Office of Public Sector Information
SCHEDULE 16 continued
(2) The court may make an administration order—
(a) whether or not satisfied that the company is or is likely to become unable to pay its debts, but
(b) only if satisfied that the applicant could appoint an administrator under paragraph 14.
36 (1) This paragraph applies where—
(a) an administration application in respect of a company is made by a person who is not the holder of a qualifying floating charge in respect of the company’s property, and
(b) the holder of a qualifying floating charge in respect of the company’s property applies to the court to have a specified person appointed as administrator (and not the person specified by the administration applicant).
(2) The court shall grant an application under sub-paragraph (1)(b) unless the court thinks it right to refuse the application because of the particular circumstances of the case.
37 (1) This paragraph applies where the holder of a qualifying floating charge in respect of a company’s property could appoint an administrator under paragraph 14 but for paragraph 8(1)(b).
(2) The holder of the qualifying floating charge may make an administration application.
(3) If the court makes an administration order on hearing an application made by virtue of sub-paragraph (2)—
(a) the court shall discharge the winding-up order,
(b) the court shall make provision for such matters as may be prescribed,
(c) the court may make other consequential provision,
(d) the court shall specify which of the powers under this Schedule are to be exercisable by the administrator, and
(e) this Schedule shall have effect with such modifications as the court may specify.
38 (1) The liquidator of a company may make an administration application.
(2) If the court makes an administration order on hearing an application made by virtue of sub-paragraph (1)—
(a) the court shall discharge any winding-up order in respect of the company,
(b) the court shall make provision for such matters as may be prescribed,
(c) the court may make other consequential provision,
(d) the court shall specify which of the powers under this Schedule are to be exercisable by the administrator, and
(e) this Schedule shall have effect with such modifications as the court may specify.
39 (1) Where there is an administrative receiver of a company the court must dismiss an administration application in respect of the company unless—
(a) the person by or on behalf of whom the receiver was appointed consents to the making of the administration order,
(b) the court thinks that the security by virtue of which the receiver was appointed would be liable to be released or discharged under sections 238 to 240 (transaction at undervalue and preference) if an administration order were made,
(c) the court thinks that the security by virtue of which the receiver was appointed would be avoided under section 245 (avoidance of floating charge) if an administration order were made, or
(d) the court thinks that the security by virtue of which the receiver was appointed would be challengeable under section 242 (gratuitous alienations) or 243 (unfair preferences) or under any rule of law in Scotland.
(2) Sub-paragraph (1) applies whether the administrative receiver is appointed before or after the making of the administration application.
40 (1) A petition for the winding up of a company—
(a) shall be dismissed on the making of an administration order in respect of the company, and
(b) shall be suspended while the company is in administration following an appointment under paragraph 14.
(2) Sub-paragraph (1)(b) does not apply to a petition presented under—
(a) section 124A (public interest), or
(b) section 367 of the Financial Services and Markets Act 2000 (c. 8) (petition by Financial Services Authority).
(3) Where an administrator becomes aware that a petition was presented under a provision referred to in sub-paragraph (2) before his appointment, he shall apply to the court for directions under paragraph 63.
41 (1) When an administration order takes effect in respect of a company any administrative receiver of the company shall vacate office.
(2) Where a company is in administration, any receiver of part of the company’s property shall vacate office if the administrator requires him to.
(3) Where an administrative receiver or receiver vacates office under sub-paragraph (1) or (2)—
(a) his remuneration shall be charged on and paid out of any property of the company which was in his custody or under his control immediately before he vacated office, and
(b) he need not take any further steps under section 40 or 59.
(4) In the application of sub-paragraph (3)(a)—
(a) “remuneration” includes expenses properly incurred and any indemnity to which the administrative receiver or receiver is entitled out of the assets of the company,
(b) the charge imposed takes priority over security held by the person by whom or on whose behalf the administrative receiver or receiver was appointed, and
(c) the provision for payment is subject to paragraph 43.
42 (1) This paragraph applies to a company in administration.
(2) No resolution may be passed for the winding up of the company.
(3) No order may be made for the winding up of the company.
(4) Sub-paragraph (3) does not apply to an order made on a petition presented under—
(a) section 124A (public interest), or
(b) section 367 of the Financial Services and Markets Act 2000 (c. 8) (petition by Financial Services Authority).
(5) If a petition presented under a provision referred to in sub-paragraph (4) comes to the attention of the administrator, he shall apply to the court for directions under paragraph 63.
43 (1) This paragraph applies to a company in administration.
(2) No step may be taken to enforce security over the company’s property except—
(a) with the consent of the administrator, or
(b) with the permission of the court.
(3) No step may be taken to repossess goods in the company’s possession under a hire-purchase agreement except—
(a) with the consent of the administrator, or
(b) with the permission of the court.
(4) A landlord may not exercise a right of forfeiture by peaceable re-entry in relation to premises let to the company except—
(a) with the consent of the administrator, or
(b) with the permission of the court.
(5) In Scotland, a landlord may not exercise a right of irritancy in relation to premises let to the company except—
(a) with the consent of the administrator, or
(b) with the permission of the court.
(6) No legal process (including legal proceedings, execution, distress and diligence) may be instituted or continued against the company or property of the company except—
(a) with the consent of the administrator, or
(b) with the permission of the court.
(7) Where the court gives permission for a transaction under this paragraph it may impose a condition on or a requirement in connection with the transaction.
(8) In this paragraph “landlord” includes a person to whom rent is payable.
44 (1) This paragraph applies where an administration application in respect of a company has been made and—
(a) the application has not yet been granted or dismissed, or
(b) the application has been granted but the administration order has not yet taken effect.
(2) This paragraph also applies from the time when a copy of notice of intention to appoint an administrator under paragraph 14 is filed with the court until—
(a) the appointment of the administrator takes effect, or
(b) the period of five business days beginning with the date of filing expires without an administrator having been appointed.
(3) Sub-paragraph (2) has effect in relation to a notice of intention to appoint only if it is in the prescribed form.
(4) This paragraph also applies from the time when a copy of notice of intention to appoint an administrator is filed with the court under paragraph 27(1) until—
(a) the appointment of the administrator takes effect, or
(b) the period specified in paragraph 28(2) expires without an administrator having been appointed.
(5) The provisions of paragraphs 42 and 43 shall apply (ignoring any reference to the consent of the administrator).
(6) If there is an administrative receiver of the company when the administration application is made, the provisions of paragraphs 42 and 43 shall not begin to apply by virtue of this paragraph until the person by or on behalf of whom the receiver was appointed consents to the making of the administration order.
(7) This paragraph does not prevent or require the permission of the court for—
(a) the presentation of a petition for the winding up of the company under a provision mentioned in paragraph 42(4),
(b) the appointment of an administrator under paragraph 14,
(c) the appointment of an administrative receiver of the company, or
(d) the carrying out by an administrative receiver (whenever appointed) of his functions.
45 (1) While a company is in administration every business document issued by or on behalf of the company or the administrator must state—
(a) the name of the administrator, and
(b) that the affairs, business and property of the company are being managed by him.
(2) Any of the following commits an offence if without reasonable excuse he authorises or permits a contravention of sub-paragraph (1)—
(a) the administrator,
(b) an officer of the company, and
(c) the company.
(3) In sub-paragraph (1) “business document” means—
(a) an invoice,
(b) an order for goods or services, and
(c) a business letter.
46 (1) This paragraph applies where a person becomes the administrator of a company.
(2) As soon as is reasonably practicable the administrator shall—
(a) send a notice of his appointment to the company, and
(b) publish a notice of his appointment in the prescribed manner.
(3) As soon as is reasonably practicable the administrator shall—
(a) obtain a list of the company’s creditors, and
(b) send a notice of his appointment to each creditor of whose claim and address he is aware.
(4) The administrator shall send a notice of his appointment to the registrar of companies before the end of the period of 7 days beginning with the date specified in sub-paragraph (6).
(5) The administrator shall send a notice of his appointment to such persons as may be prescribed before the end of the prescribed period beginning with the date specified in sub-paragraph (6).
(6) The date for the purpose of sub-paragraphs (4) and (5) is—
(a) in the case of an administrator appointed by administration order, the date of the order,
(b) in the case of an administrator appointed under paragraph 14, the date on which he receives notice under paragraph 20, and
(c) in the case of an administrator appointed under paragraph 22, the date on which he receives notice under paragraph 32.
(7) The court may direct that sub-paragraph (3)(b) or (5)—
(a) shall not apply, or
(b) shall apply with the substitution of a different period.
(8) A notice under this paragraph must—
(a) contain the prescribed information, and
(b) be in the prescribed form.
(9) An administrator commits an offence if he fails without reasonable excuse to comply with a requirement of this paragraph.
47 (1) As soon as is reasonably practicable after appointment the administrator of a company shall by notice in the prescribed form require one or more relevant persons to provide the administrator with a statement of the affairs of the company.
(2) The statement must—
(a) be verified by a statement of truth in accordance with Civil Procedure Rules,
(b) be in the prescribed form,
(c) give particulars of the company’s property, debts and liabilities,
(d) give the names and addresses of the company’s creditors,
(e) specify the security held by each creditor,
(f) give the date on which each security was granted, and
(g) contain such other information as may be prescribed.
(3) In sub-paragraph (1) “relevant person” means—
(a) a person who is or has been an officer of the company,
(b) a person who took part in the formation of the company during the period of one year ending with the date on which the company enters administration,
(c) a person employed by the company during that period, and
(d) a person who is or has been during that period an officer or employee of a company which is or has been during that year an officer of the company.
(4) For the purpose of sub-paragraph (3) a reference to employment is a reference to employment through a contract of employment or a contract for services.
(5) In Scotland, a statement of affairs under sub-paragraph (1) must be a statutory declaration made in accordance with the Statutory Declarations Act 1835 (c. 62) (and sub-paragraph (2)(a) shall not apply).
48 (1) A person required to submit a statement of affairs must do so before the end of the period of 11 days beginning with the day on which he receives notice of the requirement.
(2) The administrator may—
(a) revoke a requirement under paragraph 47(1), or
(b) extend the period specified in sub-paragraph (1) (whether before or after expiry).
(3) If the administrator refuses a request to act under sub-paragraph (2)—
(a) the person whose request is refused may apply to the court, and
(b) the court may take action of a kind specified in sub-paragraph (2).
(4) A person commits an offence if he fails without reasonable excuse to comply with a requirement under paragraph 47(1).
49 (1) The administrator of a company shall make a statement setting out proposals for achieving the purpose of administration.
(2) A statement under sub-paragraph (1) must, in particular—
(a) deal with such matters as may be prescribed, and
(b) where applicable, explain why the administrator thinks that the objective mentioned in paragraph 3(1)(a) or (b) cannot be achieved.
(3) Proposals under this paragraph may include—
(a) a proposal for a voluntary arrangement under Part I of this Act (although this paragraph is without prejudice to section 4(3));
(b) a proposal for a compromise or arrangement to be sanctioned under section 425 of the Companies Act (compromise with creditors or members).
(4) The administrator shall send a copy of the statement of his proposals—
(a) to the registrar of companies,
(b) to every creditor of the company of whose claim and address he is aware, and
(c) to every member of the company of whose address he is aware.
(5) The administrator shall comply with sub-paragraph (4)—
(a) as soon as is reasonably practicable after the company enters administration, and
(b) in any event, before the end of the period of eight weeks beginning with the day on which the company enters administration.
(6) The administrator shall be taken to comply with sub-paragraph (4)(c) if he publishes in the prescribed manner a notice undertaking to provide a copy of the statement of proposals free of charge to any member of the company who applies in writing to a specified address.
(7) An administrator commits an offence if he fails without reasonable excuse to comply with sub-paragraph (5).
(8) A period specified in this paragraph may be varied in accordance with paragraph 107.
50 (1) In this Schedule “creditors' meeting” means a meeting of creditors of a company summoned by the administrator—
(a) in the prescribed manner, and
(b) giving the prescribed period of notice to every creditor of the company of whose claim and address he is aware.
(2) A period prescribed under sub-paragraph (1)(b) may be varied in accordance with paragraph 107.
(3) A creditors' meeting shall be conducted in accordance with the rules.
51 (1) Each copy of an administrator’s statement of proposals sent to a creditor under paragraph 49(4)(b) must be accompanied by an invitation to a creditors' meeting (an “initial creditors' meeting”).
(2) The date set for an initial creditors' meeting must be—
(a) as soon as is reasonably practicable after the company enters administration, and
(b) in any event, within the period of ten weeks beginning with the date on which the company enters administration.
(3) An administrator shall present a copy of his statement of proposals to an initial creditors' meeting.
(4) A period specified in this paragraph may be varied in accordance with paragraph 107.
(5) An administrator commits an offence if he fails without reasonable excuse to comply with a requirement of this paragraph.
52 (1) Paragraph 51(1) shall not apply where the statement of proposals states that the administrator thinks—
(a) that the company has sufficient property to enable each creditor of the company to be paid in full,
(b) that the company has insufficient property to enable a distribution to be made to unsecured creditors other than by virtue of section 176A(2)(a), or
(c) that neither of the objectives specified in paragraph 3(1)(a) and (b) can be achieved.
(2) But the administrator shall summon an initial creditors' meeting if it is requested—
(a) by creditors of the company whose debts amount to at least 10% of the total debts of the company,
(b) in the prescribed manner, and
(c) in the prescribed period.
(3) A meeting requested under sub-paragraph (2) must be summoned for a date in the prescribed period.
(4) The period prescribed under sub-paragraph (3) may be varied in accordance with paragraph 107.
53 (1) An initial creditors' meeting to which an administrator’s proposals are presented shall consider them and may—
(a) approve them without modification, or
(b) approve them with modification to which the administrator consents.
(2) After the conclusion of an initial creditors' meeting the administrator shall as soon as is reasonably practicable report any decision taken to—
(a) the court,
(b) the registrar of companies, and
(c) such other persons as may be prescribed.
(3) An administrator commits an offence if he fails without reasonable excuse to comply with sub-paragraph (2).
54 (1) This paragraph applies where—
(a) an administrator’s proposals have been approved (with or without modification) at an initial creditors' meeting,
(b) the administrator proposes a revision to the proposals, and
(c) the administrator thinks that the proposed revision is substantial.
(2) The administrator shall—
(a) summon a creditors' meeting,
(b) send a statement in the prescribed form of the proposed revision with the notice of the meeting sent to each creditor,
(c) send a copy of the statement, within the prescribed period, to each member of the company of whose address he is aware, and
(d) present a copy of the statement to the meeting.
(3) The administrator shall be taken to have complied with sub-paragraph (2)(c) if he publishes a notice undertaking to provide a copy of the statement free of charge to any member of the company who applies in writing to a specified address.
(4) A notice under sub-paragraph (3) must be published—
(a) in the prescribed manner, and
(b) within the prescribed period.
(5) A creditors' meeting to which a proposed revision is presented shall consider it and may—
(a) approve it without modification, or
(b) approve it with modification to which the administrator consents.
(6) After the conclusion of a creditors' meeting the administrator shall as soon as is reasonably practicable report any decision taken to—
(a) the court,
(b) the registrar of companies, and
(c) such other persons as may be prescribed.
(7) An administrator commits an offence if he fails without reasonable excuse to comply with sub-paragraph (6).
55 (1) This paragraph applies where an administrator reports to the court that—
(a) an initial creditors' meeting has failed to approve the administrator’s proposals presented to it, or
(b) a creditors' meeting has failed to approve a revision of the administrator’s proposals presented to it.
(2) The court may—
(a) provide that the appointment of an administrator shall cease to have effect from a specified time;
(b) adjourn the hearing conditionally or unconditionally;
(c) make an interim order;
(d) make an order on a petition for winding up suspended by virtue of paragraph 40(1)(b);
(e) make any other order (including an order making consequential provision) that the court thinks appropriate.
56 (1) The administrator of a company shall summon a creditors' meeting if—
(a) it is requested in the prescribed manner by creditors of the company whose debts amount to at least 10% of the total debts of the company, or
(b) he is directed by the court to summon a creditors' meeting.
(2) An administrator commits an offence if he fails without reasonable excuse to summon a creditors' meeting as required by this paragraph.
57 (1) A creditors' meeting may establish a creditors' committee.
(2) A creditors' committee shall carry out functions conferred on it by or under this Act.
(3) A creditors' committee may require the administrator—
(a) to attend on the committee at any reasonable time of which he is given at least seven days' notice, and
(b) to provide the committee with information about the exercise of his functions.
58 (1) Anything which is required or permitted by or under this Schedule to be done at a creditors' meeting may be done by correspondence between the administrator and creditors—
(a) in accordance with the rules, and
(b) subject to any prescribed condition.
(2) A reference in this Schedule to anything done at a creditors' meeting includes a reference to anything done in the course of correspondence in reliance on sub-paragraph (1).
(3) A requirement to hold a creditors' meeting is satisfied by conducting correspondence in accordance with this paragraph.
59 (1) The administrator of a company may do anything necessary or expedient for the management of the affairs, business and property of the company.
(2) A provision of this Schedule which expressly permits the administrator to do a specified thing is without prejudice to the generality of sub-paragraph (1).
Enterprise Act 2002