Companies Act 2006, section 901A

Application of this Part

PART 26A Arrangements and reconstructions: companies in financial difficulty

(1)The provisions of this Part apply where conditions A and B are met in relation to a company.

(2)Condition A is that the company has encountered, or is likely to encounter, financial difficulties that are affecting, or will or may affect, its ability to carry on business as a going concern.

(3)Condition B is that—

(a)a compromise or arrangement is proposed between the company and—

(i)its creditors, or any class of them, or

(ii)its members, or any class of them, and

(b)the purpose of the compromise or arrangement is to eliminate, reduce or prevent, or mitigate the effect of, any of the financial difficulties mentioned in subsection (2).

(4)In this Part—

  • “arrangement” includes a reorganisation of the company’s share capital by the consolidation of shares of different classes or by the division of shares into shares of different classes, or by both of those methods;

  • “company”—

    (a)

    in section 901J (powers of court to facilitate reconstruction or amalgamation) means a company within the meaning of this Act, and

    (b)

    elsewhere in this Part means any company liable to be wound up under the Insolvency Act 1986 or the Insolvency (Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19)).

(5)The provisions of this Part have effect subject to Part 27 (mergers and divisions of public companies) where that Part applies (see sections 902 and 903).

Read section 901A in the full Act → Definitions (3) Cases (62)

Definitions used in section 901A

company

“company” means a company formed and registered under this Act, that is—

(a)

a company so formed and registered after the commencement of this Part, or

(b)

a company that immediately before the commencement of this Part—

(i)

was formed and registered under the Companies Act 1985 (c. 6) or the Companies (Northern Ireland) Order 1986 (S.I. 1986/1032 (N.I. 6)), or

(ii)

was an existing company for the purposes of that Act or that Order,

(which is to be treated on commencement as if formed and registered under this Act).

Defined in s.1(1) · see it in the full Act

(4) In this section and that Schedule “company” includes any body corporate.

Defined in s.1159(4) · see it in the full Act
member

(2) In sub-paragraph (1) “member” has the same meaning as it has by virtue of section 7(1) of that Act .

Defined in Sch.2 Pt.1 · see it in the full Act
share

(1) In the Companies Acts “share”, in relation to a company, means share in the company's share capital.

Defined in s.540(1) · see it in the full Act

Cases considering section 901A (62)

Strategic Value Capital Solutions Master Fund LP & Ors v AGPS BondCo PLC

[2024] EWCA Civ 24 · 23 January 2024Interprets

The threshold conditions restrict restructuring plans to companies facing actual or likely financial difficulties affecting their ability to continue as a going concern, unlike schemes available to solvent companies. (see para [7]) Provisionally, 'compromise or arrangement' carries the established Part 26 meaning and requires compensating advantage. Identical statutory wording supplies no power to confiscate shares or extinguish debts without compensation. (see paras [265]; [270]; [272])

TG Jones High Street Limited, Re

[2026] EWHC 2079 (Ch) · 5 August 2026

Applies the requirement that the plan companies and affected persons fall within the statutory company and creditor categories. The requirement was plainly satisfied. Defines Condition A by requiring financial difficulties affecting or potentially affecting the company's ability to continue as a going concern. The companies' imminent insolvency satisfied the condition. Applies the requirement that the purpose of the compromise or arrangement is to eliminate, reduce, prevent or mitigate the effect of the financial difficulties. The Plans satisfied this requirement. Applies the statutory company and creditor conditions for the restructuring-plan jurisdiction. The court found the relevant status conditions satisfied.

NFE Global Holdings Limited & Anor, Re

[2026] EWHC 1620 (Ch) · 18 June 2026

The court found that condition A was satisfied because the companies had encountered financial difficulties affecting or potentially affecting their ability to continue as going concerns. The court found that condition B was satisfied because the plans were intended to eliminate, reduce, prevent or mitigate the companies’ financial difficulties.

42 more judgments, and what each says about section 901A, are in the case-law panel in the full Act.

Amendments and notes

2 notes from legislation.gov.uk

Modifications

  1. C1317Ss. 901A-901J applied (with modifications) by S.I. 2009/1804, reg. 45A (as inserted (26.6.2020) by The Limited Liability Partnerships (Amendment etc.) Regulations 2020 (S.I. 2020/643), reg. 1(1), Sch. 3 para. 3 (which amending S.I. is revoked (16.2.2021) by S.I. 2021/60, reg. 1(1), 2))
  2. C1318Ss. 901A-901J applied (with modifications) (16.2.2021) by S.I. 2009/1804, reg. 45A (as inserted by The Limited Liability Partnerships (Amendment etc.) Regulations 2021 (S.I. 2021/60), reg. 1(1), Sch. 3 para. 3 (with reg. 4(2)))