Insolvency Act 1986, section 211

False representations to creditors

Part IV Winding Up of Companies Registered under the Companies Acts

(1)When a company is being wound up, whether by the court or voluntarily, any person, being a past or present officer of the company—

(a)commits an offence if he makes any false representation or commits any other fraud for the purpose of obtaining the consent of the company’s creditors or any of them to an agreement with reference to the company’s affairs or to the winding up, and

(b)is deemed to have committed that offence if, prior to the winding up, he has made any false representation, or committed any other fraud, for that purpose.

(2) For purposes of this section, “officer” includes a shadow director.

(3)A person guilty of an offence under this section is liable to imprisonment or a fine, or both.

Definitions used in section 211 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
agreement

4 For the purposes of sections 72B and 72E and this Schedule “agreement” includes an agreement or undertaking effected by—

(a)contract,

(b)deed, or

(c)any other instrument intended to have effect in accordance with the law of England and Wales, Scotland or another jurisdiction.

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

(2) “Agreement” includes any agreement or undertaking effected by—

(a)contract,

(b)deed, or

(c)any other instrument intended to have effect in accordance with the law of England and Wales, Scotland or another jurisdiction.

Defined in Sch.ZA1 para.19(2) · see it in the full Act

Cases considering section 211 3

Bezant v Rausing & Ors

[2007] EWHC 1118 (QB) · 14 May 2007

The claim failed because no basis was shown for alleging that the representation to creditors was false. The provision did not provide the asserted route to damages (see paras [119]-[120]).

Bezant v Cork

[2006] EWHC 2126 (Ch) · 24 July 2006

Cited among the alleged forms of misconduct by directors and others. The court did not determine whether the provision had been breached. (see para [40])

Bezant v Cork

[2006] EWHC 2134 (Ch) · 7 March 2006

Identifies false representations to creditors as an alleged form of misconduct. The judgment does not determine the substantive operation of the provision. (see para [40])

What each judgment says about section 211 is in the case-law panel in the full Act.

Amendments and notes

5 notes from legislation.gov.uk

Modifications

  1. C625Ss. 206-215 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. C647S. 211 applied (with modifications) (1.12.1994) by S.I. 1994/2421, art. 8, Sch. 4 Pt. I para. 1, Pt. II para. 25
  3. C648S. 211 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
  4. C649S. 211 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)
  5. C650S. 211 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37, Sch. 2 paras. 4-6 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)