The Insolvent Partnerships Order 1994

• Citation: S.I. 1994/2421
• Sections: 123

Section 1 Citation, commencement and extent

(1) This Order may be cited as the Insolvent Partnerships Order 1994 and shall come into force on 1st December 1994.

(2) This Order—

(a) in the case of insolvency proceedings in relation to companies and partnerships, relates to companies and partnerships which the courts in England and Wales have jurisdiction to wind up; and

(b) in the case of insolvency proceedings in relation to individuals, extends to England and Wales only.

(3) In paragraph (2) the term “insolvency proceedings” has the meaning ascribed to it by article 2 below.

Section 2 Interpretation: definitions

(1) In this Order, except in so far as the context otherwise requires—

“the Act” means the Insolvency Act 1986;

“agricultural charge” has the same meaning as in the Agricultural Credits Act 1928 ;

“agricultural receiver” means a receiver appointed under an agricultural charge;

“corporate member” means an insolvent member which is a company;

“the court”, in relation to an insolvent partnership, means the court which has jurisdiction to wind up the partnership;

“individual member” means an insolvent member who is an individual;

“insolvency order” means—

in the case of an insolvent partnership or a corporate member, a winding-up order; and

in the case of an individual member, a bankruptcy order;

“insolvency petition” means, in the case of a petition presented to the court—

against a corporate member, a petition for its winding up by the court;

against an individual member, a petition for a bankruptcy order to be made against that individual,

where the petition is presented in conjunction with a petition for the winding up of the partnership by the court as an unregistered company under the Act;

“insolvency proceedings” means any proceedings under the Act, this Order or the Insolvency Rules 1986

“insolvent member” means a member of an insolvent partnership, against whom an insolvency petition is being or has been presented;

“joint bankruptcy petition” means a petition by virtue of article 11 of this Order;

“joint debt” means a debt of an insolvent partnership in respect of which an order is made by virtue of Part IV or V of this Order;

“joint estate” means the partnership property of an insolvent partnership in respect of which an order is made by virtue of Part IV or V of this Order;

“joint expenses” means expenses incurred in the winding up of an insolvent partnership or in the winding up of the business of an insolvent partnership and the administration of its property;

“limited partner” has the same meaning as in the Limited Partnerships Act 1907 ;

“member” means a member of a partnership and any person who is liable as a partner within the meaning of section 14 of the Partnership Act 1890 ;

“officer”, in relation to an insolvent partnership, means—

a member; or

a person who has management or control of the partnership business;

“partnership property” has the same meaning as in the Partnership Act 1890;

“postponed debt” means a debt the payment of which is postponed by or under any provision of the Act or of any other enactment;

“responsible insolvency practitioner” means—

in winding up, the liquidator of an insolvent partnership or corporate member; and

in bankruptcy, the trustee of the estate of an individual member,

and in either case includes the official receiver when so acting;

“separate debt” means a debt for which a member of a partnership is liable, other than a joint debt;

“separate estate” means the property of an insolvent member against whom an insolvency order has been made;

“separate expenses” means expenses incurred in the winding up of a corporate member, or in the bankruptcy of an individual member; and

“trustee of the partnership” means a person authorised by order made by virtue of article 11 of this Order to wind up the business of an insolvent partnership and to administer its property.

(2) The definitions in paragraph (1), other than the first definition, shall be added to those in section 436 of the Act.

(3) References in provisions of the Act applied by this Order to any provision of the Act so applied shall, unless the context otherwise requires, be construed as references to the provision as so applied.

(4) Where, in any Schedule to this Order, all or any of the provisions of two or more sections of the Act are expressed to be modified by a single paragraph of the Schedule, the modification includes the combination of the provisions of those sections into the one or more sections set out in that paragraph.

Section 3 Interpretation: expressions appropriate to companies

(1) This article applies for the interpretation in relation to insolvent partnerships of expressions appropriate to companies in provisions of the Act and of the Company Directors Disqualification Act 1986 applied by this Order, unless the contrary intention appears.

(2) References to companies shall be construed as references to insolvent partnerships and all references to the registrar of companies shall be omitted.

(3) References to shares of a company shall be construed—

(a) in relation to an insolvent partnership with capital, as references to rights to share in that capital; and

(b) in relation to an insolvent partnership without capital, as references to interests—

(i) conferring any right to share in the profits or liability to contribute to the losses of the partnership, or

(ii) giving rise to an obligation to contribute to the debts or expenses of the partnership in the event of a winding up.

(4) Other expressions appropriate to companies shall be construed, in relation to an insolvent partnership, as references to the corresponding persons, officers, documents or organs (as the case may be) appropriate to a partnership.

Section 4 Voluntary arrangement of insolvent partnership

(1) The provisions of Part I of the Act shall apply in relation to an insolvent partnership, those provisions being modified in such manner that, after modification, they are as set out in Schedule 1 to this Order.

(2) For the purposes of the provisions of the Act applied by paragraph (1), the provisions of the Act specified in paragraph (3) below, insofar as they relate to company voluntary arrangements, shall also apply in relation to insolvent partnerships.

(3) The provisions referred to in paragraph (2) are—

(a) section 233 in Part VI,

(b) Part VII, with the exception of section 250,

(c) Part XII,

(d) Part XIII,

(e) sections 411, 413, 414 and 419 in Part XV, and

(f) Parts XVI to XIX.

Section 5 Voluntary arrangements of members of insolvent partnership

(1) Where insolvency orders are made against an insolvent partnership and an insolvent member of that partnership in his capacity as such, Part I of the Act shall apply to corporate members and Part VIII to individual members of that partnership, with the modification that any reference to the creditors of the company or of the debtor, as the case may be, includes a reference to the creditors of the partnership.

(2) Paragraph (1) is not to be construed as preventing the application of Part I or (as the case may be) Part VIII of the Act to any person who is a member of an insolvent partnership (whether or not a winding-up order has been made against that partnership) and against whom an insolvency order has not been made under this Order or under the Act.

Section 6 Administration order in relation to insolvent partnership

(1) The provisions of Part II of the Act shall apply in relation to an insolvent partnership, certain of those provisions being modified in such manner that, after modification, they are as set out in Schedule 2 to this Order.

(2) For the purposes of the provisions of the Act applied by paragraph (1), the provisions of the Act specified in paragraph (3) below, insofar as they relate to administration orders, shall also apply in relation to insolvent partnerships.

(3) The provisions referred to in paragraph (2) are—

(a) section 212 in Part IV,

(b) Part VI,

(c) Part VII, with the exception of section 250,

(d) Part XIII,

(e) sections 411, 413, 414 and 419 in Part XV, and

(f) Parts XVI to XIX.

Section 7 Winding up of insolvent partnership as unregistered company on petition of creditor etc. where no concurrent petition presented against member

(1) Subject to paragraph (2) below, the provisions of Part V of the Act shall apply in relation to the winding up of an insolvent partnership as an unregistered company on the petition of a creditor, of a responsible insolvency practitioner or of the Secretary of State, where no insolvency petition is presented by the petitioner against a member or former member of that partnership in his capacity as such.

(2) Certain of the provisions referred to in paragraph (1) are modified in their application in relation to insolvent partnerships which are being wound up by virtue of that paragraph in such manner that, after modification, they are as set out in Part I of Schedule 3 to this Order.

(3) The provisions of the Act specified in Part II of Schedule 3 to this Order shall apply as set out in that Part for the purposes of section 221(5) of the Act, as modified by Part I of that Schedule.

Section 8 Winding up of insolvent partnership as unregistered company on creditor’s petition where concurrent petitions presented against one or more members

(1) Subject to paragraph (2) below, the provisions of Part V of the Act (other than sections 223 and 224), shall apply in relation to the winding up of an insolvent partnership as an unregistered company on a creditor’s petition where insolvency petitions are presented by the petitioner against the partnership and against one or more members or former members of the partnership in their capacity as such.

(2) Certain of the provisions referred to in paragraph (1) are modified in their application in relation to insolvent partnerships which are being wound up by virtue of that paragraph in such manner that, after modification, they are as set out in Part I of Schedule 4 to this Order.

(3) The provisions of the Act specified in Part II of Schedule 4 to this Order shall apply as set out in that Part for the purposes of section 221(5) of the Act, as modified by Part I of that Schedule.

(4) The provisions of the Act specified in paragraph (5) below, insofar as they relate to winding up of companies by the court in England and Wales on a creditor’s petition, shall apply in relation to the winding up of a corporate member or former corporate member (in its capacity as such) of an insolvent partnership which is being wound up by virtue of paragraph (1).

(5) The provisions referred to in paragraph (4) are—

(a) Part IV,

(b) Part VI,

(c) Part VII, and

(d) Parts XII to XIX.

(6) The provisions of the Act specified in paragraph (7) below, insofar as they relate to the bankruptcy of individuals in England and Wales on a petition presented by a creditor, shall apply in relation to the bankruptcy of an individual member or former individual member (in his capacity as such) of an insolvent partnership which is being wound up by virtue of paragraph (1).

(7) The provisions referred to in paragraph (6) are—

(a) Part IX (other than sections 269, 270, 287 and 297), and

(b) Parts X to XIX.

(8) Certain of the provisions referred to in paragraphs (4) and (6) are modified in their application in relation to the corporate or individual members or former corporate or individual members of insolvent partnerships in such manner that, after modification, they are as set out in Part II of Schedule 4 to this Order.

(9) The provisions of the Act applied by this Article shall further be modified so that references to a corporate or individual member include any former such member against whom an insolvency petition is being or has been presented by virtue of this Article.

Section 9 Winding up of insolvent partnership as unregistered company on member’s petition where no concurrent petition presented against member

The following provisions of the Act shall apply in relation to the winding up of an insolvent partnership as an unregistered company on the petition of a member where no insolvency petition is presented by the petitioner against a member of that partnership in his capacity as such—

(a) sections 117 and 221, modified in such manner that, after modification, they are as set out in Schedule 5 to this Order; and

(b) the other provisions of Part V of the Act, certain of those provisions being modified in such manner that, after modification, they are as set out in Part I of Schedule 3 to this Order.

Section 10 Winding up of insolvent partnership as unregistered company on member’s petition where concurrent petitions presented against all members

(1) The following provisions of the Act shall apply in relation to the winding up of an insolvent partnership as an unregistered company on a member’s petition where insolvency petitions are presented by the petitioner against the partnership and against all its members in their capacity as such—

(a) sections 117, 124, 125, 221, 264, 265, 271 and 272 of the Act, modified in such manner that, after modification, they are as set out in Schedule 6 to this Order; and

(b) sections 220, 225 and 227 to 229 in Part V of the Act, section 220 being modified in such manner that, after modification, it is as set out in Part I of Schedule 4 to this Order.

(2) The provisions of the Act specified in paragraph (3) below, insofar as they relate to winding up of companies by the court in England and Wales on a member’s petition, shall apply in relation to the winding up of a corporate member (in its capacity as such) of an insolvent partnership which is wound up by virtue of paragraph (1).

(3) The provisions referred to in paragraph (2) are—

(a) Part IV,

(b) Part VI,

(c) Part VII, and

(d) Parts XII to XIX.

(4) The provisions of the Act specified in paragraph (5) below, insofar as they relate to the bankruptcy of individuals in England and Wales where a bankruptcy petition is presented by a debtor, shall apply in relation to the bankruptcy of an individual member (in his capacity as such) of an insolvent partnership which is being wound up by virtue of paragraph (1).

(5) The provisions referred to in paragraph (4) are—

(a) Part IX (other than sections 273, 274, 287 and 297), and

(b) Parts X to XIX.

(6) Certain of the provisions referred to in paragraphs (2) and (4) are modified in their application in relation to the corporate or individual members of insolvent partnerships in such manner that, after modification, they are as set out in Part II of Schedule 4 to this Order, save that the provisions on summary administration of a debtor’s estate shall apply in relation to the individual members of insolvent partnerships in such manner that, after modification, those provisions are as set out in Schedule 7 to this Order.

Section 11 Insolvency proceedings not involving winding up of insolvent partnership as unregistered company where individual members present joint bankruptcy petition

(1) The provisions of the Act specified in paragraph (2) below shall apply in relation to the bankruptcy of the individual members of an insolvent partnership where those members jointly present a petition to the court for orders to be made for the bankruptcy of each of them in his capacity as a member of the partnership, and the winding up of the partnership business and administration of its property, without the partnership being wound up as an unregistered company under Part V of the Act.

(2) The provisions referred to in paragraph (1) are—

(a) Part IX (other than sections 273, 274 and 287), and

(b) Parts X to XIX,

insofar as they relate to the insolvency of individuals in England and Wales where a bankruptcy petition is presented by a debtor.

(3) Certain of the provisions referred to in paragraph (1) are modified in their application in relation to the individual members of insolvent partnerships in such manner that, after modification, they are as set out in Schedule 7 to this Order.

Section 12 Winding up of unregistered company which is a member of insolvent partnership being wound up by virtue of this Order

Where an insolvent partnership or other body which may be wound up under Part V of the Act as an unregistered company is itself a member of an insolvent partnership being so wound up, articles 8 and 10 above shall apply in relation to the latter insolvent partnership as though the former body were a corporate member of that partnership.

Section 13 Deposit on petitions

(1) Where an order under section 414(4) or 415(3) of the Act (security for fees) provides for any sum to be deposited on presentation of a winding-up or bankruptcy petition, that sum shall, in the case of petitions presented by virtue of articles 8 and 10 above, only be required to be deposited in respect of the petition for winding up the partnership, but shall be treated as a deposit in respect of all those petitions.

(2) Production of evidence as to the sum deposited on presentation of the petition for winding up the partnership shall suffice for the filing in court of an insolvency petition against an insolvent member.

Section 14 Supplemental powers of court

(1) At the end of section 168 of the Act there shall be inserted the following subsections:—

(5A) Where at any time after a winding-up petition has been presented to the court against any person (including an insolvent partnership or other body which may be wound up under Part V of the Act as an unregistered company), whether by virtue of the provisions of the Insolvent Partnerships Order 1994 or not, the attention of the court is drawn to the fact that the person in question is a member of an insolvent partnership, the court may make an order as to the future conduct of the insolvency proceedings and any such order may apply any provisions of that Order with any necessary modifications.

(5B) Any order or directions under subsection (5A) may be made or given on the application of the official receiver, any responsible insolvency practitioner, the trustee of the partnership or any other interested person and may include provisions as to the administration of the joint estate of the partnership, and in particular how it and the separate estate of any member are to be administered.

(5C) Where the court makes an order under section 72(1)(a) of the Financial Services Act 1986 or section 92(1)(a) of the Banking Act 1987 for the winding up of an insolvent partnership, the court may make an order as to the future conduct of the winding-up proceedings, and any such order may apply any provisions of the Insolvent Partnerships Order 1994 with any necessary modifications.

(2) At the end of section 303 of the Act there shall be inserted the following subsections:—

(2A) Where at any time after a bankruptcy petition has been presented to the court against any person, whether under the provisions of the Insolvent Partnerships Order 1994 or not, the attention of the court is drawn to the fact that the person in question is a member of an insolvent partnership, the court may make an order as to the future conduct of the insolvency proceedings and any such order may apply any provisions of that Order with any necessary modifications.

(2B) Where a bankruptcy petition has been presented against more than one individual in the circumstances mentioned in subsection (2A) above, the court may give such directions for consolidating the proceedings, or any of them, as it thinks just.

(2C) Any order or directions under subsection (2A) or (2B) may be made or given on the application of the official receiver, any responsible insolvency practitioner, the trustee of the partnership or any other interested person and may include provisions as to the administration of the joint estate of the partnership, and in particular how it and the separate estate of any member are to be administered.

Section 15 Meaning of “act as insolvency practitioner”

(1) After section 388(2) of the Act there shall be inserted the following—

(2A) A person acts as an insolvency practitioner in relation to an insolvent partnership by acting—

(a) as its liquidator, provisional liquidator or administrator, or

(b) as trustee of the partnership under article 11 of the Insolvent Partnerships Order 1994, or

(c) as supervisor of a voluntary arrangement approved in relation to it under Part I of this Act.

(2) In section 388(3) the words “to a partnership and” shall be omitted.

Section 16 Application of Company Directors Disqualification Act 1986

Where an insolvent partnership is wound up as an unregistered company under Part V of the Act, the provisions of sections 6 to 10 , 15, 19(c) and 20 of, and Schedule 1 to, the Company Directors Disqualification Act 1986 shall apply, certain of those provisions being modified in such manner that, after modification, they are as set out in Schedule 8 to this Order.

Section 17 Forms

(1) The forms contained in Schedule 9 to this Order shall be used in and in connection with proceedings by virtue of this Order, whether in the High Court or a county court.

(2) The forms shall be used with such variations, if any, as the circumstances may require.

Section 18 Application of subordinate legislation

(1) The subordinate legislation specified in Schedule 10 to this Order shall apply as from time to time in force and with such modifications as the context requires for the purpose of giving effect to the provisions of the Act and of the Company Directors Disqualification Act 1986 which are applied by this Order.

(2) In the case of any conflict between any provision of the subordinate legislation applied by paragraph (1) and any provision of this Order, the latter provision shall prevail.

Section 19 Supplemental and transitional provisions

(1) This Order does not apply in relation to any case in which a winding-up or a bankruptcy order was made under the Insolvent Partnerships Order 1986 in relation to a partnership or an insolvent member of a partnership, and where this Order does not apply the law in force immediately before this Order came into force continues to have effect.

(2) Where winding-up or bankruptcy proceedings commenced under the provisions of the Insolvent Partnerships Order 1986 were pending in relation to a partnership or an insolvent member of a partnership immediately before this Order came into force, either—

(a) those proceedings shall be continued, after the coming into force of this Order, in accordance with the provisions of this Order, or

(b) if the court so directs, they shall be continued under the provisions of the 1986 Order, in which case the law in force immediately before this Order came into force continues to have effect.

(3) For the purpose of paragraph (2) above, winding-up or bankruptcy proceedings are pending if a statutory or written demand has been served or a winding-up or bankruptcy petition has been presented.

(4) Nothing in this Order is to be taken as preventing a petition being presented against an insolvent partnership under—

(a) section 53 or 54 of the Insurance Companies Act 1982 (winding up: insurance companies),

(b) section 72(2)(d) of the Financial Services Act 1986 (winding up: investment business),

(c) section 92 of the Banking Act 1987 (winding up: authorised institutions), or

(d) any other enactment.

(5) Nothing in this Order is to be taken as preventing any creditor or creditors owed one or more debts by an insolvent partnership from presenting a petition under the Act against one or more members of the partnership liable for that debt or those debts (as the case may be) without including the others and without presenting a petition for the winding up of the partnership as an unregistered company.

(6) Bankruptcy proceedings may be consolidated by virtue of article 14(2) above irrespective of whether they were commenced under the Bankruptcy Act 1914 or the Insolvency Act 1986 or by virtue of the Insolvent Partnerships Order 1986 or this Order, and the court shall, in the case of proceedings commenced under or by virtue of different enactments, make provision for the manner in which the consolidated proceedings are to be conducted.

Section 20 Revocation

The Insolvent Partnerships Order 1986 is hereby revoked.

Section 1 Those who may propose an arrangement

(1) The members of an insolvent partnership (other than one for which an administration order is in force, or which is being wound up as an unregistered company, or in respect of which an order has been made by virtue of article 11 of the Insolvent Partnerships Order 1994) may make a proposal under this Part to the partnership’s creditors for a composition in satisfaction of the debts of the partnership or a scheme of arrangement of its affairs (from here on referred to, in either case, as a “voluntary arrangement”).

(2) A proposal under this Part is one which provides for some person (“the nominee”) to act in relation to the voluntary arrangement either as trustee or otherwise for the purpose of supervising its implementation; and the nominee must be a person who is qualified to act as an insolvency practitioner in relation to the insolvent partnership.

(3) Such a proposal may also be made—

(a) where an administration order is in force in relation to the partnership, by the administrator,

(b) where the partnership is being wound up as an unregistered company, by the liquidator, and

(c) where an order has been made by virtue of article 11 of the Insolvent Partnerships Order 1994, by the trustee of the partnership.

Section 2 Procedure where nominee is not the liquidator, administrator or trustee

(1) This section applies where the nominee under section 1 is not the liquidator, administrator or trustee of the insolvent partnership.

(2) The nominee shall, within 28 days (or such longer period as the court may allow) after he is given notice of the proposal for a voluntary arrangement, submit a report to the court stating—

(a) whether, in his opinion, meetings of the members of the partnership and of the partnership’s creditors should be summoned to consider the proposal, and

(b) if in his opinion such meetings should be summoned, the date on which, and time and place at which, he proposes the meetings should be held.

(3) The nominee shall also state in his report whether there are in existence any insolvency proceedings in respect of the insolvent partnership or any of its members.

(4) For the purposes of enabling the nominee to prepare his report, the person intending to make the proposal shall submit to the nominee—

(a) a document setting out the terms of the proposed voluntary arrangement, and

(b) a statement of the partnership’s affairs containing—

(i) such particulars of the partnership’s creditors and of the partnership’s debts and other liabilities and of the partnership property as may be prescribed, and

(ii) such other information as may be prescribed.

(5) The court may, on an application made by the person intending to make the proposal, in a case where the nominee has failed to submit the report required by this section, direct that the nominee be replaced as such by another person qualified to act as an insolvency practitioner in relation to the insolvent partnership.

Section 3 Summoning of meetings

(1) Where the nominee under section 1 is not the liquidator, administrator or trustee of the insolvent partnership, and it has been reported to the court that such meetings as are mentioned in section 2(2) should be summoned, the person making the report shall (unless the court otherwise directs) summon those meetings for the time, date and place proposed in the report.

(2) Where the nominee is the liquidator, administrator or trustee of the insolvent partnership, he shall summon meetings of the members of the partnership and of the partnership’s creditors to consider the proposal for such a time, date and place as he thinks fit.

(3) The persons to be summoned to a creditors' meeting under this section are every creditor of the partnership of whose claim and address the person summoning the meeting is aware.

Section 4 Decisions of meetings

(1) The meetings summoned under section 3 shall decide whether to approve the proposed voluntary arrangement (with or without modifications).

(2) The modifications may include one conferring the functions proposed to be conferred on the nominee on another person qualified to act as an insolvency practitioner in relation to the insolvent partnership.

But they shall not include any modification by virtue of which the proposal ceases to be a proposal such as is mentioned in section 1.

(3) A meeting so summoned shall not approve any proposal or modification which affects the right of a secured creditor of the partnership to enforce his security, except with the concurrence of the creditor concerned.

(4) Subject as follows, a meeting so summoned shall not approve any proposal or modification under which—

(a) any preferential debt of the partnership is to be paid otherwise than in priority to such of its debts as are not preferential debts, or

(b) a preferential creditor of the partnership is to be paid an amount in respect of a preferential debt that bears to that debt a smaller proportion than is borne to another preferential debt by the amount that is to be paid in respect of that other debt.

However, the meeting may approve such a proposal or modification with the concurrence of the preferential creditor concerned.

(5) Subject as above, each of the meetings shall be conducted in accordance with the rules.

(6) After the conclusion of either meeting in accordance with the rules, the chairman of the meeting shall report the result of the meeting to the court, and, immediately after reporting to the court, shall give notice of the result of the meeting to all those who were sent notice of the meeting in accordance with the rules.

(7) References in this section to preferential debts and preferential creditors are to be read in accordance with section 386 in Part XII of this Act.

Section 5 Effect of approval

(1) This section has effect where each of the meetings summoned under section 3 approves the proposed voluntary arrangement either with the same modifications or without modifications.

(2) The approved voluntary arrangement—

(a) takes effect as if made by the members of the partnership at the creditors' meeting, and

(b) binds every person who in accordance with the rules had notice of, and was entitled to vote at, that meeting (whether or not he was present or represented at the meeting) as if he were a party to the voluntary arrangement.

(3) Subject as follows, if the partnership is being wound up as an unregistered company, or an administration order or an order by virtue of article 11 of the Insolvent Partnerships Order 1994 is in force, the court may do one or both of the following, namely—

(a) by order—

(i) stay all proceedings in the winding up or in the proceedings under the order made by virtue of the said article 11 (as the case may be), including any related insolvency proceedings of a member of the partnership in his capacity as such, or

(ii) discharge the administration order;

(b) give such directions as it thinks appropriate for facilitating the implementation of the approved voluntary arrangement with respect to—

(i) the conduct of the winding up, of the proceedings by virtue of the said article 11 or of the administration (as the case may be), and

(ii) the conduct of any related insolvency proceedings as referred to in paragraph (a)(i) above.

(4) The court shall not make an order under subsection (3)(a)—

(a) at any time before the end of the period of 28 days beginning with the first day on which each of the reports required by section 4(6) has been made to the court, or

(b) at any time when an application under the next section or an appeal in respect of such an application is pending, or at any time in the period within which such an appeal may be brought.

Section 6 Challenge of decisions

(1) Subject to this section, an application to the court may be made, by any of the persons specified below, on one or both of the following grounds, namely—

(a) that a voluntary arrangement approved at the meetings summoned under section 3 unfairly prejudices the interests of a creditor, member or contributory of the partnership;

(b) that there has been some material irregularity at or in relation to either of the meetings.

(2) The persons who may apply under this section are—

(a) a person entitled, in accordance with the rules, to vote at either of the meetings;

(b) the nominee or any person who has replaced him under section 2(5) or 4(2); and

(c) if the partnership is being wound up as an unregistered company or an administration order or order by virtue of article 11 of the Insolvent Partnerships Order 1994 is in force, the liquidator, administrator or trustee of the partnership.

(3) An application under this section shall not be made after the end of the period of 28 days beginning with the first day on which each of the reports required by section 4(6) has been made to the court.

(4) Where on such an application the court is satisfied as to either of the grounds mentioned in subsection (1), it may do one or both of the following, namely—

(a) revoke or suspend the approvals given by the meetings or, in a case falling within subsection (1)(b), any approval given by the meeting in question;

(b) give a direction to any person for the summoning of further meetings to consider any revised proposal the person who made the original proposal may make or, in a case falling within subsection (1)(b), a further meeting of the members of the partnership or (as the case may be) of the partnership’s creditors to reconsider the original proposal.

(5) Where at any time after giving a direction under subsection (4)(b) for the summoning of meetings to consider a revised proposal the court is satisfied that the person who made the original proposal does not intend to submit a revised proposal, the court shall revoke the direction and revoke or suspend any approval given at the previous meetings.

(6) In a case where the court, on an application under this section with respect to any meeting—

(a) gives a direction under subsection (4)(b), or

(b) revokes or suspends an approval under subsection (4)(a) or (5),

the court may give such supplemental directions as it thinks fit, and, in particular, directions with respect to things done since the meeting under any voluntary arrangement approved by the meeting.

(7) Except in pursuance of the preceding provisions of this section, an approval given at a meeting summoned under section 3 is not invalidated by any irregularity at or in relation to the meeting.

Section 7 Implementation of proposal

(1) This section applies where a voluntary arrangement approved by the meetings summoned under section 3 has taken effect.

(2) The person who is for the time being carrying out in relation to the voluntary arrangement the functions conferred—

(a) by virtue of the approval on the nominee, or

(b) by virtue of section 2(5) or 4(2) on a person other than the nominee,

shall be known as the supervisor of the voluntary arrangement.

(3) If any of the partnership’s creditors or any other person is dissatisfied by any act, omission or decision of the supervisor, he may apply to the court; and on the application the court may—

(a) confirm, reverse or modify any act or decision of the supervisor,

(b) give him directions, or

(c) make such other order as it thinks fit.

(4) The supervisor—

(a) may apply to the court for directions in relation to any particular matter arising under the voluntary arrangement, and

(b) is included among the persons who may apply to the court for the winding up of the partnership as an unregistered company or for an administration order to be made in relation to it.

(5) The court may, whenever—

(a) it is expedient to appoint a person to carry out the functions of the supervisor, and

(b) it is inexpedient, difficult or impracticable for an appointment to be made without the assistance of the court,

make an order appointing a person who is qualified to act as an insolvency practitioner in relation to the partnership, either in substitution for the existing supervisor or to fill a vacancy.

(6) The power conferred by subsection (5) is exercisable so as to increase the number of persons exercising the functions of supervisor or, where there is more than one person exercising those functions, so as to replace one or more of those persons.

Section 1

Sections 8 to 15 of, and Schedule 1 to, the Act are set out as modified in this Schedule.

Section 2 Section 8: Power of court to make order

Section 8 is modified so as to read as follows:—

(8)

(1) Subject to this section, if the court—

(a) is satisfied that a partnership is unable to pay its debts (within the meaning given to that expression by section 222, 223 or 224 of this Act), and

(b) considers that the making of an order under this section would be likely to achieve one or more of the purposes mentioned below,

the court may make an administration order in relation to the partnership.

(2) An administration order is an order directing that, during the period for which the order is in force, the affairs and business of the partnership and the partnership property shall be managed by a person (“the administrator”) appointed for the purpose by the court.

(3) The purposes for whose achievement an administration order may be made are—

(a) the survival of the whole or any part of the undertaking of the partnership as a going concern;

(b) the approval of a voluntary arrangement under Part I; and

(c) a more advantageous realisation of the partnership property than would be effected on a winding up;

and the order shall specify the purpose or purposes for which it is made.

(4) An administration order shall not be made in relation to a partnership after an order has been made for it to be wound up by the court as an unregistered company, nor after an order has been made in relation to it by virtue of article 11 of the Insolvent Partnerships Order 1994, nor where it is—

(a) an insurance company within the meaning of the Insurance Companies Act 1982 , or

(b) an authorised institution or former authorised institution within the meaning of the Banking Act 1987 .

Section 3 Section 9: Application for order

Section 9 is modified so as to read as follows:—

(9)

(1) An application to the court for an administration order shall be by petition in Form 1 in Schedule 9 to the Insolvent Partnerships Order 1994 presented either by the members of the insolvent partnership in their capacity as such, or by a creditor or creditors (including any contingent or prospective creditor or creditors), or by all or any of those parties, together or separately.

(2) Where a petition is presented to the court—

(a) notice of the petition shall be given forthwith to any person who has appointed, or is or may be entitled to appoint, an agricultural receiver of the partnership, and to such other persons as may be prescribed, and

(b) the petition shall not be withdrawn except with the leave of the court.

(3) Where the court is satisfied that there is an agricultural receiver of the partnership, the court shall dismiss the petition unless it is also satisfied either—

(a) that the person by whom or on whose behalf the receiver was appointed has consented to the making of the order, or

(b) that, if an administration order were made, any security by virtue of which the receiver was appointed would—

(i) be liable to be released or discharged under sections 238 to 240 in Part VI (transactions at an undervalue and preferences),

(ii) be avoided under section 245 in that Part (avoidance of floating charges), or

(iii) be challengeable under section 242 (gratuitous alienations) or 243 (unfair preferences) in that Part, or under any rule of law in Scotland.

(4) Subject to subsection (3), on hearing a petition the court may dismiss it, or adjourn the hearing conditionally or unconditionally, or make an interim order or any other order that it thinks fit.

(5) Without prejudice to the generality of subsection (4), an interim order under that subsection may restrict the exercise of any powers of the officers of the partnership (whether by reference to the consent of the court or of a person qualified to act as an insolvency practitioner in relation to the partnership, or otherwise).

Section 4 Section 10: Effect of application

Section 10 is modified so as to read as follows:—

(10)

(1) During the period beginning with the presentation of a petition for an administration order and ending with the making of such an order or the dismissal of the petition—

(a) no order may be made for the winding up of the insolvent partnership, nor may any order be made by virtue of article 11 of the Insolvent Partnerships Order 1994 or under section 35 of the Partnership Act 1890 in respect of the partnership;

(b) no steps may be taken to enforce any security over the partnership property, or to repossess goods in the possession, under any hire-purchase agreement, of one or more of the officers of the partnership in their capacity as such, except with the leave of the court and subject to such terms as the court may impose; and

(c) no other proceedings and no execution or other legal process may be commenced or continued, and no distress may be levied, against the partnership or the partnership property except with the leave of the court and subject to such terms as aforesaid.

(2) Nothing in subsection (1) requires the leave of the court—

(a) for the presentation of a petition for the winding up of the partnership,

(b) for the presentation of a petition by virtue of article 11 of the Insolvent Partnerships Order 1994 in respect of the partnership,

(c) for the appointment of an agricultural receiver of the partnership, or

(d) for the carrying out by such a receiver (whenever appointed) of any of his functions.

(3) Where—

(a) a petition for an administration order is presented at a time when there is an agricultural receiver of the partnership, and

(b) the person by or on whose behalf the receiver was appointed has not consented to the making of the order,

the period mentioned in subsection (1) is deemed not to begin unless and until that person so consents.

(4) References in this section and the next to hire-purchase agreements include conditional sale agreements, chattel leasing agreements and retention of title agreements.

(5) In the application of this section and the next to Scotland, references to execution being commenced or continued include references to diligence being carried out or continued, and references to distress being levied shall be omitted.

Section 5 Section 11: Effect of order

Section 11 is modified so as to read as follows:—

(11)

(1) On the making of an administration order, any petition for the winding up of the insolvent partnership and any petition for an order to be made by virtue of article 11 of the Insolvent Partnerships Order 1994 shall be dismissed.

(2) Where an administration order has been made, any agricultural receiver of the partnership and any receiver of the partnership property shall vacate office on being required to do so by the administrator.

(3) During the period for which an administration order is in force—

(a) no order may be made for the winding up of the partnership;

(b) no order may be made by virtue of article 11 of the Insolvent Partnerships Order 1994 in respect of the partnership;

(c) no order may be made under section 35 of the Partnership Act 1890 in respect of the partnership;

(d) no agricultural receiver of the partnership may be appointed except with the consent of the administrator or the leave of the court and subject (where the court gives leave) to such terms as the court may impose;

(e) no other steps may be taken to enforce any security over the partnership property, or to repossess goods in the possession, under any hire-purchase agreement, of one or more of the officers of the partnership in their capacity as such, except with the consent of the administrator or the leave of the court and subject (where the court gives leave) to such terms as the court may impose; and

(f) no other proceedings and no execution or other legal process may be commenced or continued, and no distress may be levied, against the partnership or the partnership property except with the consent of the administrator or the leave of the court and subject (where the court gives leave) to such terms as aforesaid.

(4) Where at any time an agricultural receiver or a receiver of part of the partnership property has vacated office under subsection (2)—

(a) his remuneration and any expenses properly incurred by him, and

(b) any indemnity to which he is entitled out of the partnership property,

shall be charged on and (subject to subsection (3) above) paid out of any partnership property which was in his custody or under his control at that time in priority to any security held by the person by or on whose behalf he was appointed.

Section 6 Section 12: Notification of order

Section 12 is modified so as to read as follows:—

(12)

(1) Every invoice, order for goods or business letter which, at a time when an administration order is in force in relation to an insolvent partnership, is issued by or on behalf of the partnership or the administrator, being a document on or in which the name under which the partnership carries on business appears, shall also contain the administrator’s name and a statement that the affairs and business of the partnership and the partnership property are being managed by the administrator.

(2) If default is made in complying with this section, any of the following persons who without reasonable excuse authorises or permits the default, namely, the administrator and any officer of the partnership, is liable to a fine.

Section 7 Section 13: Appointment of administrator

Section 13 is modified so as to read as follows:—

(13)

(1) The administrator of a partnership shall be appointed either by the administration order or by an order under the next subsection.

(2) If a vacancy occurs by death, resignation or otherwise in the office of the administrator, the court may by order fill the vacancy.

(3) An application for an order under subsection (2) may be made—

(a) by any continuing administrator of the partnership; or

(b) where there is no such administrator, by a creditors' committee established under section 26 below; or

(c) where there is no such administrator and no such committee, by the members of the partnership or by any creditor or creditors of the partnership.

Section 8 Section 14: General powers

Section 14 is modified so as to read as follows:—

(14)

(1) The administrator of an insolvent partnership—

(a) may do all such things as may be necessary for the management of the affairs and business of the partnership and of the partnership property, and

(b) without prejudice to the generality of paragraph (a), has the powers specified in Schedule 1 to this Act;

and in the application of that Schedule to the administrator of a partnership the words “he” and “him” refer to the administrator.

(2) The administrator also has power—

(a) to prevent any person from taking part in the management of the partnership business and to appoint any person to be a manager of that business, and

(b) to call any meeting of the members or creditors of the partnership.

(3) The administrator may apply to the court for directions in relation to any particular matter arising in connection with the carrying out of his functions.

(4) Any power exercisable by the officers of the partnership, whether under the Partnership Act 1890, the partnership agreement or otherwise, which could be exercised in such a way as to interfere with the exercise by the administrator of his powers is not exercisable except with the consent of the administrator, which may be given either generally or in relation to particular cases.

(5) Subject to subsection (6) below, in exercising his powers the administrator is deemed to act as the agent of the members of the partnership in their capacity as such.

(6) An officer of the partnership shall not, unless he otherwise consents, be personally liable for the debts and obligations of the partnership incurred during the period when the administration order is in force.

(7) A person dealing with the administrator in good faith and for value is not concerned to inquire whether the administrator is acting within his powers.

Section 9 Section 15: Power to deal with charged property, etc.

Section 15 is modified so as to read as follows:—

(15)

(1) The administrator of a partnership may dispose of or otherwise exercise his powers in relation to any partnership property which is subject to a security to which this subsection applies as if the property were not subject to the security.

(2) Where, on an application by the administrator, the court is satisfied that the disposal (with or without other assets) of—

(a) any partnership property subject to a security to which this subsection applies, or

(b) any goods in the possession of one or more officers of the partnership in their capacity as such under a hire-purchase agreement,

would be likely to promote the purpose or one or more of the purposes specified in the administration order, the court may by order authorise the administrator to dispose of the property as if it were not subject to the security or to dispose of the goods as if all rights of the owner under the hire-purchase agreement were vested in the members of the partnership.

(3) Subsection (1) applies to any security which, as created, was a floating charge unless an agricultural receiver has been appointed under that security; and subsection (2) applies to any other security.

(4) Where property is disposed of under subsection (1), the holder of the security has the same priority in respect of any partnership property directly or indirectly representing the property disposed of as he would have had in respect of the property subject to the security.

(5) It shall be a condition of an order under subsection (2) that—

(a) the net proceeds of the disposal, and

(b) where those proceeds are less than such amount as may be determined by the court to be the net amount which would be realised on a sale of the property or goods in the open market by a willing vendor, such sums as may be required to make good the deficiency,

shall be applied towards discharging the sums secured by the security or payable under the hire-purchase agreement.

(6) Where a condition imposed in pursuance of subsection (5) relates to two or more securities, that condition requires the net proceeds of the disposal and, where paragraph (b) of that subsection applies, the sums mentioned in that paragraph to be applied towards discharging the sums secured by those securities in the order of their priorities.

(7) References in this section to hire-purchase agreements include conditional sale agreements, chattel leasing agreements and retention of title agreements.

Section 10 Section 15: Power to deal with charged property, etc.

Schedule 1 is modified so as to read as follows:—

POWERS OF ADMINISTRATOR

(1) Power to take possession of, collect and get in the partnership property and, for that purpose, to take such proceedings as may seem to him expedient.

(2) Power to sell or otherwise dispose of the partnership property by public auction or private auction or private contract or, in Scotland, to sell, feu, hire out or otherwise dispose of the partnership property by public roup or private bargain.

(3) Power to raise or borrow money and grant security therefor over the partnership property.

(4) Power to appoint a solicitor or accountant or other professionally qualified person to assist him in the performance of his functions.

(5) Power to bring or defend any action or other legal proceedings in the name and on behalf of any member of the partnership in his capacity as such or of the partnership.

(6) Power to refer to arbitration any question affecting the partnership.

(7) Power to effect and maintain insurances in respect of the partnership business and property.

(8) Power to do all acts and execute, in the name and on behalf of the partnership or of any member of the partnership in his capacity as such, any deed, receipt or other document.

(9) Power to draw, accept, make and endorse any bill of exchange or promissory note in the name and on behalf of any member of the partnership in his capacity as such or of the partnership.

(10) Power to appoint any agent to do any business which he is unable to do himself or which can more conveniently be done by an agent and power to employ and dismiss employees.

(11) Power to do all such things (including the carrying out of works) as may be necessary for the realisation of the partnership property.

(12) Power to make any payment which is necessary or incidental to the performance of his functions.

(13) Power to carry on the business of the partnership.

(14) Power to establish subsidiary undertakings of the partnership.

(15) Power to transfer to subsidiary undertakings of the partnership the whole or any part of the business of the partnership or of the partnership property.

(16) Power to grant or accept a surrender of a lease or tenancy of any of the partnership property, and to take a lease or tenancy of any property required or convenient for the business of the partnership.

(17) Power to make any arrangement or compromise on behalf of the partnership or of its members in their capacity as such.

(18) Power to rank and claim in the bankruptcy, insolvency, sequestration or liquidation of any person indebted to the partnership and to receive dividends, and to accede to trust deeds for the creditors of any such person.

(19) Power to present or defend a petition for the winding up of the partnership under the Insolvent Partnerships Order 1994.

(20) Power to do all other things incidental to the exercise of the foregoing powers.

Section 1

Sections 220 to 223 of the Act are set out as modified in Part I of this Schedule, and sections 117, 131, 133, 234 and Schedule 4 are set out as modified in Part II.

Section 2 Section 220: Meaning of “unregistered company”

Section 220 is modified so as to read as follows:—

(220) For the purposes of this Part, the expression “unregistered company” includes any insolvent partnership.

Section 3 Section 221: Winding up of unregistered companies

Section 221 is modified so as to read as follows:—

(221)

(1) Subject to subsections (2) and (3) below and to the provisions of this Part, any insolvent partnership may be wound up under this Act if it has, or at any time had, in England and Wales either—

(a) a principal place of business, or

(b) a place of business at which business is or has been carried on in the course of which the debt (or part of the debt) arose which forms the basis of the petition for winding up the partnership.

(2) Subject to subsection (3) below, an insolvent partnership shall not be wound up under this Act if the business of the partnership has not been carried on in England and Wales at any time in the period of 3 years ending with the day on which the winding-up petition is presented.

(3) If an insolvent partnership has a principal place of business situated in Scotland or in Northern Ireland, the court shall not have jurisdiction to wind up the partnership unless it had a principal place of business in England and Wales—

(a) in the case of a partnership with a principal place of business in Scotland, at any time in the period of 1 year, or

(b) in the case of a partnership with a principal place of business in Northern Ireland, at any time in the period of 3 years,

ending with the day on which the winding-up petition is presented.

(4) No insolvent partnership shall be wound up under this Act voluntarily.

(5) To the extent that they are applicable to the winding up of a company by the court in England and Wales on the petition of a creditor or of the Secretary of State, all the provisions of this Act and the Companies Act about winding up apply to the winding up of an insolvent partnership as an unregistered company—

(a) with the exceptions and additions mentioned in the following subsections of this section and in section 221A, and

(b) with the modifications specified in Part II of Schedule 3 to the Insolvent Partnerships Order 1994.

(6) Sections 73(1), 74(2)(a) to (d) and (3), 75 to 78, 83, 122, 123, 202, 203, 205 and 250 shall not apply.

(7) The circumstances in which an insolvent partnership may be wound up as an unregistered company are as follows—

(a) if the partnership is dissolved, or has ceased to carry on business, or is carrying on business only for the purpose of winding up its affairs;

(b) if the partnership is unable to pay its debts;

(c) if the court is of the opinion that it is just and equitable that the partnership should be wound up.

(8) Every petition for the winding up of an insolvent partnership under Part V of this Act shall be verified by affidavit in Form 2 in Schedule 9 to the Insolvent Partnerships Order 1994.

Petition by liquidator, administrator, trustee or supervisor to wind up insolvent partnership as unregistered company

(221A)

(1) A petition in Form 3 in Schedule 9 to the Insolvent Partnerships Order 1994 for winding up an insolvent partnership may be presented by—

(a) the liquidator or administrator of a corporate member or of a former corporate member, or

(b) the administrator of the partnership, or

(c) the trustee of an individual member's, or of a former individual member's, estate, or

(d) the supervisor of a voluntary arrangement approved under Part I of this Act in relation to a corporate member or the partnership, or under Part VIII of this Act in relation to an individual member,

if the ground of the petition is one of the circumstances set out in section 221(7).

(2) In this section “petitioning insolvency practitioner” means a person who has presented a petition under subsection (1).

(3) If the ground of the petition presented under subsection (1) is that the partnership is unable to pay its debts and the petitioning insolvency practitioner is able to satisfy the court that an insolvency order has been made against the member whose liquidator or trustee he is because of that member’s inability to pay a joint debt, that order shall, unless it is proved otherwise to the satisfaction of the court, be proof for the purposes of section 221(7) that the partnership is unable to pay its debts.

(4) Where a winding-up petition is presented under subsection (1), the court may appoint the petitioning insolvency practitioner as provisional liquidator of the partnership under section 135 (appointment and powers of provisional liquidator).

(5) Where a winding-up order is made against an insolvent partnership after the presentation of a petition under subsection (1), the court may appoint the petitioning insolvency practitioner as liquidator of the partnership; and where the court makes an appointment under this subsection, section 140(3) (official receiver not to become liquidator) applies as if an appointment had been made under that section.

(6) Where a winding-up petition is presented under subsection (1), in the event of the partnership property being insufficient to satisfy the costs of the petitioning insolvency practitioner the costs may be paid out of the assets of the corporate or individual member, as the case may be, as part of the expenses of the liquidation, administration, bankruptcy or voluntary arrangement of that member, in the same order of priority as expenses properly chargeable or incurred by the practitioner in getting in any of the assets of the member.

Section 4 Section 222: Inability to pay debts: unpaid creditor for £750 or more

Section 222 is modified so as to read as follows:—

(222)

(1) An insolvent partnership is deemed (for the purposes of section 221) unable to pay its debts if there is a creditor, by assignment or otherwise, to whom the partnership is indebted in a sum exceeding £750 then due and—

(a) the creditor has served on the partnership, in the manner specified in subsection (2) below, a written demand in the prescribed form requiring the partnership to pay the sum so due, and

(b) the partnership has for 3 weeks after the service of the demand neglected to pay the sum or to secure or compound for it to the creditor’s satisfaction.

(2) Service of the demand referred to in subsection (1)(a) shall be effected—

(a) by leaving it at a principal place of business of the partnership in England and Wales, or

(b) by leaving it at a place of business of the partnership in England and Wales at which business is carried on in the course of which the debt (or part of the debt) referred to in subsection (1) arose, or

(c) by delivering it to an officer of the partnership, or

(d) by otherwise serving it in such manner as the court may approve or direct.

(3) The money sum for the time being specified in subsection (1) is subject to increase or reduction by regulations under section 417 in Part XV; but no increase in the sum so specified affects any case in which the winding-up petition was presented before the coming into force of the increase.

Section 5 Section 223: Inability to pay debts: debt remaining unsatisfied after action brought

Section 223 is modified so as to read as follows:—

(223)

(1) An insolvent partnership is deemed (for the purposes of section 221) unable to pay its debts if an action or other proceeding has been instituted against any member for any debt or demand due, or claimed to be due, from the partnership, or from him in his character of member, and—

(a) notice in writing of the institution of the action or proceeding has been served on the partnership in the manner specified in subsection (2) below, and

(b) the partnership has not within 3 weeks after service of the notice paid, secured or compounded for the debt or demand, or procured the action or proceeding to be stayed or sisted, or indemnified the defendant or defender to his reasonable satisfaction against the action or proceeding, and against all costs, damages and expenses to be incurred by him because of it.

(2) Service of the notice referred to in subsection (1)(a) shall be effected—

(a) by leaving it at a principal place of business of the partnership in England and Wales, or

(b) by leaving it at a place of business of the partnership in England and Wales at which business is carried on in the course of which the debt or demand (or part of the debt or demand) referred to in subsection (1) arose, or

(c) by delivering it to an officer of the partnership, or

(d) by otherwise serving it in such manner as the court may approve or direct.

Section 6 Section 117: High Court and county court jurisdiction

Section 117 is modified so as to read as follows:—

(117)

(1) Subject to subsections (3) and (4) below, the High Court has jurisdiction to wind up any insolvent partnership as an unregistered company by virtue of article 7 of the Insolvent Partnerships Order 1994 if the partnership has, or at any time had, in England and Wales either—

(a) a principal place of business, or

(b) a place of business at which business is or has been carried on in the course of which the debt (or part of the debt) arose which forms the basis of the petition for winding up the partnership.

(2) Subject to subsections (3) and (4) below, a petition for the winding up of an insolvent partnership by virtue of the said article 7 may be presented to a county court in England and Wales if the partnership has, or at any time had, within the insolvency district of that court either—

(a) a principal place of business, or

(b) a place of business at which business is or has been carried on in the course of which the debt (or part of the debt) arose which forms the basis of the winding-up petition.

(3) Subject to subsection (4) below, the court only has jurisdiction to wind up an insolvent partnership if the business of the partnership has been carried on in England and Wales at any time in the period of 3 years ending with the day on which the petition for winding it up is presented.

(4) If an insolvent partnership has a principal place of business situated in Scotland or in Northern Ireland, the court shall not have jurisdiction to wind up the partnership unless it had a principal place of business in England and Wales—

(a) in the case of a partnership with a principal place of business in Scotland, at any time in the period of 1 year, or

(b) in the case of a partnership with a principal place of business in Northern Ireland, at any time in the period of 3 years,

ending with the day on which the petition for winding it up is presented.

(5) The Lord Chancellor may by order in a statutory instrument exclude a county court from having winding-up jurisdiction, and for the purposes of that jurisdiction may attach its district, or any part thereof, to any other county court, and may by statutory instrument revoke or vary any such order.

In exercising the powers of this section, the Lord Chancellor shall provide that a county court is not to have winding-up jurisdiction unless it has for the time being jurisdiction for the purposes of Parts VIII to XI of this Act (individual insolvency).

(6) Every court in England and Wales having winding-up jurisdiction has for the purposes of that jurisdiction all the powers of the High Court; and every prescribed officer of the court shall perform any duties which an officer of the High Court may discharge by order of a judge of that court or otherwise in relation to winding up.

Section 7 Section 131: Statement of affairs of insolvent partnership

Section 131 is modified so as to read as follows:—

(131)

(1) Where the court has, by virtue of article 7 of the Insolvent Partnerships Order 1994, made a winding-up order or appointed a provisional liquidator in respect of an insolvent partnership, the official receiver may require some or all of the persons mentioned in subsection (3) below to make out and submit to him a statement in the prescribed form as to the affairs of the partnership.

(2) The statement shall be verified by affidavit by the persons required to submit it and shall show—

(a) particulars of the debts and liabilities of the partnership and of the partnership property;

(b) the names and addresses of the partnership’s creditors;

(c) the securities held by them respectively;

(d) the dates when the securities were respectively given; and

(e) such further or other information as may be prescribed or as the official receiver may require.

(3) The persons referred to in subsection (1) are—

(a) those who are or have been officers of the partnership;

(b) those who have taken part in the formation of the partnership at any time within one year before the relevant date;

(c) those who are in the employment of the partnership, or have been in its employment within that year, and are in the official receiver’s opinion capable of giving the information required;

(d) those who are or have been within that year officers of, or in the employment of, a company which is, or within that year was, an officer of the partnership.

(4) Where any persons are required under this section to submit a statement of affairs to the official receiver, they shall do so (subject to the next subsection) before the end of the period of 21 days beginning with the day after that on which the prescribed notice of the requirement is given to them by the official receiver.

(5) The official receiver, if he thinks fit, may—

(a) at any time release a person from an obligation imposed on him under subsection (1) or (2) above; or

(b) either when giving the notice mentioned in subsection (4) or subsequently, extend the period so mentioned;

and where the official receiver has refused to exercise a power conferred by this subsection, the court, if it thinks fit, may exercise it.

(6) In this section—

“employment” includes employment under a contract for services; and

“the relevant date” means—

in a case where a provisional liquidator is appointed, the date of his appointment; and

in a case where no such appointment is made, the date of the winding-up order.

(7) If a person without reasonable excuse fails to comply with any obligation imposed under this section, he is liable to a fine and, for continued contravention, to a daily default fine.

Section 8 Section 133: Public examination of officers of insolvent partnerships

Section 133 is modified so as to read as follows:—

(133)

(1) Where an insolvent partnership is being wound up by virtue of article 7 of the Insolvent Partnerships Order 1994, the official receiver may at any time before the winding up is complete apply to the court for the public examination of any person who—

(a) is or has been an officer of the partnership; or

(b) has acted as liquidator or administrator of the partnership or as receiver or manager or, in Scotland, receiver of its property; or

(c) not being a person falling within paragraph (a) or (b), is or has been concerned, or has taken part, in the formation of the partnership.

(2) Unless the court otherwise orders, the official receiver shall make an application under subsection (1) if he is requested in accordance with the rules to do so by one-half, in value, of the creditors of the partnership.

(3) On an application under subsection (1), the court shall direct that a public examination of the person to whom the application relates shall be held on a day appointed by the court; and that person shall attend on that day and be publicly examined as to the formation or management of the partnership or as to the conduct of its business and affairs, or his conduct or dealings in relation to the partnership.

(4) The following may take part in the public examination of a person under this section and may question that person concerning the matters mentioned in subsection (3), namely—

(a) the official receiver;

(b) the liquidator of the partnership;

(c) any person who has been appointed as special manager of the partnership’s property or business;

(d) any creditor of the partnership who has tendered a proof in the winding up.

Section 9 Section 234: Getting in the partnership property

Section 234 is modified so as to read as follows:—

(234)

(1) This section applies where, by virtue of article 7 of the Insolvent Partnerships Order 1994—

(a) an insolvent partnership is being wound up, or

(b) a provisional liquidator of an insolvent partnership is appointed;

and “the office-holder” means the liquidator or the provisional liquidator, as the case may be.

(2) Any person who is or has been an officer of the partnership, or who is an executor or administrator of the estate of a deceased officer of the partnership, shall deliver up to the office-holder, for the purposes of the exercise of the office-holder’s functions under this Act and (where applicable) the Company Directors Disqualification Act 1986 , possession of any partnership property which he holds for the purposes of the partnership.

(3) Where any person has in his possession or control any property, books, papers or records to which the partnership appears to be entitled, the court may require that person forthwith (or within such period as the court may direct) to pay, deliver, convey, surrender or transfer the property, books, papers or records to the office-holder or as the court may direct.

(4) Where the office-holder—

(a) seizes or disposes of any property which is not partnership property, and

(b) at the time of seizure or disposal believes, and has reasonable grounds for believing, that he is entitled (whether in pursuance of an order of the court or otherwise) to seize or dispose of that property,

the next subsection has effect.

(5) In that case the office-holder—

(a) is not liable to any person in respect of any loss or damage resulting from the seizure or disposal except in so far as that loss or damage is caused by the office-holder’s own negligence, and

(b) has a lien on the property, or the proceeds of its sale, for such expenses as were incurred in connection with the seizure or disposal.

Section 10 Section 234: Getting in the partnership property

Schedule 4 is modified so as to read as follows:—

POWERS OF LIQUIDATOR IN A WINDING UP

POWERS EXERCISABLE WITH SANCTION

(1) Power to pay any class of creditors in full.

(2) Power to make any compromise or arrangement with creditors or persons claiming to be creditors, or having or alleging themselves to have any claim (present or future, certain or contingent, ascertained or sounding only in damages) against the partnership, or whereby the partnership may be rendered liable.

(3) Power to compromise, on such terms as may be agreed—

(a) all debts and liabilities capable of resulting in debts, and all claims (present or future, certain or contingent, ascertained or sounding only in damages) subsisting or supposed to subsist between the partnership and a contributory or alleged contributory or other debtor or person apprehending liability to the partnership, and

(b) all questions in any way relating to or affecting the partnership property or the winding up of the partnership,

and take any security for the discharge of any such debt, liability or claim and give a complete discharge in respect of it.

(4) Power to bring or defend any action or other legal proceeding in the name and on behalf of any member of the partnership in his capacity as such or of the partnership.

(5) Power to carry on the business of the partnership so far as may be necessary for its beneficial winding up.

POWERS EXERCISABLE WITHOUT SANCTION

(6) Power to sell any of the partnership property by public auction or private contract, with power to transfer the whole of it to any person or to sell the same in parcels.

(7) Power to do all acts and execute, in the name and on behalf of the partnership or of any member of the partnership in his capacity as such, all deeds, receipts and other documents.

(8) Power to prove, rank and claim in the bankruptcy, insolvency or sequestration of any contributory for any balance againt his estate, and to receive dividends in the bankruptcy, insolvency or sequestration in respect of that balance, as a separate debt due from the bankrupt or insolvent, and rateably with the other separate creditors.

(9) Power to draw, accept, make and endorse any bill of exchange or promissory note in the name and on behalf of any member of the partnership in his capacity as such or of the partnership, with the same effect with respect to the liability of the partnership or of ny member of the partnership in his capacity as such as if the bill or note had been drawn, accepted, made or endorsed in the course of the partnership’s business.

(10) Power to raise on the security of the partnership property any money requisite.

(11) Power to take out in his official name letters of administration to any deceased contributory, and to do in his official name any other act necessary for obtaining payment of any money due from a contributory or his estate which cannot conveniently be done in the name of the partnership. In all such cases the money due is deemed, for the purpose of enabling the liquidator to take out the letters of administration or recover the money, to be due to the liquidator himself.

(12) Power to appoint an agent to do any business which the liquidator is unable to do himself.

(13) Power to do all such other things as may be necessary for winding up the partnership’s affairs and distributing its property.

Section 1

(1) Sections 220 to 222 of the Act are set out as modified in Part I of this Schedule, and the provisions of the Act specified in sub-paragraph (2) below are set out as modified in Part II.

(2) The provisions referred to in sub-paragraph (1) are sections 117, 122 to 125, 131, 133, 136, 137, 139 to 141, 143, 146, 147, 168, 172, 174, 175, 189, 211, 230, 231, 234 264, 265, 267, 268, 271, 283, 284, 288, 292 to 296, 298 to 303, 305, 314, 328, 331 and 356, and Schedule 4.

Section 2 Section 220: Meaning of “unregistered company”

Section 220 is modified so as to read as follows—

(220) For the purposes of this Part, the expression “unregistered company” includes any insolvent partnership.

Section 3 Section 221: Winding up of unregistered companies

Section 221 is modified so as to read as follows—

(221)

(1) Subject to subsections (2) and (3) below and to the provisions of this Part, any insolvent partnership may be wound up under this Act if it has, or at any time had, in England and Wales either—

(a) a principal place of business, or

(b) a place of business at which business is or has been carried on in the course of which the debt (or part of the debt) arose which forms the basis of the petition for winding up the partnership.

(2) Subject to subsection (3) below, an insolvent partnership shall not be wound up under this Act if the business of the partnership has not been carried on in England and Wales at any time in the period of 3 years ending with the day on which the winding-up petition is presented.

(3) If an insolvent partnership has a principal place of business situated in Scotland or in Northern Ireland, the court shall not have jurisdiction to wind up the partnership unless it had a principal place of business in England and Wales—

(a) in the case of a partnership with a principal place of business in Scotland, at any time in the period of 1 year, or

(b) in the case of a partnership with a principal place of business in Northern Ireland at any time in the period of 3 years,

ending with the day on which the winding-up petition is presented.

(4) No insolvent partnership shall be wound up under this Act voluntarily.

(5) To the extent that they are applicable to the winding up of a company by the court in England and Wales on a creditor’s petition, all the provisions of this Act and the Companies Act about winding up apply to the winding up of an insolvent partnership as an unregistered company—

(a) with the exceptions and additions mentioned in the following subsections of this section, and

(b) with the modifications specified in Part II of Schedule 4 to the Insolvent Partnerships Order 1994.

(6) Sections 73(1), 74(2)(a) to (d) and (3), 75 to 78, 83, 154, 202, 203, 205 and 250 shall not apply.

(7) Unless the contrary intention appears, a member of a partnership against whom a insolvency order has been made by virtue of article 8 of the Insolvent Partnerships Order 1994 shall not be treated as a contributory for the purposes of this Act.

(8) The circumstance in which an insolvent partnership may be wound up as an unregistered company is that the partnership is unable to pay its debts.

(9) Every petition for the winding up of an insolvent partnership under Part V of this Act shall be verified by affidavit in Form 2 in Schedule 9 to the Insolvent Partnerships Order 1994.