An Act to consolidate the enactments relating to company insolvency and winding up (including the winding up of companies that are not insolvent, and of unregistered companies); enactments relating to the insolvency and bankruptcy of individuals; and other enactments bearing on those two subject matters, including the functions and qualification of insolvency practitioners, the public administration of insolvency, the penalisation and redress of malpractice and wrongdoing, and the avoidance of certain transactions at an undervalue
The Insolvency Act 1986 (c. 45) is an
act of the
Parliament of the United Kingdom that provides the legal platform for all matters relating to personal and corporate insolvency in the UK.
Elements of the Act were updated by the
Enterprise Act 2002, which came into effect on 1 April 2004 and introduced amongst other things the popular "out-of-court" administration route,[1] and the allocation of a limited amount of funding released from assets, known as the "prescribed part", which could be made available to support ordinary
unsecured creditors ahead of
secured creditors. This limit was initially £600,000, but it was increased to £800,000 by the Insolvency Act 1986 (Prescribed Part) (Amendment) Order 2020 (SI 211/2020) on 6 April 2020 to maintain the real value of the limit.[2][3]
Those considering the main Act should also refer to the
Insolvency Rules 1986 and numerous Regulations and other amending legislation since 1986, and also to the best practice which applies to the administration of formal insolvency matters set out in the
Statements of Insolvency Practice (SIPs)[4] approved by the insolvency practitioner authorising bodies.
Further updates to the Act were made by the
Corporate Insolvency and Governance Act 2020, which provided a moratorium for companies that were likely to become insolvent and gave additional reliefs for businesses that were adversely impacted by the
COVID-19 pandemic.
Chapter I - Receivers and Managers (England and Wales)
Chapter II - Receivers (Scotland)
Chapter III - Receivers Powers in Great Britain as a whole
Part IV -
Winding Up of Companies Registered Under the Companies Acts (ss 73-219)
Chapter I - Preliminary
Chapter II - Voluntary Winding Up (Introductory and General)
Chapter III - Members' Voluntary Winding Up (ss 91-96)
Chapter IV - Creditors' Voluntary Winding Up (ss 97-106)
Chapter V - Provisions Applying to both kinds of Winding up
Chapter VI - Winding Up by the Court (ss 117-162)
Chapter VII - Liquidators
Chapter VIII - Provisions of general application in winding up
Chapter IX - Dissolution of companies after winding up
Chapter X - Malpractice before and during Liquidation; Penalisation of companies and company officers; Investigations and prosecutions (ss 206-219). Section 213 lies within this part, and provides for individuals who are aware that business has been carried on with the intent to defraud the company's creditors to be called upon to contribute to the company’s assets.
Part V - Winding Up Unregistered Companies (ss 220-229)
Part VI - Miscellaneous Provisions applying to Companies which are Insolvent or in Liquidation
Part VII - Interpretation for first group of parts
Insolvency of individuals – bankruptcy
Part VIII - Individual Voluntary Arrangements
Part IX - Bankruptcy (ss 264-371)
Chapter I - Bankruptcy Petitions - Bankruptcy Orders
Chapter II - Protection of Bankrupt's Estate and Investigation of his Affairs
Chapter III - Trustees in Bankruptcy
Chapter IV - Administration by Trustee
Chapter V - Effect of Bankruptcy on certain rights, transactions etc.
Chapter VI - Bankruptcy Offences
Chapter VII - Powers of Court in Bankruptcy
Part X - Individual Insolvency: General Provisions
Part XI - Interpretation for second group of parts
Miscellaneous matters
Part XII - Preferential debts in company and individual insolvency
Part XIII - Insolvency Practitioners and their qualifications (ss 338-398)
Part XIV - Public Administration (ss 399-410)
Part XV - Subordinate Legislation
Part XVI - Provisions against debt avoidance (England and Wales Only)
Part XVII - Miscellaneous and General
Part XVIII - Interpretation
Part XIX - Final Provisions
Schedules
Schedule B1, on the new administration procedure after the
Enterprise Act 2002.
Notes
^Lyndon Norley, Kirkland & Ellis International LLP and Joseph Swanson and Peter Marshall,
Houlihan Lokey (2008). A Practitioner's Guide to Corporate Restructuring. City & Financial Publishing, 1st edition
ISBN978-1-905121-31-1