HC Deb 30 October 1986 vol 103 cc535-8

Power to petition for winding up orders (1) On a petition presented by the Secretary of State by virtue of this section, the court having jurisdiction under the Insolvency Act 1986 may wind up an authorised person or appointed representative to whom this subsection applies if—

  1. (a) the person is unable to pay his debts within the meaning of section 123 or, as the case may be, section 221 of that Act; or
  2. (b) the court is of the opinion that it is just and equitable that the person should be wound up.
(2) Subsection (1) above applies to any authorised person, any person whose authorisation is suspended under section 27 above or who is the subject of a direction under section 32(1)(b) above or any person or appointed representative who is—
  1. (a) a company within the meaning of section 735 of the Companies Act 1985;
  2. (b) an unregistered company within the meaning of section 220 of the Insolvency Act 1986;
  3. (c) an overseas company within the meaning of section 744 of the Companies Act 1985; or
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  5. (d) a partnership.
(3) For the purposes of a petition under subsection (1) above a person who defaults in an obligation to pay any sum due and payable under any investment agreement shall be deemed to be unable to pay his debts. (4) Where a petition is presented under subsection (1) above for the winding up of a partnership on the ground mentioned in paragraph (b) of subsection (1) above or, in Scotland, on a ground mentioned in paragraph (a) or (b) of that subsection, the court shall have jurisdiction arid the Insolvency Act 1986 shall have effect as if the partnership were an unregistered company within the meaning of section 220 of that Act. (5) The Secretary of State shall not present a petition under subsection (1) above for the winding up of any person who is an authorised person by virtue of membership of a recognised self-regulating organisation or certification by a recognised professional body and is subject to the rules of the organisation or body in the carrying on of all investment business carried on by him, unless that organisation or body has consented to his doing so. No. 133, after clause 66, insert the following new clause—

"Winding up orders: Northern Ireland.

.—(1) On a petition presented by the Secretary of State by virtue of this section, the High Court in Northern Ireland may wind up an authorised person or appointed representative to whom this subsection applies if—

  1. (a) the person is unable to pay his debts within the meaning of Article 480 or, as the case may be, Article 616 of the Companies (Northern Ireland) Order 1986; or
  2. (b) the court is of the opinion that it is just and equitable that the person should be wound up.
(2) Subsection (1) above applies to any authorised person, any person whose authorisation is suspended under section 27 above or who is the subject of a direction under section 32(1) (b) above or any appointed representative who is—
  1. (a) a company within the meaning of Article 3 of the Companies (Northern Ireland) Order 1986;
  2. (b) an unregistered company within the meaning of Article 615 of that Order; or
  3. (c) a Part XXIII company within the meaning of Article 2 of that Order; or
  4. (d) a partnership.
(3) For the purposes of a petition under subsection (1) above a person who defaults in an obligation to pay any sum due and payable under any investment agreement shall be deemed to be unable to pay his debts. (4) Where a petition is presented under subsection (1) above for the winding up of a partnership on the ground mentioned in paragraph (b) of subsection (1) above, the High Court in Northern Ireland shall have jurisdiction and the Companies (Northern Ireland) Order 1986 shall have effect as if the partnership were an unregistered company within the meaning of Article 615 of that Order. (5) The Secretary of State shall not present a petition under subsection (1) above for the winding up of any person who is an authorised person by virtue of membership of a recognised self-regulating organisation or certification by a recognised professional body and is subject to the rules of the organisation or body in the carrying on of all investment business carried on by him, unless that organisation or body has consented to his doing so. No. 134, after clause 66, insert the following new clause—

("Power to petition for administration orders.

A petition may be presented under section 9 of the Insolvency Act 1986 (applications for administration orders) in relation to a company to which section 8 of that Act applies which is an authorised person, a person whose authorisation is suspended under section 27 above or who is the subject of a direction under section 32(1)(b) above or an appointed representative—

  1. (a) in the case of an authorised person who is an authorised person by virtue of membership of a recognised self-regulating organisation or certification by a recognised professional body, by that organisation or body; and
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  3. (b) in the case of an appointed representative or an authorised person who is not authorised as mentioned in paragraph (a) above or is so authorised but is not subject to the rules of the organisation or body in question in the carrying on of all investment business carried on by him, by the Secretary of State."
No. 189, in clause 96, page 76, line 16, at end insert— (f) section (Communication by auditor with supervisory authorities) (2) above;". No. 331, in clause 150, page 119, line 13, leave out 3 of the Insolvency Act 1985") and insert 391 of the Insolvency Act 1986". No. 377, after clause 165, insert the following new clause—

"Power to petition for winding up or administration order on information obtained under Act 1985 c.6

.—(1) In section 440 of the Companies Act 1985

  1. (a) after the words "section 437" there shall be inserted the words "above or section 81 of the Financial Services Act 1986; and
  2. (b) after the words "448 below" there shall be inserted the words "or section 92 of that Act".
(2) In section 8 of the Company Directors Disqualification Act 1986
  1. (a) after the words "the Companies Act" there shall be inserted the words "or section 81 or 147 of the Financial Services Act 1986"; and
  2. (b) for that words "the Act" there shall be substituted the words "the Companies Act or section 92 of the Financial Services Act 1986".
(3) In Article 433 of the Companies (Northern Ireland) Order 1986—
  1. (a) after the words "Article 430" there shall be inserted the words "or section 81 of the Financial Services Act 1986"; and
  2. (b) after the word "441" there shall be inserted the words "or section 92 of that Act"."
No. 446, in schedule 8, page 168, line 5, at end insert— () The powers conferred by section [Power to petition for winding up orders] of this Act shall not be exercisable in relation to a regulated insurance company. No. 527, in schedule 9, page 199, line 10, leave out 1985" and insert 1986, the Company Directors Disqualification Act 1986". No. 528, in page 199, line 41, leave out 3 of the Insolvency Act 1985 and insert— 391 of the Insolvency Act 1986".

Mr. Howard

This group of amendments concerns the position of authorised businesses which become insolvent. The first amendment, to clause 42, concerns a bankruptcy order or winding-up order relating to an authorised person who operates as a sole trader or partnership. In these circumstances, the authorisation to carry on investment business under which that firm has operated will not be transferable with the business to the trustee in bankruptcy or liquidator appointed by the court. As the trustee will already have satisfied the "fit and proper" test imposed by the Insolvency Act 1986 to qualify as an insolvency practitioner, an exemption from any authorisation requirement in these limited circumstances is reasonable.

Amendments in this group also enable the Secretary of State or agency to petition the court for the winding-up of an authorised person which is a company or partnership, if it cannot pay its debts or if the court considers that it is just and equitable to do so.

Provision is also made to enable any regulator to petition the court for appointment of an administrator under the Insolvency Act 1986 to take over the affairs of an authorised business which is a company. The court will have to be satisfied that the criteria set out in the Insolvency Act 1986 for the appointment of an administrator are fulfilled before it grants such an application.

The new clause after clause 165 contains technical amendments to allow information obtained under powers given in this Bill to be used in the exercise of powers conferred by the Companies Act.

Question put and agreed to.

Subsequent Lords amendments agreed to.

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