Q&As

Under rule 22.4 of the Insolvency (England and Wales) Rules 2016, is it possible for a director of companies 1 and 2 to give notice that they intend to act (via company 2) in a way that would otherwise contravene section 216 of the Insolvency Act 1986. At the time of giving notice, company 1 will not have entered into creditors’ voluntary liquidation (CVL), but it is expected to do so immediately after. As soon as company 1 enters into CVL, it is intended that the director will acquire the whole or substantially the whole of the business of company 1. Is there a statutory definition of ‘insolvent company’ in this context?

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Produced in partnership with Caroline Clark
Published on LexisPSL on 07/08/2019

The following Restructuring & Insolvency Q&A produced in partnership with Caroline Clark provides comprehensive and up to date legal information covering:

  • Under rule 22.4 of the Insolvency (England and Wales) Rules 2016, is it possible for a director of companies 1 and 2 to give notice that they intend to act (via company 2) in a way that would otherwise contravene section 216 of the Insolvency Act 1986. At the time of giving notice, company 1 will not have entered into creditors’ voluntary liquidation (CVL), but it is expected to do so immediately after. As soon as company 1 enters into CVL, it is intended that the director will acquire the whole or substantially the whole of the business of company 1. Is there a statutory definition of ‘insolvent company’ in this context?

Under rule 22.4 of the Insolvency (England and Wales) Rules 2016, is it possible for a director of companies 1 and 2 to give notice that they intend to act (via company 2) in a way that would otherwise contravene section 216 of the Insolvency Act 1986. At the time of giving notice, company 1 will not have entered into creditors’ voluntary liquidation (CVL), but it is expected to do so immediately after. As soon as company 1 enters into CVL, it is intended that the director will acquire the whole or substantially the whole of the business of company 1. Is there a statutory definition of ‘insolvent company’ in this context?

For the purposes of this Q&A, we have assumed you meant that the director will acquire the whole or substantially the whole of the business of company 1 when company 1 enters creditors’ voluntary liquidation (CVL).

Under section 216 of the Insolvency Act 1986 (IA 1986), where a company goes into liquidation, any person who has been a director or shadow director of that company in the 12 months prior to liquidation, may not, in the five years following the date of liquidation, act as director of a company that has the same name, or a similar name as the company that has gone into liquidation (the prohibited name), or be otherwise involved in

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