Insolvency Act 1986, section 1

Those who may propose an arrangement

Part I Company Voluntary Arrangements

(1) The directors of a company[F2 (other than one which is in administration or being wound up) F2] may make a proposal under this Part to the company and to its creditors for a composition in satisfaction of its debts 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 F3[F4 ... in relation to the voluntary arrangement F4] .

(3)Such a proposal may also be made—

[F5 (a)where the company is in administration, by the administrator,F5]

(b)where the company is being wound up, by the liquidator.

[F6 (4) In this Part “company” means—

[F7 (a)a company registered under the Companies Act 2006 in England and Wales or Scotland;F7]

(b)a company incorporated in an EEA State F8...; or

(c)a company not incorporated in an EEA State but having its centre of main interests in a member State [F9 (other than Denmark) or in the United KingdomF9] .

(5) In subsection (4), in relation to a company, “centre of main interests” has the same meaning as in the [F10 Article 3 of the EU Regulation F10] .

(6)If a company incorporated outside the United Kingdom has a principal place of business in Northern Ireland, no proposal under this Part shall be made in relation to it unless it also has a principal place of business in England and Wales or Scotland (or both in England and Wales or Scotland).F6]

Definitions used in section 1 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
in administration

(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
articles

“articles”, in relation to a company (see section 18 of the Companies Act 2006 );

Defined in s.436(2) · see it in the full Act

Cases considering section 1 13

Inland Revenue v Wimbledon Football Club Ltd & Ors Rev 2

[2004] EWCA Civ 655 · 28 May 2004Defines

The court used section 1(1) to identify the statutory proposal as one for a composition in satisfaction of debts or a scheme of arrangement. (see paras [25]; [48]-[49]) The court confirmed that a voluntary arrangement may be proposed by an administrator or liquidator, supporting its comparison between CVAs and other insolvency procedures. (see paras [26]; [57]) Cited only. The court used the liquidator’s power to propose a voluntary arrangement when comparing CVA priorities with liquidation. (see paras [26]; [57])

In re NT Gallagher & Son Ltd (Shierson v Tomlinson, NT Gallagher & Sons Ltd v Howard)

[2002] EWCA Civ 404 · 26 March 2002Defines

The section identifies who may propose a company voluntary arrangement and requires a proposal for a composition or scheme involving a qualified insolvency practitioner. The subsection contemplates that the nominee, who becomes supervisor following approval, may act as trustee. The assets held on trust nevertheless depend upon the arrangement’s terms.

Harrington & Charles Trading Company Limited & Ors v Jatin Rajnikant Mehta & Ors

[2023] EWHC 2420 (Ch) · 3 October 2023

The contribution claim was not struck out. The pleading, read as a whole, intelligibly alleged liabilities owed by the claimants and defendants in respect of the same damage; any deficiency concerned particulars. (see paras [129]-[133])

What each judgment says about section 1 is in the case-law panel in the full Act.

Amendments and notes

12 notes from legislation.gov.uk

Amendments

  1. F2Words in s. 1(1) substituted (15.9.2003) by 2002 c. 40, ss. 248(3), 279, Sch. 17 para. 10(a) (with s. 249(1)-(3)(6)); S.I. 2003/2093, art. 2(1), Sch. 1 (subject to arts. 3-8 (as amended by S.I. 2003/2332, art. 2))
  2. F3Words in s. 1(2) omitted (1.10.2015) by virtue of Deregulation Act 2015 (c. 20), s. 115(7), Sch. 6 para. 20(2)(a); S.I. 2015/1732, art. 2(e)(vi)
  3. F4Words in s. 1(2) substituted (1.1.2003) by 2000 c. 39, s. 2, Sch. 2 Pt. I para. 2; S.I. 2002/2711, art. 2 (subject to transitional provisions in arts. 3-5)
  4. F5S. 1(3)(a) substituted (15.9.2003) by 2002 c. 40, ss. 248(3), 279, Sch. 17 para. 10(b) (with s. 249(1)-(3)(6)); S.I. 2003/2093, art. 2(1), Sch. 1 (subject to arts. 3-8 (as amended by S.I. 2003/2332, art. 2))
  5. F6S. 1(4)-(6) substituted (13.4.2005) for s. 1(4) by The Insolvency Act 1986 (Amendment) Regulations 2005 (S.I. 2005/879), reg. 2(2) (with reg. 3)
  6. F7S. 1(4)(a) substituted (1.10.2009) by The Companies Act 2006 (Consequential Amendments, Transitional Provisions and Savings) Order 2009, (S.I. 2009/1941) arts. 2(1), 8, {Sch. 1 para. 71(2)} (with art. 10, Sch. 1 para. 84)
  7. F8Words in s. 1(4)(b) omitted (31.12.2020) by virtue of The Insolvency (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/146), reg. 1(3), Sch. para. 17(a) (with regs. 4, 5); 2020 c. 1, Sch. 5 para. 1(1)
  8. F9Words in s. 1(4)(c) substituted (31.12.2020) by The Insolvency (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/146), reg. 1(3), Sch. para. 17(b) (with regs. 4, 5); 2020 c. 1, Sch. 5 para. 1(1)
  9. F10Words in s. 1(5) substituted (26.6.2017) by The Insolvency Amendment (EU 2015/848) Regulations 2017 (S.I. 2017/702), reg. 1, Sch. para. 2 (with regs. 3, 4)

Modifications

  1. C90S. 1 modified (E.W.) (31.1.2019) by The Further Education Bodies (Insolvency) Regulations 2019 (S.I. 2019/138), regs. 1(1), 7 (with regs. 1(2), 3(a)(ii))
  2. C91S. 1 restricted (24.3.2022) by Commercial Rent (Coronavirus) Act 2022 (c. 12), ss. 25(2)(a), 31(4) (with s. 30)
  3. C92Ss. 1-7B 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), 43-45 (with reg. 64)