In the 15 years that I have been dealing with business recovery and insolvency related matters, there has been constant change to the various areas of legislation that we have to operate within. These are not just changes to our industry bible (The Insolvency Act and Insolvency Rules 1986), but other areas of other legislation which have a direct impact on our day to day duties.
These include, but are not limited to the:-
- Pensions Act 2004
- Companies Act 2006
- EC Regulations on Insolvency Proceedings 2000
- Health and Safety at Work Act 1974
- Landlord and Tenant (Covenants) Act 1995
- Environmental Protection Act 1990
- Employment Rights Act 1996
- Company Directors Disqualification Act 1986
- Limited Liability Partnerships Regulations 2001
- Proceeds of Crime Act 2002
- Law of Property Act 1925
- TUPE Regulations 1981
and many more……!
I can’t recall a year without some fundamental change to legislation that impacts us, and up until now there has always been a common theme, which is to create further burden on the Insolvency Practitioner, both in terms of technical training and legal responsibility!
On 26th March 2015 the Small Business Enterprise and Employment Act received Royal Assent, and although there are some additional requirements for IP’s to note, overall it is my view that this simplifies certain aspects of our role. It was part of the Coalition government’s ‘Red Tape Challenge’ (not to create it, but to actually cut it!!!).
Below is a snapshot of some of the changes, which came into effect on 26th May 2015.
Requirement for sanction
There is no longer a requirement for a Liquidator of an insolvent business to seek the sanction of the creditors committee/court/creditors before exercising any Schedule 4 powers, nor a Trustee in Bankruptcy before exercising any Schedule 5 powers.
Creditors can now extend an Administration by 12 months by resolution (previously this was only 6 months).
Court approval is no longer required to pay a distribution solely under the Prescribed Part.
However, exiting Administration by way of Creditors Voluntary Liquidation is no longer possible purely to make a distribution under the Prescribed Part.
Creditors Voluntary Liquidation
Any liquidator leaving office must file a progress report
No transitional provisions
There are no transitional provisions in SBEEA so these changes apply to all existing cases.
If you have any queries in relation to the content of this blog, please get in touch. This is the first of our monthly blog, so watch this space for further updates.