Insolvency Act 1986, Schedule B1, paragraph 42

SCHEDULE B1 ADMINISTRATION

42(1)This paragraph applies to a company in administration.

(2)No resolution may be passed for the winding up of the company.

(3)No order may be made for the winding up of the company.

(4)Sub-paragraph (3) does not apply to an order made on a petition presented under—

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

[F1303 (aa)section 124B (SEs),F1303]

(b)section 367 of the Financial Services and Markets Act 2000 (c. 8) (petition by [F1304 Financial Conduct Authority or Prudential Regulation AuthorityF1304] ).

(5)If a petition presented under a provision referred to in sub-paragraph (4) comes to the attention of the administrator, he shall apply to the court for directions under paragraph 63.

Definitions used in Schedule B1, paragraph 42 4

the company

2 Section 233B does not apply in relation to a contract for the supply of goods or services to a company (“the company”) where any of paragraphs 3 to 11 applies.

Defined in Sch.4ZZA para.2 · see it in the full Act
company

(1A) In this Schedule, “company” means—

(a)a company registered under the Companies Act 2006 in England and Wales or Scotland,

(b)a company incorporated in an EEA State ..., or

(c)a company not incorporated in an EEA State but having its centre of main interests in a member State (other than Denmark) or in the United Kingdom .

Defined in Sch.B1 para.111(1A) · see it in the full Act
in administration

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

Defined in Sch.B1 para.111(1) · see it in the full Act

(a) a company is “in administration” while the appointment of an administrator of the company has effect,

Defined in Sch.B1 para.1(2) · see it in the full Act
administrator

1 (1) For the purposes of this Act “administrator” of a company means a person appointed under this Schedule to manage the company’s affairs, business and property.

Defined in Sch.B1 para.1(1) · see it in the full Act

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

Defined in Sch.B1 para.111(1) · see it in the full Act

Cases considering Schedule B1, paragraph 42 11

Promontoria (Chestnut) Ltd v Craig & Anor

[2017] EWHC 2405 (Ch) · 31 August 2017

Recognises the administrators’ discretion concerning a receiver’s vacation of office, but the exercise of that discretion was assessed against the secured creditor’s interests and the rationality of the decision (see paras [27], [49]-[51]).

Lavin & Ors v Swindell

[2012] EWHC 2398 (Ch) · 23 August 2012Limits

The court interpreted the provision as preventing a winding-up order while the company remained in administration. The administration therefore had to be terminated before the winding-up order could be made. (see para [73])

Business Dream Ltd, Re Insolvency Act 1986

[2011] EWHC 2860 (Ch) · 2 November 2011Disapplies

Applied through paragraph 44 to prohibit a winding-up resolution during the interim moratorium. The members’ resolution was therefore invalid. Applied to the members’ resolution for voluntary liquidation. Because the paragraph 44 moratorium was in force, no such resolution could validly be passed.

What each judgment says about Schedule B1, paragraph 42 is in the case-law panel in the full Act.

Amendments and notes

7 notes from legislation.gov.uk

Amendments

  1. F1303Sch. B1 para. 42(4)(aa) inserted (8.10.2004) by The European Public Limited-Liability Company Regulations 2004 (S.I. 2004/2326), reg. 73(4)(c)
  2. F1304Words in Sch. B1 para. 42(4)(b) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 18 para. 55(3) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

Modifications

  1. C1356Sch. B1 paras. 40-49 modified (5.7.2018) by Housing and Planning Act 2016 (c. 22), s. 216(3), Sch. 5 Pts. 1, 2; S.I. 2018/805, reg. 3(b)
  2. C1357Sch. B1 paras. 40-49 applied (with modifications) (E.W.) (15.3.2024) by The Water Industry (Special Administration) Regulations 2024 (S.I. 2024/205), regs. 2(2), 5(1), 11-17 (with reg. 64)
  3. C1362Sch. B1 para. 42 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 119, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2
  4. C1363Sch. B1 para. 42 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 145, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 3
  5. C1364Sch. B1 para. 42 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37, Sch. 1 para. 3, Sch. 2 paras. 3-6 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)