The Small Business, Enterprise and Employment Act 2015 received Royal Assent on 26 March 2015.
The changes it introduces will come into force over in dribs and drabs over the next few months and years. There are however some insolvency specific changes that will come into force on 26 May 2015. A summary of such changes is provided below:
1. Administrations
The creditors of a company in administration will be able to extend the administration for a period of 12 months (currently six months) without the administrator having to apply to court.
An administrator will no longer need to apply to court for permission to distribute the prescribed part and it will not be possible to move from administration to CVL if the only distribution to be made to unsecured creditors will be through the prescribed part.
The Secretary of State will be given reserve powers to regulate pre-pack sales to connected parties.
2. Small Debts
A creditor owed a small debt will no longer need to formally prove in the insolvency to potentially receive a distribution. It is currently intended that a “small debt” will mean anything less than £1,000.
3. Voluntary Arrangements
Where, in the case of an individual voluntary arrangement (IVA) no interim order has been sought by the debtor it will be made clear that the period in which a creditor can challenge a decision of creditors in relation to the IVA proposal will be 28 days from the date of the decision.
Fast Track IVAs will be abolished.
5. Sanction
A Liquidators and Trustee in Bankruptcy’s will no longer require the sanction of the court or creditors to exercise powers detailed in Schedule 4 and 5 to the IA 1986.
6. Progress Reports
Confirmation that a progress report must be filed in a voluntary liquidation where the liquidator changes in the first 12 months.
The general duties of directors detailed in the Companies Act 2006 will also apply to shadow directors from 26 May 2015 unless they are incapable of applying.
Further guidance will be produced shortly on other changes that will be introduced by the Act.
Ramsdens dedicated and personable Business Recovery & Insolvency Team at Ramsdens can provide no-nonsense and cost effective advice. If you require advice or further information in relation to the contents of this article please contact Jennie Blagg at jennifer.blagg@ramsdens.co.uk. You can also follow Jennie on Twitter to keep up-to-date with everything #insolvency.