Insolvency Act 1986, section 222

Inability to pay debts: unpaid creditor for £750 or more

Part V Winding Up of Unregistered Companies

(1)An unregistered company is deemed (for the purposes of section 221) unable to pay its debts if there is a creditor, by assignment or otherwise, to whom the company is indebted in a sum exceeding £750 then due and—

(a)the creditor has served on the company, by leaving at its principal place of business, or by delivering to the secretary or some director, manager or principal officer of the company, or by otherwise serving in such manner as the court may approve or direct, a written demand in the prescribed form requiring the company to pay the sum due, and

(b)the company has for 3 weeks after the service of the demand neglected to pay the sum or to secure or compound for it to the creditor’s satisfaction.

(2)The money sum for the time being specified in subsection (1) is subject to increase or reduction by regulations under section 417 in Part XV; but no increase in the sum so specified affects any case in which the winding-up petition was presented before the coming into force of the increase.

Definitions used in section 222 2

unregistered company

For the purposes of this Part “unregistered company” includes any association and any company, with the exception of a company registered under the Companies Act 2006 in any part of the United Kingdom.

Defined in s.220 · see it in the full Act
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 222 4

Town & Country Properties (GB) Ltd & Ors v Black Capital & Ors

[2022] EWHC 2914 (Ch) · 17 November 2022

Applies the modified statutory-demand conditions for deeming an insolvent partnership unable to pay its debts under article 8. (see para [47]) Confirms the permitted methods of serving the written demand on the partnership. (see para [47])

ARM Asset Backed Securities SA, Re

[2013] EWHC 3351 (Ch) · 9 October 2013

Applies the provision extending the relevant winding-up provisions to an unregistered company. The company could therefore rely on section 135 despite being incorporated outside the United Kingdom (see para [35]).

Patley Wood Farm LLP v Brake & Ors (t/a Stay in Style)

[2016] EWHC 1688 (Ch) · 22 July 2016

The court considered the provisions in the respondents’ argument about statutory tests for inability to pay debts, but applied the partnership-modified Schedule B1 test instead.

What each judgment says about section 222 is in the case-law panel in the full Act.

Amendments and notes

2 notes from legislation.gov.uk

Modifications

  1. C717S. 222 applied with modifications by S.I. 1986/2421, arts. 1(2), 7, 15, Sch. 1 para. 3
  2. C718S. 222 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)