Insolvency Act 1986, section 173

Release (voluntary winding up)

Part IV Winding Up of Companies Registered under the Companies Acts

(1)This section applies with respect to the release of the liquidator of a company which is being wound up voluntarily.

(2)A person who has ceased to be a liquidator shall have his release with effect from the following time, that is to say—

[F363 (a)in the following cases, the time at which notice is given to the registrar of companies in accordance with the rules that the person has ceased to hold office—

(i)the person has been removed from office by a general meeting of the company,

(ii)the person has been removed from office by a decision of the company's creditors and the company's creditors have not decided against his release,

(iii)the person has died;

(b)in the following cases, such time as the Secretary of State may, on the application of the person, determine—

(i)the person has been removed from office by a decision of the company's creditors and the company's creditors have decided against his release,

(ii)the person has been removed from office by the court,

(iii)the person has vacated office under section 171(4);F363]

(c)in the case of a person who has resigned, such time as may be prescribed;

(d)in the case of a person who has vacated office under subsection [F364(6)F364] of section 171, the time at which he vacated office;

[F365 (e)in the case of a person who has vacated office under section 171(7)—

(i)if any of the company's creditors objected to the person's release before the end of the period for so objecting prescribed by the rules, such time as the Secretary of State may, on an application by that person, determine, and

(ii)otherwise, the time at which the person vacated office.F365]

[F366 (2A)Where the person is removed from office by a decision of the company's creditors, any decision of the company's creditors as to whether the person should have his release must be made by a qualifying decision procedure.F366]

(3)In the application of subsection (2) to the winding up of a company registered in Scotland, the references to a determination by the Secretary of State as to the time from which a person who has ceased to be liquidator shall have his release are to be read as references to such a determination by the Accountant of Court.

(4)Where a liquidator has his release under subsection (2), he is, with effect from the time specified in that subsection, discharged from all liability both in respect of acts or omissions of his in the winding up and otherwise in relation to his conduct as liquidator.

But nothing in this section prevents the exercise, in relation to a person who has had his release under subsection (2), of the court’s powers under section 212 of this Act (summary remedy against delinquent directors, liquidators, etc.).

Definitions used in section 173 1

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

Cases considering section 173 5

Anthony Malcolm Cork & Anor v Mark Smith

[2026] EWHC 1199 (Ch) · 22 May 2026Interprets

Provides the statutory scheme for release of a liquidator in a voluntary winding up. Where removal is by the court, release is obtained on application to the Secretary of State; the section contains no express power for the court to grant release in a block transfer order. (see paras [14]-[16]) Sets out the times at which a voluntary liquidator obtains release in different circumstances. The judgment highlights that court removal falls within the route requiring application to the Secretary of State. (see para [14]) Describes the discharge from liability following release, subject to the court’s powers under section 212. It reinforces the distinction between statutory release and any proposed ancillary block transfer order. (see para [14])

Cedar Securities Limited (in liquidation) & Anor v Mark Richard Phillips (a bankrupt) & Ors

[2025] EWHC 2760 (Ch) · 24 October 2025Limits

Identifies the prescribed time at which a resigning liquidator obtains release. The provision formed part of the proposed statutory-release defence, subject to the requirements of rule 5.6 and the court’s power to postpone the release. (see paras [53], [98]) Provides that release discharges the liquidator from liability for acts or omissions in the winding up and other conduct as liquidator, while preserving the court’s section 212 powers. The court refused to allow reliance on the release in the present claim. (see paras [53], [98])

Hobbs & Anor v Gibson & Ors

[2010] EWHC 3676 (Ch) · 17 December 2010

Confirms the relevance of a liquidator’s release on removal and the need to alert creditors to that consequence before removal is effected. The failure to do so was a serious defect. (see paras [34]-[36]) Applies the automatic release consequence on removal once notified to the registrar, subject to creditors resolving against release. The notice’s failure to draw attention to this provision invalidated the purported removal. (see paras [34]-[36])

What each judgment says about section 173 is in the case-law panel in the full Act.

Amendments and notes

7 notes from legislation.gov.uk

Amendments

  1. F363S. 173(2)(a)(b) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 44(2); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)
  2. F364Word in s. 173(2)(d) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 44(3); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)
  3. F365S. 173(2)(e) substituted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 44(4); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)
  4. F366S. 173(2A) inserted (26.5.2015 for specified purposes, 6.4.2017 for E.W. in so far as not already in force, 6.4.2019 for S. in so far as not already in force) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 9 para. 44(5); S.I. 2015/1329, reg. 3(d); S.I. 2016/1020, reg. 4(e) (with reg. 5) (as amended by S.I. 2017/363, reg. 3); S.I. 2019/816, reg. 4(c) (with reg. 5)

Modifications

  1. C490S. 173 applied (with modifications) (4.1.2024) by S.I. 2021/716, Sch. 1 para. 3 (as amended by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 20)
  2. C491S. 173(2)(a) amended (1.7.1999) by 1998 c. 46, s. 125, Sch. 8 para. 23(4)(5), (with s. 126(3)-(11); S.I. 1998/3178, arts. 2, 3 (as amended (28.6.2016) by The Building Societies (Floating Charges and Other Provisions) Order 2016 (S.I. 2016/679), arts. 1(1), 6)
  3. C492S. 173(2) modified (S.) (6.4.2001) by S.S.I. 2001/128, reg. 4(2), Sch. 3