Insolvency Act 1985
|Publication Date:||January 01, 1985|
Insolvency Act 1985
1985 CHAPTER 65
An Act to make provision with respect to the insolvency of companies and individuals, the winding up of companies, the disqualification and personal liability of persons involved in the management of companies and the avoidance of certain transactions at an undervalue; and for connected purposes.
[30th October 1985]
Be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—
1 Unqualified persons not to act as insolvency practitioners.
(1) Any person who acts as an insolvency practitioner in relation to a company or an individual at a time when he is not qualified to do so shall be liable—
(a ) on summary conviction, to imprisonment for a term not exceeding six months or to a fine not exceeding the statutory maximum or to both
(b ) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or to both.
(2) A person acts as an insolvency practitioner in relation to a company by acting—
(a ) as its liquidator, administrator or administrative receiver or
(b ) as supervisor of a composition or scheme approved by it under Chapter II of Part II of this Act.
(3) A person acts as an insolvency practitioner in relation to an individual by acting—
(a ) as his trustee in bankruptcy or interim receiver of his property or as permanent or interim trustee in the sequestration of his estate
(b ) as trustee under a deed which is a deed of arrangement made for the benefit of his creditors or, in Scotland, a trust deed for his creditors
(c ) as supervisor of a composition or scheme proposed by him and approved under Chapter I of Part III of this Act; or
(d ) in the case of a deceased individual to the administration of whose estate this section applies by virtue of an order under section 228 below, as administrator of that estate.
(4) References in this section to an individual include, except in so far as the context otherwise requires, references to a partnership and to any debtor within the meaning of the Bankruptcy (Scotland) Act 1985 .
(5) In this section—
‘administrative receiver’ has the same meaning as in Part II of this Act
‘company’ means a company within the meaning given by section 735(1) of the 1985 Act or a company which may be wound up under Part XXI of that Act;
‘interim trustee’ and ‘permanent trustee’ have the same meanings as in the Bankruptcy (Scotland) Act 1985;
‘liquidator’ includes provisional liquidator.
(6) Nothing in this section shall apply in relation to anything done by the official receiver.
2 Qualification of insolvency practitioners.
(1) A person who is not an individual is not qualified to act as an insolvency practitioner.
(2) A person is not qualified to act as an insolvency practitioner at any time unless, at that time—
(a ) he is authorised to act as an insolvency practitioner by virtue of section 3 below; or
(b ) he holds an authorisation granted under section 5 below.
(3) A person is not qualified to act as an insolvency practitioner in relation to another person at any time unless—
(a ) there is in force at that time security or, in Scotland, caution for the proper performance of his functions; and
(b ) that security or caution meets the prescribed requirements with respect to his so acting in relation to that other person.
(4) A person is not qualified to act as an insolvency practitioner at any time if, at that time—
(a ) he has been adjudged bankrupt or sequestration of his estate has been awarded and (in either case) he has not been discharged;
(b ) he is subject to a disqualification order made under sections 296 to 299 of the 1985 Act or Chapter I of Part II of this Act; or
(c ) he is a patient within the meaning of Part VII of the Mental Health Act 1983 or section 125(1) of the Mental Health (Scotland) Act 1984 .
Authorisation of members of recognised professional bodies
3 Authorisation of members of recognised professional bodies.
(1) A member of a recognised professional body is authorised to act as an insolvency practitioner if he is permitted so to act by or under the rules of that body.
(2) The Secretary of State may by order declare a body which appears to him to fall within subsection (3) below to be a recognised professional body for the purposes of this section; and any such order may be revoked by a further order if it appears to the Secretary of State that the body no longer falls within that subsection.
(3) This subsection applies to any body which regulates the practice of a profession and maintains and enforces rules for securing that such of its members as are permitted by or under the rules to act as insolvency practitioners—
(a ) are fit and proper persons so to act; and
(b ) meet acceptable requirements as to education and practical training and experience.
(4) Any order under subsection (2) above shall have effect from such date as is specified in the order; and any such order revoking a previous order may make provision whereby members of the body in question continue to be treated as authorised to act as insolvency practitioners for a specified period after the revocation takes effect.
(5) In this section references to members of a recognised professional body are references to persons who, whether members of that body or not, are subject to its rules in the practice of the profession in question.
Authorisation by relevant authority
4 Applications for authorisation.
(1) An application for authorisation under section 5 below—
(a ) shall be made in such manner as the relevant authority may direct
(b ) shall contain or be accompanied by such information as that authority may reasonably require for the purpose of determining the application; and
(c ) shall be accompanied by the prescribed fee;
and the relevant authority may direct that notice of the making of the application shall be published in such manner as may be specified in the direction.
(2) At any time after receiving the application and before determining it the relevant authority may require the applicant to furnish additional information.
(3) Directions and requirements given or imposed under subsection (1) or (2) above may differ as between different applications.
(4) Any information to be furnished to the relevant authority under this section shall, if it so requires, be in such form or verified in such manner as it may specify.
(5) An application for authorisation under section 5 below may be withdrawn before it is granted or refused.
(6) Any sums received under this section by a relevant authority other than the Secretary of State may be retained by that authority; and any sums received under this section by the Secretary of State shall be paid into the Consolidated Fund.
5 Grant, refusal and withdrawal of authorisation.
(1) The relevant authority may, on an application duly made in accordance with section 4 above and after being furnished with all such information as it may require under that section, grant or refuse the application.
(2) The relevant authority shall grant the application if it appears to it from the information furnished by the applicant and having regard to such other information, if any, as it may have—
(a ) that the applicant is a fit and proper person to act as an insolvency practitioner; and
(b ) that the applicant meets the prescribed requirements with respect to education and practical training and experience.
(3) An authorisation shall, unless previously withdrawn, continue in force for such period not exceeding the prescribed maximum as may be specified in the authorisation.
(4) An authorisation granted under this section may be withdrawn by the relevant authority if it appears to it—
(a ) that the holder of the authorisation is no longer a fit and proper person to act as an insolvency practitioner; or
(b ) without prejudice to paragraph (a ) above, that the holder of the authorisation has failed to comply with any provision of this Part or of any regulations made under it or, in purported compliance with any such provision, has furnished the relevant authority with false, inaccurate or misleading information.
(5) An authorisation granted under this section may be withdrawn by the relevant authority at the request or with the consent of the holder of the authorisation.
(1) Where the relevant authority grants an authorisation it shall give written notice of that fact to the applicant, specifying the date on which the authorisation takes effect.
(2) Where the relevant authority proposes to refuse an application or to withdraw an authorisation under section 5(4) above, it shall give the applicant or holder of the authorisation written notice of its intention to do so, setting out particulars of the grounds on which it proposes to act.
(3) In the case of a proposed...
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