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The Small Business, Enterprise and Employment Act 2015 (SBEEA 2015) has introduced a number of changes to the law relating to companies and insolvency.
SBEEA 2015 received Royal Assent on 26 March 2015 and introduced a series of amendments and legislative clarifications intended to ensure that the UK continues to be recognised globally as a trusted and fair place to do business and to open up new opportunities for small businesses to innovate and compete. This has brought in a number of changes to companies and insolvency to ensure a strong regulatory regime for those that administer insolvencies.
Insolvency professionals should be aware of these changes as they have an impact on many aspects of insolvency practice and procedures, and the directors disqualification regime. Most of the changes brought about under SBEEA 2015 will be introduced by separate statutory instrument, but some are effective from 26 May 2015 (see Commencement below).
The main changes to the Company Directors Disqualification Act 1996 brought about by SBEEA 2015 are:
The main changes to office-holder actions brought about by SBEEA 2015 are:
SBEEA 2015 contains provisions meaning that liquidators and trustees in bankruptcy will no longer be required to seek sanction of either the court or a creditors’ committee (or where there is none, the SoS or (in the case of a liquidation) a meeting of creditors).
The main changes to the position of creditors brought about by SBEEA 2015 are:
The main changes to administration brought about by SBEEA 2015 are:
Where a creditor is owed a small debt (expected, at least initially, to be a debt of less than £1,000), and the office-holder has clear and undisputed evidence that the debt is due, SBEEA 2015 creates the power for rules to be made effectively exempting that creditor from having to prove for their debt.
SBEEA 2015 contains provisions meaning that upon the making of a bankruptcy order, unless the court orders otherwise, the Official Receiver (OR) will be appointed as trustee in bankruptcy. This will bring to an end the current position where the OR is appointed as receiver and manager of the bankruptcy estate until a trustee in bankruptcy is appointed (whether that is the OR himself or an IP). The OR will no longer have to summon a meeting of creditors to appoint a trustee in bankruptcy, although it will still be possible for creditors to request that the OR apply to the SoS for the appointment of a different trustee in bankruptcy.
The main changes to voluntary arrangements brought about by SBEEA 2015 are:
SBEEA 2015 amends the Insolvency Act 1986 to introduce:
The majority of the provisions of SBEEA 2015 relevant to insolvency professionals will be brought into force by statutory instruments which are yet to be made. However, the following provisions will come into force on 26 May 2015:
The LexisPSL Restructuring and Insolvency team have published the following Practice Notes, which provide further detail and analysis of the changes being brought in by SBEEA 2015 that are relevant to insolvency professionals. In addition, each Practice Note links to a separate document showing in redline the amendments being made to legislation. Click the links below for further information (subscribers only):
Small Business, Enterprise and Employment Act 2015—amendments affecting the Company Directors Disqualification Act 1986
Small Business, Enterprise and Employment Act 2015—office-holder actions and removal of requirement to seek sanction
Small Business, Enterprise and Employment Act 2015—position of creditors (decision making, notices, small debts etc)
Small Business, Enterprise and Employment Act 2015—changes affecting administrations
Small Business, Enterprise and Employment Act 2015—trustees in bankruptcy
Small Business, Enterprise and Employment Act 2015—changes to regulation of IPs
Not a subscriber? Find out more about how LexisPSL can help you and click here for a free trial of LexisPSL Restructuring and Insolvency.
First published on LexisPSL Restructuring and Insolvency
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