Insolvency Act 1986, section 195

Court's powers to ascertain wishes of creditors or contributories

Part IV Winding Up of Companies Registered under the Companies Acts

(1)The court may—

(a)as to all matters relating to the winding up of a company, have regard to the wishes of the creditors or contributories (as proved to it by any sufficient evidence), and

(b)if it thinks fit, for the purpose of ascertaining those wishes, direct [F414qualifying decision procedures to be instigated or the deemed consent procedure to be used in accordance with any directions given by the court, and appoint a person to report the result to the courtF414] .

(2)In the case of creditors, regard shall be had to the value of each creditor’s debt.

(3)F415In the case of contributories, regard shall be had to the number of votes conferred on each contributory . . . .

Definitions used in section 195 3

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
consent

(3) But where the administrator has made a statement under paragraph 52(1)(b) “consent” means—

(a) consent of each secured creditor of the company, or

(b) if the administrator thinks that a distribution may be made to preferential creditors, consent of—

(i) each secured creditor of the company, and

(ii) the preferential creditors of the company.

Defined in Sch.B1 para.108(3) · see it in the full Act
contributory

(1) In this Act . . . the expression “contributory” means every person liable to contribute to the assets of a company in the event of its being wound up, and for the purposes of all proceedings for determining, and all proceedings prior to the final determination of, the persons who are to be deemed contributories, includes any person alleged to be a contributory.

Defined in s.79(1) · see it in the full Act

Cases considering section 195 8

Travelex Bank Notes Limited in liquidation, Re

[2025] EWHC 3054 (Ch) · 21 November 2025

The court considers section 195 as recognising the relevance of creditors’ wishes in winding-up matters, while holding that majority views are not conclusive and must be assessed in light of independence and other circumstances. (see paras [147]-[151]; [199]-[207])

Daniel McAteer v Hat & Mitre Plc (in creditors’ voluntary liquidation) & Ors

[2024] EWHC 1601 (Ch) · 25 June 2024Limits

Applies section 195 as not expressly confined to a technical status, while holding that the appellant nevertheless lacked a sufficient connection and legitimate interest in seeking directions for a qualifying decision procedure (see paras [37], [55], [100]). Confirms that the court may have regard to the wishes of creditors or contributories, but the provision did not give the appellant a right to compel a procedure where he lacked the necessary interest (see paras [37], [53], [100]). Confirms the court’s power to direct qualifying decision procedures, while holding that the appellant could not use that power to advance a personal contractual objective or interests outside the liquidation (see paras [37], [94], [100]). Confirms that the votes of contributories are relevant when the court considers their wishes. The appellant’s negligible holding and opposition from the other members meant that the proposed relief could not realistically succeed (see paras [37], [53], [55]-[57]).

Edgeworth Capital (Luxembourg) S.A.R.L. & Anor v Maud

[2020] EWHC 974 (Ch) · 24 April 2020Interprets

The court treated the petitioning creditor’s right to a bankruptcy order as a class right requiring discretionary consideration of creditors supporting and opposing the order (see paras [71]-[78]).

What each judgment says about section 195 is in the case-law panel in the full Act.

Amendments and notes

5 notes from legislation.gov.uk

Amendments

  1. F413Words in s. 195 heading 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. 47(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)
  2. F414Words in s. 195(1)(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. 47(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)
  3. F415Words in s. 195(3) omitted (1.10.2009) by virtue of The Companies Act 2006 (Consequential Amendments, Transitional Provisions and Savings) Order 2009, (S.I. 2009/1941), arts. 2(1), 8, Sch. 1 para. 75(22) (with art. 10, Sch. 1 para. 84)

Modifications

  1. C593S. 195 applied (with modifications) (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 103, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2 (as amended (13.3.2018) by The Small Business, Enterprise and Employment Act 2015 (Consequential Amendments, Savings and Transitional Provisions) Regulations 2018 (S.I. 2018/208), regs. 1(3), 5(3))
  2. C594S. 195 applied (with modifications) (6.6.2013) by The Collective Investment in Transferable Securities (Contractual Scheme) Regulations 2013 (S.I. 2013/1388), Pt. 3 reg. 1, Sch. 2 paras. 3, 5 Table (with reg. 24)