under paragraph 88, or

(d)vacates office under paragraph 89.”.

32. Paragraph 91 is modified so as to read as follows—

“91.—(1) Where the administrator was appointed by administration order, the court may replace the administrator on an application under this sub-paragraph made by—

(a)a creditors' committee of the partnership,

(b)the members of the partnership,

(c)one or more creditors of the partnership, or

(d)where more than one person was appointed to act jointly or concurrently as the administrator, any of those persons who remains in office.

(2) But an application may be made in reliance on sub-paragraph (1)(b) and (c) only where—

(a)there is no creditors' committee of the partnership,

(b)the court is satisfied that the creditors' committee or a remaining administrator is not taking reasonable steps to make a replacement, or

(c)the court is satisfied that for another reason it is right for the application to be made.”.

33. Paragraph 93 is modified so as to read as follows—

“93.—(1) Where the administrator was appointed under paragraph 22 by the members of the partnership they may replace the administrator.

(2) A replacement under this paragraph may be made only—

(a)with the consent of each person who is the holder of a qualifying agricultural floating charge in respect of the partnership property, or

(b)where consent is withheld, with the permission of the court.”.

34. Omit paragraph 94.

35. Paragraph 95 is modified so as to read as follows—

“95. The court may replace an administrator on the application of a person listed in paragraph 91(1) if the court—

(a)is satisfied that a person who is entitled to replace the administrator under any of paragraphs 92 and 93 is not taking reasonable steps to make a replacement, or

(b)that for another reason it is right for the court to make the replacement.”.

36. Paragraph 96 is modified so as to read as follows—

“96.—(1) This paragraph applies where an administrator of a partnership is appointed under paragraph 14 by the holder of a qualifying agricultural floating charge in respect of the partnership property.

(2) The holder of a prior qualifying agricultural floating charge in respect of the partnership property may apply to the court for the administrator to be replaced by an administrator nominated by the holder of the prior agricultural floating charge.

(3) One agricultural floating charge is prior to another for the purposes of this paragraph if—

(a)it was created first, or

(b)it is to be treated as having priority in accordance with an agreement to which the holder of each agricultural floating charge was party.”.

37. Paragraph 97 is modified so as to read as follows—

“97.—(1) This paragraph applies where—

(a)an administrator of a partnership is appointed by the members of the partnership under paragraph 22, and

(b)there is no holder of a qualifying agricultural floating charge in respect of the partnership property.

[^F109(2) The administrator may be replaced by a decision of the creditors made by a qualifying decision procedure.

(3) The decision has effect only if, before the decision is made, the new administrator has consented to act in writing ”.^F109]

38. Paragraph 103 is modified so as to read as follows—

“103.—(1) Where a partnership is in administration, a person may be appointed to act as administrator jointly or concurrently with the person or persons acting as the administrator of the partnership.

(2) Where a partnership entered administration by administration order, an appointment under sub-paragraph (1) must be made by the court on the application of—

(a)a person or group listed in paragraph 12(1)(a) to (c), or

(b)the person or persons acting as the administrator of the partnership.

(3) Where a partnership entered administration by virtue of an appointment under paragraph 14, an appointment under sub-paragraph (1) must be made by—

(a)the holder of the agricultural floating charge by virtue of which the appointment was made, or

(b)the court on the application of the person or persons acting as the administrator of the partnership.

(4) Where a partnership entered administration by virtue of an appointment under paragraph 22, an appointment under sub-paragraph (1) above must be made either by the court on the application of the person or persons acting as the administrator of the partnership or—

(a)by the members of the partnership, and

(b)with the consent of each person who is the holder of a qualifying agricultural floating charge in respect of the partnership property or, where consent is withheld, with the permission of the court.

(5) An appointment under sub-paragraph (1) may be made only with the consent of the person or persons acting as the administrator of the partnership.”.

39. Omit paragraph 105.

40. Paragraph 106 is modified so as to read as follows—

“106.—(1) A person who is guilty of an offence under this Schedule is liable to a fine (in accordance with section 430 and Schedule 10).

(2) A person who is guilty of an offence under any of the following paragraphs of this Schedule is liable to a daily default fine (in accordance with section 430 and Schedule 10)—

(a)paragraph 20,

(b)paragraph 32,

(c)paragraph 46,

(d)paragraph 48,

(e)paragraph 49,

(f)paragraph 51,

(g)paragraph 53,

(h)paragraph 54,

(i)paragraph 56,

(j)paragraph 78,

(k)paragraph 80,

(l)paragraph 84, and

(m)paragraph 89.”.

41. Paragraph 111 is modified so as to read as follows—

“111.—(1) In this Schedule—

“administrator” has the meaning given by paragraph 1 and, where the context requires, includes a reference to a former administrator,

“agricultural floating charge” means a charge which is an agricultural floating charge on its creation,

^F110...

^F110...

“enters administration” has the meaning given by paragraph 1,

“in administration” has the meaning given by paragraph 1,

“hire-purchase agreement” includes a conditional sale agreement, a chattel leasing agreement and a retention of title agreement,

“holder of a qualifying agricultural floating charge” in respect of partnership property has the meaning given by paragraph 14,

“market value” means the amount which would be realised on a sale of property in the open market by a willing vendor,

“the purpose of administration” means an objective specified in paragraph 3, and

“unable to pay its debts” has the meaning given by sections 222, 223, and 224.

(2) A reference in this Schedule to a thing in writing includes a reference to a thing in electronic form.

(3) In this Schedule a reference to action includes a reference to inaction.”.

42. Omit paragraphs 112–116.

43. Schedule 1 is modified to read as follows:—

Paragraph 60 of Schedule B1

“SCHEDULE 1 POWERS OF ADMINISTRATOR

1. Power to take possession of, collect and get in the partnership property and, for that purpose, to take such proceedings as may seem to him expedient.

2. Power to sell or otherwise dispose of the partnership property by public auction or private auction or private contract or, in Scotland, to sell, feu, hire out or otherwise dispose of the partnership property by public roup or private bargain.

3. Power to raise or borrow money and grant security therefor over the partnership property.

4. Power to appoint a solicitor or accountant or other professionally qualified person to assist him in the performance of his functions.

5. Power to bring or defend any action or other legal proceedings in the name and on behalf of any member of the partnership in his capacity as such or of the partnership.

6. Power to refer to arbitration any question affecting the partnership.

7. Power to effect and maintain insurances in respect of the partnership business and property.

8. Power to do all acts and execute, in the name and on behalf of the partnership or of any member of the partnership in his capacity as such, any deed, receipt or other document.

9. Power to draw, accept, make and endorse any bill of exchange or promissory note in the name and on behalf of any member of the partnership in his capacity as such or of the partnership.

10. Power to appoint any agent to do any business which he is unable to do himself or which can more conveniently be done by an agent and power to employ and dismiss employees.

11. Power to do all such things (including the carrying out of works) as may be necessary for the realisation of the partnership property.

12. Power to make any payment which is necessary or incidental to the performance of his functions.

13. Power to carry on the business of the partnership.

14. Power to establish subsidiary undertakings of the partnership.

15. Power to transfer to subsidiary undertakings of the partnership the whole or any part of the business of the partnership or of the partnership property.

16. Power to grant or accept a surrender of a lease or tenancy of any of the partnership property, and to take a lease or tenancy of any property required or convenient for the business of the partnership.

17. Power to make any arrangement or compromise on behalf of the partnership or of its members in their capacity as such.

18. Power to rank and claim in the bankruptcy, insolvency, sequestration or liquidation of any person indebted to the partnership and to receive dividends, and to accede to trust deeds for the creditors of any such person.

19. Power to present or defend a petition for the winding up of the partnership under the Insolvent Partnerships Order 1994.

20. Power to do all other things incidental to the exercise of the foregoing powers.”^F94] .

Article 7

case SCHEDULE 3 PROVISIONS OF THE ACT WHICH APPLY WITH MODIFICATIONS FOR THE PURPOSES OF ARTICLE 7 TO WINDING UP OF INSOLVENT PARTNERSHIP ON PETITION OF CREDITOR ETC. WHERE NO CONCURRENT PETITION PRESENTED AGAINST MEMBER

PART I MODIFIED PROVISIONS OF PART V OF THE ACT _I20

1. Sections 220 to 223 of the Act are set out as modified in Part I of this Schedule, and sections 117, 131, 133, 234 and Schedule 4 are set out as modified in Part II.

Section 220: Meaning of “unregistered company”_I21

case2. Section 220 is modified so as to read as follows:—

“220. For the purposes of this Part, the expression “unregistered company” includes any insolvent partnership.”.

Section 221: Winding up of unregistered companies_I22

3. Section 221 is modified so as to read as follows:—

“221.—(1) Subject to subsections (2) and (3) below and to the provisions of this Part, any insolvent partnership may be wound up under this Act if it has, or at any time had, in England and Wales either—

(a)a principal place of business, or

(b)a place of business at which business is or has been carried on in the course of which the debt (or part of the debt) arose which forms the basis of the petition for winding up the partnership.

(2) Subject to subsection (3) below, an insolvent partnership shall not be wound up under this Act if the business of the partnership has not been carried on in England and Wales at any time in the period of 3 years ending with the day on which the winding-up petition is presented.

(3) If an insolvent partnership has a principal place of business situated in Scotland or in Northern Ireland, the court shall not have jurisdiction to wind up the partnership unless it had a principal place of business in England and Wales—

(a)in the case of a partnership with a principal place of business in Scotland, at any time in the period of 1 year, or

(b)in the case of a partnership with a principal place of business in Northern Ireland, at any time in the period of 3 years,

ending with the day on which the winding-up petition is presented.

[^F111(3A) The preceding subsections are subject to Article 3 of the EC Regulation (jurisdiction under the EC Regulation).^F111]

(4) No insolvent partnership shall be wound up under this Act voluntarily.

(5) To the extent that they are applicable to the winding up of a company by the court in England and Wales on the petition of a creditor or of the Secretary of State, all the provisions of this Act and the Companies Act about winding up apply to the winding up of an insolvent partnership as an unregistered company—

(a)with the exceptions and additions mentioned in the following subsections of this section and in section 221A, and

(b)with the modifications specified in Part II of Schedule 3 to the Insolvent Partnerships Order 1994.

(6) Sections 73(1), 74(2)(a) to (d) and (3), 75 to 78, 83, 122, 123, [^F112176A,^F112] 202, 203, 205 and 250 shall not apply.

(7) The circumstances in which an insolvent partnership may be wound up as an unregistered company are as follows—

(a)if the partnership 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 partnership is unable to pay its debts;

(c)if the court is of the opinion that it is just and equitable that the partnership should be wound up.

[^F113(d)at the time at which a moratorium for the insolvent partnership under section 1A comes to an end, no voluntary arrangement approved under Part I of this Act has effect in relation to the insolvent partnership.

(7A) A winding-up petition on the ground set out in section 221(7)(d) may only be presented by one or more creditors.^F113]

(8) Every petition for the winding up of an insolvent partnership under Part V of this Act shall be verified by affidavit in Form 2 in Schedule 9 to the Insolvent Partnerships Order 1994.

Petition by liquidator, administrator, trustee or supervisor to wind up insolvent partnership as unregistered company

221A.—(1) A petition in Form 3 in Schedule 9 to the Insolvent Partnerships Order 1994 for winding up an insolvent partnership may be presented by—

(a)the liquidator or administrator of a corporate member or of a former corporate member, or

(b)the administrator of the partnership, or

(c)the trustee of an individual member's, or of a former individual member's, estate, or

(d)the supervisor of a voluntary arrangement approved under Part I of this Act in relation to a corporate member or the partnership, or under Part VIII of this Act in relation to an individual member,

if the ground of the petition is one of the circumstances set out in section 221(7).

(2) In this section “petitioning insolvency practitioner” means a person who has presented a petition under subsection (1).

(3) If the ground of the petition presented under subsection (1) is that the partnership is unable to pay its debts and the petitioning insolvency practitioner is able to satisfy the court that an insolvency order has been made against the member whose liquidator or trustee he is because of that member’s inability to pay a joint debt, that order shall, unless it is proved otherwise to the satisfaction of the court, be proof for the purposes of section 221(7) that the partnership is unable to pay its debts.

(4) Where a winding-up petition is presented under subsection (1), the court may appoint the petitioning insolvency practitioner as provisional liquidator of the partnership under section 135 (appointment and powers of provisional liquidator).

(5) Where a winding-up order is made against an insolvent partnership after the presentation of a petition under subsection (1), the court may appoint the petitioning insolvency practitioner as liquidator of the partnership; and where the court makes an appointment under this subsection, section 140(3) (official receiver not to become liquidator) applies as if an appointment had been made under that section.

(6) Where a winding-up petition is presented under subsection (1), in the event of the partnership property being insufficient to satisfy the costs of the petitioning insolvency practitioner the costs may be paid out of the assets of the corporate or individual member, as the case may be, as part of the expenses of the liquidation, administration, bankruptcy or voluntary arrangement of that member, in the same order of priority as expenses properly chargeable or incurred by the practitioner in getting in any of the assets of the member.”.

Section 222: Inability to pay debts: unpaid creditor for £750 or more_I23

4. Section 222 is modified so as to read as follows:—

“222.—(1) An insolvent partnership 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 partnership is indebted in a sum exceeding £750 then due and—

(a)the creditor has served on the partnership, in the manner specified in subsection (2) below, a written demand in the prescribed form requiring the partnership to pay the sum so due, and

(b)the partnership has for 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) Service of the demand referred to in subsection (1)(a) shall be effected—

(a)by leaving it at a principal place of business of the partnership in England and Wales, or

(b)by leaving it at a place of business of the partnership in England and Wales at which business is carried on in the course of which the debt (or part of the debt) referred to in subsection (1) arose, or

(c)by delivering it to an officer of the partnership, or

(d)by otherwise serving it in such manner as the court may approve or direct.

(3) The money sum for the time being specified 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 in which the winding-up petition was presented before the coming into force of the increase.”.

Section 223: Inability to pay debts: debt remaining unsatisfied after action brought_I24

5. Section 223 is modified so as to read as follows:—

“223.—(1) An insolvent partnership 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 partnership, or from him in his character of member, and—

(a)notice in writing of the institution of the action or proceeding has been served on the partnership in the manner specified in subsection (2) below, and

(b)the partnership 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 the defendant 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.

(2) Service of the notice referred to in subsection (1)(a) shall be effected—

(a)by leaving it at a principal place of business of the partnership in England and Wales, or

(b)by leaving it at a place of business of the partnership in England and Wales at which business is carried on in the course of which the debt or demand (or part of the debt or demand) referred to in subsection (1) arose, or

(c)by delivering it to an officer of the partnership, or

(d)by otherwise serving it in such manner as the court may approve or direct.”.

PART II OTHER MODIFIED PROVISIONS OF THE ACT ABOUT WINDING UP BY THE COURT

Section 117: High Court and county court jurisdiction_I25

6. Section 117 is modified so as to read as follows:—

“117.—(1) Subject to subsections (3) and (4) below, the High Court has jurisdiction to wind up any insolvent partnership as an unregistered company by virtue of article 7 of the Insolvent Partnerships Order 1994 if the partnership has, or at any time had, in England and Wales either—

(a)a principal place of business, or

(b)a place of business at which business is or has been carried on in the course of which the debt (or part of the debt) arose which forms the basis of the petition for winding up the partnership.

(2) Subject to subsections (3) and (4) below, a petition for the winding up of an insolvent partnership by virtue of the said article 7 may be presented to a county court in England and Wales if the partnership has, or at any time had, within the insolvency district of that court either—

(a)a principal place of business, or

(b)a place of business at which business is or has been carried on in the course of which the debt (or part of the debt) arose which forms the basis of the winding-up petition.

(3) Subject to subsection (4) below, the court only has jurisdiction to wind up an insolvent partnership if the business of the partnership has been carried on in England and Wales at any time in the period of 3 years ending with the day on which the petition for winding it up is presented.

(4) If an insolvent partnership has a principal place of business situated in Scotland or in Northern Ireland, the court shall not have jurisdiction to wind up the partnership unless it had a principal place of business in England and Wales—

(a)in the case of a partnership with a principal place of business in Scotland, at any time in the period of 1 year, or

(b)in the case of a partnership with a principal place of business in Northern Ireland, at any time in the period of 3 years,

ending with the day on which the petition for winding it up is presented.

(5) The Lord Chancellor [^F114may, with the concurrence of the Lord Chief Justice, by order^F114] 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).

(6) 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.

[^F115(7) This section is subject to Article 3 of the EC Regulation (jurisdiction under the EC Regulation).^F115]

[^F116(8) The Lord Chief Justice may nominate a judicial office holder (as defined in section 109(4) of the Constitutional Reform Act 2005) to exercise his functions under this section.”^F116] .

Section 131: Statement of affairs of insolvent partnership_I26

7. Section 131 is modified so as to read as follows:—

“131.—(1) Where the court has, by virtue of article 7 of the Insolvent Partnerships Order 1994, made a winding-up order or appointed a provisional liquidator in respect of an insolvent partnership, 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 partnership.

(2) The statement shall be verified by affidavit by the persons required to submit it and shall show—

(a)particulars of the debts and liabilities of the partnership and of the partnership property;

(b)the names and addresses of the partnership’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 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 partnership;

(b)those who have taken part in the formation of the partnership at any time within one year before the relevant date;

(c)those who are in the employment of the partnership, 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 partnership.

(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, extend the period so mentioned;

and where the official receiver has refused to exercise a power conferred by this subsection, 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—

(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.”.

Section 133: Public examination of officers of insolvent partnerships_I27

8. Section 133 is modified so as to read as follows:—

“133.—(1) Where an insolvent partnership is being wound up by virtue of article 7 of the Insolvent Partnerships Order 1994, the official receiver may at any time before the winding up is complete apply to the court for the public examination of any person who—

(a)is or has been an officer of the partnership; or

(b)has acted as liquidator or administrator of the partnership 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 formation of the partnership.

(2) Unless the court otherwise orders, the official receiver shall make an application under subsection (1) if he is requested in accordance with the rules to do so by one-half, in value, of the creditors of the partnership.

(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 formation or management of the partnership or as to the conduct of its business and affairs, or his conduct or dealings in relation to the partnership.

(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 partnership;

(c)any person who has been appointed as special manager of the partnership’s property or business;

(d)any creditor of the partnership who has tendered a proof in the winding up.”.

[^F117Sections 165 and 167

8A. —(1) Section 165(2) has effect as if for “Parts 1 to 3” there were substituted “Parts 1 and 2”.

(2) Section 167(1) has effect as if for “Parts 1 to 3” there were substituted “Parts 1 and 2”. ^F117]

Section 234: Getting in the partnership property_{cross-notesI28,I29}

9. Section 234 is modified so as to read as follows:—

“234.—(1) This section applies where, by virtue of article 7 of the Insolvent Partnerships Order 1994—

(a)an insolvent partnership is being wound up, or

(b)a provisional liquidator of an insolvent partnership is appointed;

and “the office-holder” means the liquidator or the provisional liquidator, as the case may be.

(2) Any person who is or has been an officer of the partnership, or who is an executor or administrator of the estate of a deceased officer of the partnership, shall deliver up to the office-holder, for the purposes of the exercise of the office-holder’s functions under this Act and (where applicable) the Company Directors Disqualification Act 1986(11), possession of any partnership property which he holds for the purposes of the partnership.

(3) Where any person has in his possession or control any property, books, papers or records to which the partnership 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 or as the court may direct.

(4) Where the office-holder—

(a)seizes or disposes of any property which is not partnership property, 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.

(5) 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.”.

10. Schedule 4 is modified so as to read as follows:—

Section 167

“SCHEDULE 4 POWERS OF LIQUIDATOR IN A WINDING UP

PART I ^F118...

1. Power to pay any class of creditors in full.

2. Power to make any compromise or arrangement with creditors or persons claiming to be creditors, or having or alleging themselves to have any claim (present or future, certain or contingent, ascertained or sounding only in damages) against the partnership, or whereby the partnership may be rendered liable.

3. Power to compromise, on such terms as may be agreed—

(a)all debts and liabilities capable of resulting in debts, and all claims (present or future, certain or contingent, ascertained or sounding only in damages) subsisting or supposed to subsist between the partnership and a contributory or alleged contributory or other debtor or person apprehending liability to the partnership, and

(b)all questions in any way relating to or affecting the partnership property or the winding up of the partnership,

and take any security for the discharge of any such debt, liability or claim and give a complete discharge in respect of it.

[^F1193A. Power to bring legal proceedings under section 213, 214, 238, 239 or 423^F119]

4. Power to bring or defend any action or other legal proceeding in the name and on behalf of any member of the partnership in his capacity as such or of the partnership.

5. Power to carry on the business of the partnership so far as may be necessary for its beneficial winding up.

PART II ^F120...

6. Power to sell any of the partnership property by public auction or private contract, with power to transfer the whole of it to any person or to sell the same in parcels.

7. Power to do all acts and execute, in the name and on behalf of the partnership or of any member of the partnership in his capacity as such, all deeds, receipts and other documents.

8. Power to prove, rank and claim in the bankruptcy, insolvency or sequestration of any contributory for any balance againt his estate, and to receive dividends in the bankruptcy, insolvency or sequestration in respect of that balance, as a separate debt due from the bankrupt or insolvent, and rateably with the other separate creditors.

9. Power to draw, accept, make and endorse any bill of exchange or promissory note in the name and on behalf of any member of the partnership in his capacity as such or of the partnership, with the same effect with respect to the liability of the partnership or of ny member of the partnership in his capacity as such as if the bill or note had been drawn, accepted, made or endorsed in the course of the partnership’s business.

10. Power to raise on the security of the partnership property any money requisite.

11. Power to take out in his official name letters of administration to any deceased contributory, and to do in his official name any other act necessary for obtaining payment of any money due from a contributory or his estate which cannot conveniently be done in the name of the partnership. In all such cases the money due is deemed, for the purpose of enabling the liquidator to take out the letters of administration or recover the money, to be due to the liquidator himself.

12. Power to appoint an agent to do any business which the liquidator is unable to do himself.

13. Power to do all such other things as may be necessary for winding up the partnership’s affairs and distributing its property.”.

Article 8

case SCHEDULE 4 PROVISIONS OF THE ACT WHICH APPLY WITH MODIFICATIONS FOR THE PURPOSES OF ARTICLE 8 TO WINDING UP OF INSOLVENT PARTNERSHIP ON CREDITOR'S PETITION WHERE CONCURRENT PETITIONS ARE PRESENTED AGAINST ONE OR MORE MEMBERS

PART I MODIFIED PROVISIONS OF PART V OF THE ACT _I30

1.—(1) Sections 220 to 222 of the Act are set out as modified in Part I of this Schedule, and the provisions of the Act specified in sub-paragraph (2) below are set out as modified in Part II.

(2) The provisions referred to in sub-paragraph (1) are sections 117, 122 to 125, 131, 133, 136, 137, 139 to 141, 143, 146, 147, 168, 172, 174, 175, 189, 211, 230, 231, 234 264, 265, 267, 268, 271, 283, [^F121283A^F121] , 284, 288, 292 to 296, 298 to 303, 305, [^F121313A^F121] , 314, 328, 331 and 356, and Schedule 4.

Section 220: Meaning of “unregistered company”_I31

2. Section 220 is modified so as to read as follows—

“220. For the purposes of this Part, the expression “unregistered company” includes any insolvent partnership.”.

Section 221: Winding up of unregistered companies_I32

3. Section 221 is modified so as to read as follows—

“221.—(1) Subject to subsections (2) and (3) below and to the provisions of this Part, any insolvent partnership may be wound up under this Act if it has, or at any time had, in England and Wales either—

(a)a principal place of business, or

(b)a place of business at which business is or has been carried on in the course of which the debt (or part of the debt) arose which forms the basis of the petition for winding up the partnership.

(2) Subject to subsection (3) below, an insolvent partnership shall not be wound up under this Act if the business of the partnership has not been carried on in England and Wales at any time in the period of 3 years ending with the day on which the winding-up petition is presented.

(3) If an insolvent partnership has a principal place of business situated in Scotland or in Northern Ireland, the court shall not have jurisdiction to wind up the partnership unless it had a principal place of business in England and Wales—

(a)in the case of a partnership with a principal place of business in Scotland, at any time in the period of 1 year, or

(b)in the case of a partnership with a principal place of business in Northern Ireland at any time in the period of 3 years,

ending with the day on which the winding-up petition is presented.

[^F122(3A) The preceding subsections are subject to Article 3 of the EC Regulation (jurisdiction under the EC Regulation).^F122]

(4) No insolvent partnership shall be wound up under this Act voluntarily.

(5) To the extent that they are applicable to the winding up of a company by the court in England and Wales on a creditor’s petition, all the provisions of this Act and the Companies Act about winding up apply to the winding up of an insolvent partnership as an unregistered company—

(a)with the exceptions and additions mentioned in the following subsections of this section, and

(b)with the modifications specified in Part II of Schedule 4 to the Insolvent Partnerships Order 1994.

(6) Sections 73(1), 74(2)(a) to (d) and (3), 75 to 78, 83, 154, [^F123176A,^F123] 202, 203, 205 and 250 shall not apply.

(7) Unless the contrary intention appears, a member of a partnership against whom a insolvency order has been made by virtue of article 8 of the Insolvent Partnerships Order 1994 shall not be treated as a contributory for the purposes of this Act.

[^F124(8) The circumstances in which an insolvent partnership may be wound up as an unregistered company are as follows—

(a)the partnership is unable to pay its debts,

(b)at the time at which a moratorium for the insolvent partnership under section 1A comes to an end, no voluntary arrangement approved under Part I of this Act has effect in relation to the insolvent partnership.^F124]

(9) Every petition for the winding up of an insolvent partnership under Part V of this Act shall be verified by affidavit in Form 2 in Schedule 9 to the Insolvent Partnerships Order 1994.”.

Section 222: Inability to pay debts: unpaid creditor for £750 or more_I33

4. Section 222 is modified so as to read as follows—

“222.—(1) An insolvent partnership 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 partnership is indebted in a sum exceeding £750 then due and—

(a)the creditor has served on the partnership, in the manner specified in subsection (2) below, a written demand in Form 4 in Schedule 9 to the Insolvent Partnerships Order 1994 requiring the partnership to pay the sum so due,

(b)the creditor has also served on any one or more members or former members of the partnership liable to pay the sum due (in the case of a corporate member by leaving it at its registered office and in the case of an individual member by serving it in accordance with the rules) a demand in Form 4 in Schedule 9 to that Order, requiring that member or those members to pay the sum so due, and

(c)the partnership and its members have for 3 weeks after the service of the demands, or the service of the last of them if served at different times, neglected to pay the sum or to secure or compound for it to the creditor’s satisfaction.

(2) Service of the demand referred to in subsection (1)(a) shall be effected—

(a)by leaving it at a principal place of business of the partnership in England and Wales, or

(b)by leaving it at a place of business of the partnership in England and Wales at which business is carried on in the course of which the debt (or part of the debt) referred to in subsection (1) arose, or

(c)by delivering it to an officer of the partnership, or

(d)by otherwise serving it in such manner as the court may approve or direct.

(3) The money sum for the time being specified 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 in which the winding-up petition was presented before the coming into force of the increase.”.

PART II OTHER MODIFIED PROVISIONS OF THE ACT ABOUT WINDING UP BY THE COURT AND BANKRUPTCY OF INDIVIDUALS

Sections 117 and 265: High Court and county court jurisdiction_I34

5. Sections 117 and 265 are modified so as to read as follows—

“117.—(1) Subject to the provisions of this section, the High Court has jurisdiction to wind up any insolvent partnership as an unregistered company by virtue of article 8 of the Insolvent Partnerships Order 1994 if the partnership has, or at any time had, in England and Wales either—

(a)a principal place of business, or

(b)a place of business at which business is or has been carried on in the course of which the debt (or part of the debt) arose which forms the basis of the petition for winding up the partnership.

(2) Subject to subsections (3) and (4) below, a petition for the winding up of an insolvent partnership by virtue of the said article 8 may be presented to a county court in England and Wales if the partnership has, or at any time had, within the insolvency district of that court either—

(a)a principal place of business, or

(b)a place of business at which business is or has been carried on in the course of which the debt (or part of the debt) arose which forms the basis of the winding-up petition

(3) Subject to subsection (4) below, the court only has jurisdiction to wind up an insolvent partnership if the business of the partnership has been carried on in England and Wales at any time in the period of 3 years ending with the day on which the petition for winding it up is presented.

(4) If an insolvent partnership has a principal place of business situated in Scotland or in Northern Ireland, the court shall not have jurisdiction to wind up the partnership unless it had a principal place of business in England and Wales—

(a)in the case of a partnership with a principal place of business in Scotland, at any time in the period of 1 year, or

(b)in the case of a partnership with a principal place of business in Northern Ireland at any time in the period of 3 years,

ending with the day on which the petition for winding it up is presented.

(5) Subject to subsection (6) below, the court has jurisdiction to wind up a corporate member or former corporate member, or make a bankruptcy order against an individual member or former individual member, of a partnership against which a petition has been presented by virtue of article 8 of the Insolvent Partnerships Order 1994 if it has jurisdiction in respect of the partnership.

(6) Petitions by virtue of the said article 8 for the winding up of an insolvent partnership and the bankruptcy of one or more members or former members of that partnership may not be presented to a district registry of the High Court.

(7) The Lord Chancellor [^F125may, with the concurrence of the Lord Chief Justice, by order^F125] 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).

(8) 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.

[^F126(9) This section is subject to Article 3 of the EC Regulation (jurisdiction under the EC Regulation)^F126]

[^F127(10) The Lord Chief Justice may nominate a judicial office holder (as defined in section 109(4) of the Constitutional Reform Act 2005) to exercise his functions under this section”^F127] .

Circumstances in which members of insolvent partnerships may be wound up or made bankrupt by the court: Section 122 corporate member Section 267 individual member_I35

6

(a).Section 122 is modified so as to read as follows—

[^F128“122. A corporate member or former corporate member of an insolvent partnership may be wound up by the court if—

(a)it is unable to pay its debts,

(b)there is a creditor, by assignment or otherwise, to whom the insolvent partnership is indebted and the corporate member or former corporate member is liable in relation to that debt and at the time at which a moratorium for the insolvent partnership under section 1A comes to an end, no voluntary arrangement approved under Part I of this Act has effect in relation to the insolvent partnership.”^F128] .

(b).Section 267 is modified so as to read as follows—

“267.—(1) Where a petition for the winding up of an insolvent partnership has been presented to the court by virtue of article 8 of the Insolvent Partnerships Order 1994, a creditor’s petition against any individual member or former individual member of that partnership by virtue of that article must be in respect of one or more joint debts owed by the insolvent partnership, and the petitioning creditor or each of the petitioning creditors must be a person to whom the debt or (as the case may be) at least one of the debts is owed.

(2) Subject to [^F129subsection (2A) below and^F129] section 268, a creditor’s petition may be presented to the court in respect of a joint debt or debts only if, at the time the petition is presented—

(a)the amount of the debt, or the aggregate amount of the debts, is equal to or exceed the bankruptcy level,

(b)the debt, or each of the debts, is for a liquidated sum payable to the petitioning creditor, or one or more of the petitioning creditors, immediately, and is unsecured,

(c)the debt, or each of the debts, is a debt for which the individual member or former member is liable and which he appears to be unable to pay, and

(d)there is no outstanding application to set aside a statutory demand served (under section 268 below) in respect of the debt or any of the debts.

[^F130(2A) A creditor’s petition may be presented to the court in respect of a joint debt or debts if at the time at which a moratorium for the insolvent partnership under section 1A comes to an end, no voluntary arrangement approved under Part I of this Act has effect in relation to the insolvent partnership.^F130]

(3) “The bankruptcy level” is [^F131£5,000^F131] ; but the Secretary of State may by order in a statutory instrument substitute any amount specified in the order for that amount or (as th case may be) for the amount which by virtue of such an order is for the time being the mount of the bankruptcy level.

(4) An order shall not be made under subsection (3) unless a draft of it has been laid before, and approved by a resolution of, each House of Parliament.”.

Definition of inability to pay debts: Section 123-corporate member Section 268 individual member_I36

7

(a).Section 123 is modified so as to read as follows—

“123.—(1) A corporate member or former member is deemed unable to pay its debts if there is a creditor, by assignment or otherwise, to whom the partnership is indebted in a sum exceeding £750 then due for which the member or former member is liable and—

(a)the creditor has served on that member or former member and the partnership, in the manner specified in subsection (2) below, a written demand in Form 4 in Schedule 9 to the Insolvent Partnerships Order 1994 requiring that member or former member and the partnership to pay the sum so due, and

(b)the corporate member or former member and the partnership have for 3 weeks after the service of the demands, or the service of the last of them if served at different times neglected to pay the sum or to secure or compound for it to the creditor’s satisfaction

(2) Service of the demand referred to in subsection (1)(a) shall be effected, in th case of the corporate member or former corporate member, by leaving it at its registere office, and, in the case of the partnership—

(a)by leaving it at a principal place of business of the partnership in England and Wales, or

(b)by leaving it at a place of business of the partnership in England and Wales at which business is carried on in the course of which the debt (or part of the debt) referred to in subsection (1) arose, or

(c)by delivering it to an officer of the partnership, or

(d)by otherwise serving it in such manner as the court may approve or direct.

(3) The money sum for the time being specified in subsection (1) is subject to increase or reduction by order under section 416 in Part XV.”.

(b).Section 268 is modified so as to read as follows—

“268.—(1) For the purposes of section 267(2)(c), an individual member or former individual member appears to be unable to pay a joint debt for which he is liable if the debt is payable immediately and the petitioning creditor to whom the insolvent partnership owes the joint debt has served—

(a)on the individual member or former individual member in accordance with the rules a demand (known as “the statutory demand”), in Form 4 in Schedule 9 to the Insolvent Partnerships Order 1994, and

(b)on the partnership in the manner specified in subsection (2) below a demand (known as “the written demand”) in the same form,

requiring the member or former member and the partnership to pay the debt or to secure or compound for it to the creditor’s satisfaction, and at least 3 weeks have elapsed since the service of the demands, or the service of the last of them if served at different times, and neither demand has been complied with nor the demand against the member set aside in accordance with the rules.

(2) Service of the demand referred to in subsection (1)(b) shall be effected—

(a)by leaving it at a principal place of business of the partnership in England and Wales, or

(b)by leaving it at a place of business of the partnership in England and Wales at which business is carried on in the course of which the debt (or part of the debt) referred to in subsection (1) arose, or

(c)by delivering it to an officer of the partnership, or

(d)by otherwise serving it in such manner as the court may approve or direct.”.

Sections 124 and 264: Applications to wind up insolvent partnership and to wind up or bankrupt insolvent member_I37

8. Sections 124 and 264 are modified so as to read as follows—

“124.—(1) An application to the court by virtue of article 8 of the Insolvent Partnerships Order 1994 for the winding up of an insolvent partnership as an unregistered company and the winding up or bankruptcy (as the case may be) of at least one of its members or former members shall—

(a)in the case of the partnership, be by petition in Form 5 in Schedule 9 to that Order,

(b)in the case of a corporate member or former corporate member, be by petition in Form 6 in that Schedule, and

(c)in the case of an individual member or former individual member, be by petition in Form 7 in that Schedule.

(2) Each of the petitions mentioned in subsection (1) may be presented by [^F132a liquidator (within the meaning of Article 2(b) of the EC Regulation) appointed in proceedings by virtue of Article 3(1) of the EC Regulation, a temporary administrator (within the meaning of Article 38 of the EC Regulation) or^F132] any creditor or creditors to whom the partnership and the member or former member in question is indebted in respect of a liquidated sum payable immediately.

(3) The petitions mentioned in subsection (1)—

(a)shall all be presented to the same court and, except as the court otherwise permits or directs, on the same day, and

(b)except in the case of the petition mentioned in subsection (1)(c), shall be advertised in Form 8 in the said Schedule 9.

(4) At any time after presentation of a petition under this section the petitioner may, with the leave of the court obtained on application and on such terms as it thinks just, add other members or former members of the partnership as parties to the proceedings in relation to the insolvent partnership.

(5) Each petition presented under this section shall contain particulars of other petitions being presented in relation to the partnership, identifying the partnership and members concerned.

(6) The hearing of the petition against the partnership fixed by the court shall be in advance of the hearing of any petition against an insolvent member.

(7) On the day appointed for the hearing of the petition against the partnership, the petitioner shall, before the commencement of the hearing, hand to the court Form 9 in Schedule 9 to the Insolvent Partnerships Order 1994, duly completed.

(8) Any member of the partnership or any person against whom a winding-up or bankruptcy petition has been presented in relation to the insolvent partnership is entitled to appear and to be heard on any petition for the winding up of the partnership.

(9) A petitioner under this section may at the hearing withdraw a petition if—

(a)subject to subsection (10) below, he withdraws at the same time every other petitio which he has presented under this section; and

(b)he gives notice to the court at least 3 days before the date appointed for the hearing of the relevant petition of his intention to withdraw the petition.

(10) A petitioner need not comply with the provisions of subsection (9)(a) in the case of a petition against an insolvent member if the court is satisfied on application made to it by the petitioner that, because of difficulties in serving the petition or for any other reason, the continuance of that petition would be likely to prejudice or delay the proceedings on the petition which he has presented against the partnership or on any petition which he has presented against any other insolvent member.

(11) Where notice is given under subsection (9)(b), the court may, on such terms as it thinks just, substitute as petitioner, both in respect of the partnership and in respect of each insolvent member against whom a petition has been presented, any creditor of the partnership who in its opinion would have a right to present the petitions, and if the court makes such a substitution the petitions in question will not be withdrawn.

(12) Reference in subsection (11) to substitution of a petitioner includes reference to change of carriage of the petition in accordance with the rules.”.

Sections 125 and 271: Powers of court on hearing of petitions against insolvent partnership and members_I38

9. Sections 125 and 271 are modified so as to read as follows—

“125.—(1) Subject to the provisions of section 125A, on hearing a petition under section 124 against an insolvent partnership or any of its insolvent members, the court may dismiss it, or adjourn the hearing conditionally or unconditionally or make any other order that it thinks fit; but the court shall not refuse to make a winding-up order against the partnership or a corporate member on the ground only that the partnership property or (as the case may be) the member’s assets have been mortgaged to an amount equal to or in excess of that property or those assets, or that the partnership has no property or the member no assets.

(2) An order under subsection (1) in respect of an insolvent partnership may contain directions as to the future conduct of any insolvency proceedings in existence against any insolvent member in respect of whom an insolvency order has been made.

Hearing of petitions against members

125A.—(1) On the hearing of a petition against an insolvent member the petitioner shall draw the court’s attention to the result of the hearing of the winding-up petition against the partnership and the following subsections of this section shall apply.

(2) If the court has neither made a winding-up order, nor dismissed the winding-up petition, against the partnership the court may adjourn the hearing of the petition against the member until either event has occurred.

(3) Subject to subsection (4) below, if a winding-up order has been made against the partnership, the court may make a winding-up order against the corporate member in respect of which, or (as the case may be) a bankruptcy order against the individual member in respect of whom, the insolvency petition was presented.

(4) If no insolvency order is made under subsection (3) against any member within 2 days of the making of the winding-up order against the partnership, the proceedings against the partnership shall be conducted as if the winding-up petition against the partnership had been presented by virtue of article 7 of the Insolvent Partnerships Order 1994 and the proceedings against any member shall be conducted under this Act without the modifications made by that Order (other than the modifications made to sections 168 and 303 by article 14).

(5) If the court has dismissed the winding-up petition against the partnership, the court may dismiss the winding-up petition against the corporate member or (as the case may be) the bankruptcy petition against the individual member.However, if an insolvency order is made against a member, the proceedings against that member shall be conducted under this Act without the modifications made by the Insolvent Partnerships Order 1994 (other than the modifications made to sections 168 and 303 of this Act by article 14 of that Order).

(6) The court may dismiss a petition against an insolvent member if it considers it just to do so because of a change in circumstances since the making of the winding-up order against the partnership.

(7) The court may dismiss a petition against an insolvent member who is a limited partner, if—

(a)the member lodges in court for the benefit of the creditors of the partnership sufficient money or security to the court’s satisfaction to meet his liability for the debts and obligations of the partnership; or

(b)the member satisfies the court that he is no longer under any liability in respect of the debts and obligations of the partnership.

(8) Nothing in sections 125 and 125A or in sections 267 and 268 prejudices the power of the court, in accordance with the rules, to authorise a creditor’s petition to be amended by the omission of any creditor or debt and to be proceeded with as if things done for the purpses of those sections had been done only by or in relation to the remaining creditors or debts.”.

Sections 131 and 288: Statements of affairs Insolvent partnerships; corporate members; individual members_I39

10. Sections 131 and 288 are modified so as to read as follows—

“131.—(1) This section applies where the court has, by virtue of article 8 of the Insolvent Partnerships Order 1994—

(a)made a winding-up order or appointed a provisional liquidator in respect of an insolvent partnership, or

(b)made a winding-up order or appointed a provisional liquidator in respect of any corporate member of that partnership, or

(c)made a bankruptcy order in respect of any individual member of that partnership.

(2) The official receiver may require some or all of the persons mentioned in subsection (4) below to make out and submit to him a statement as to the affairs of the partnership or member in the prescribed form.

(3) The statement shall be verified by affidavit by the persons required to submit it and shall show—

(a)particulars of the debts and liabilities of the partnership or of the member (as the case may be), and of the partnership property and member’s assets;

(b)the names and addresses of the creditors of the partnership or of the member (as the case may be);

(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 or as the official receiver may require.

(4) The persons referred to in subsection (2) are—

(a)those who are or have been officers of the partnership;

(b)those who are or have been officers of the corporate member;

(c)those who have taken part in the formation of the partnership or of the corporate member at any time within one year before the relevant date;

(d)those who are in the employment of the partnership or of the corporate member, or have been in such employment within that year, and are in the official receiver’s opinion capable of giving the information required;

(e)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 partnership or an officer of the corporate member.

(5) 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.

(6) The official receiver, if he thinks fit, may—

(a)at any time release a person from an obligation imposed on him under subsection (2) or (3) above; or

(b)either when giving the notice mentioned in subsection (5) or subsequently, extend the period so mentioned;

and where the official receiver has refused to exercise a power conferred by this sub section, the court, if it thinks fit, may exercise it.

(7) 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.

(8) Any person who without reasonable excuse fails to comply with any obligation imposed under this section (other than, in the case of an individual member, an obligation in respect of his own statement of affairs), is liable to a fine and, for continued contravention, to a daily default fine.

(9) An individual member who without reasonable excuse fails to comply with any obligation imposed under this section in respect of his own statement of affairs, is guilty of a contempt of court and liable to be punished accordingly (in addition to any other punishment to which he may be subject).”.

Section 133: Public examination of officers of insolvent partnerships_I40

11. Section 133 is modified so far as insolvent partnerships are concerned so as to read as follows—

“133.—(1) Where an insolvent partnership is being wound up by virtue of article 8 of the Insolvent Partnerships Order 1994, the official receiver may at any time before the winding up is complete apply to the court for the public examination of any person who—

(a)is or has been an officer of the partnership; or

(b)has acted as liquidator or administrator of the partnership or as receiver or manager or, in Scotland, receiver of its property;

(c)not being a person falling within paragraph (a) or (b), is or has been concerned, or has taken part, in the formation of the partnership.

(2) Unless the court otherwise orders, the official receiver shall make an application under subsection (1) if he is requested in accordance with the rules to do so by one-half, in value, of the creditors of the partnership.

(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 formation or management of the partnership or as to the conduct of its business and affairs, or his conduct or dealings in relation to the partnership.

(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 partnership;

(c)any person who has been appointed as special manager of the partnership’s property or business;

(d)any creditor of the partnership who has tendered a proof in the winding up.

(5) On an application under subsection (1), the court may direct that the public examination of any person under this section in relation to the affairs of an insolvent partnership be combined with the public examination of any person under this Act in relation to the affairs of a corporate member of that partnership against which, or an individual member of the partnership against whom, an insolvency order has been made.”.

Sections 136, 293 and 294: Functions of official receiver in relation to office of responsible insolvency practitioner_I41

12. Sections 136, 293 and 294 are modified so as to read as follows—

“136.—(1) The following provisions of this section ^F133... have effect, subject to section 140 below, where insolvency orders are made in respect of an insolvent partnership and one or more of its insolvent members by virtue of article 8 of the Insolvent Partnerships Order 1994.

(2) The official receiver, by virtue of his office, becomes the responsible insolvency practitioner of the partnership and of any insolvent member and continues in office until another person becomes responsible insolvency practitioner under the provisions of this Part.

(3) The official receiver is, by virtue of his office, the responsible insolvency practitioner of the partnership and of any insolvent member during any vacancy.

(4) At any time when he is the responsible insolvency practitioner of the insolvent partnership and of any insolvent member, the official receiver may [^F134in accordance with the rules seek nominations from^F134] the creditors of the partnership and the creditors of such member, for the purpose of choosing a person to be responsible insolvency practitioner in place of the official receiver.

[^F135(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 insolvency order was made, to decide whether to exercise his power under subsection (4), 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 creditors of the partnership and of the creditors of any insolvent member against whom an insolvency order has been made, and

(c)(whether or not he has decided to exercise that power) to exercise his power under subsection (4) if he is at any time requested, in accordance with the rules, to do so by one-quarter, in value, of either—

(i)the partnership’s creditors, or

(ii)the creditors of any insolvent member against whom an insolvency order has been made,

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 creditors must contain an explanation of the creditors’ power under subsection (5)(c) to require the official receiver to seek nominations from the creditors of the partnership and of any insolvent member.^F135]

Duty of official receiver to summon meetings

^F136136A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .”.

Sections 137, 295, 296 and 300: Appointment of responsible insolvency practitioner by Secretary of State_I42

13. Sections 137, 295, 296 and 300 are modified so as to read as follows—

“137.—(1) This section and the next apply where the court has made insolvency orders in respect of an insolvent partnership and one or more of its insolvent members by virtue of article 8 of the Insolvent Partnerships Order 1994.

(2) The official receiver may, at any time when he is the responsible insolvency practitioner of the partnership and of any insolvent member, apply to the Secretary of State for the appointment of a person as responsible insolvency practitioner of both the partnership and of such member in his place.

(3) If [^F137a nomination is sought from the creditors of the partnership and of any insolvent member^F137] , but no person is chosen to be responsible insolvency practitioner [^F138by the creditors^F138] , it is the duty of the official receiver to decide whether to refer the need for an appointment to the Secretary of State.