Insolvent Partnerships Order 1986
| Jurisdiction | UK Non-devolved |
| Citation | SI 1986/2142 |
1986 No. 2142
INSOLVENCY
The Insolvent Partnerships Order 19868thDecember 1986
8thDecember 1986
29thDecember 1986
The Lord Chancellor, in exercise of the powers conferred on him by section 420 of the Insolvency Act 1986(a) and section 21(2) of the Company Directors Disqualification Act 1986(b) and of all other powers enabling him in that behalf, with the concurrence of the Secretary of State, hereby makes the following Order:—
PART 1
GENERAL
Short title, commencement and extent
1.— (1) This Order may be cited as the Insolvent Partnerships Order 1986 and shall come into force on 29th December 1986.
(2) This Order—
(a) in the case of company insolvency and insolvent partnerships being wound up under Part V of the Act as unregistered companies, relates to companies which the courts in England and Wales have jurisdiction to wind up; and
(b) in the case of individual insolvency, extends to England and Wales only.
Interpretation
2.— (1) In this Order—
"the Act" means the Insolvency Act 1986;
"corporate member" means an insolvent member which is a company;
(a) 1986 c.45.
(b) 1986 c.46.
"individual member" means an insolvent member who is an individual;
"insolvent member" means a member of an insolvent partnership, against whom an insolvency petition is being or has been presented;
"insolvency order" means—
(a) in the case of an insolvent partnership or a corporate member, a winding-up order; and
(b) in the case of an individual member, a bankruptcy order;
"insolvency petition" means—
(a) in the case of a petition presented against a corporate member, a petition for its winding up by the court; and
(b) in the case of a petition presented against an individual member, a petition to the court for a bankruptcy order to be made against the 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; and
"responsible insolvency practitioner" means—
(a) in winding up, the liquidator; and
(b) in bankruptcy, the trustee,
and in either case includes the official receiver when so acting.
(2) The definitions in paragraph (1) above other than the first definition shall be added to those in section 436 of the Act.
(3) A Form referred to in this Order by number means the Form so numbered in Schedule 3 to this Order.
Members or other persons having control or management of business of insolvent partnership
3. Where an insolvent partnership is being wound up under Part V of the Act as an unregistered company, any member or former member of the partnership or any other person who has or has had control or management of the partnership business—
(a) shall for the purposes of the provisions of the Act and the Company Directors Disqualification Act 1986 applied by this Order be deemed to be an officer and director of the company; and
(b) shall deliver up to the liquidator of the partnership for the purposes of the exercise of the liquidator's functions under the provisions referred to in paragraph (a) above possession of any partnership property within the meaning of the Partnership Act 1890(a) which he holds for the purposes of the partnership.
Verification of petition for winding up insolvent partnership
4. Every affidavit verifying the petition for the winding up of an insolvent
(a) 1890 c.39.
partnership under Part V of the Act shall include the names in full and addresses of all members of the partnership so far as known to the petitioner.
Application of Insolvency Rules, Insolvency Regulations and Insolvency Fees Order to provisions of the Act applied in relation to insolvent partnerships
5.— (1) The Insolvency Rules 1986(a), the Insolvency Regulations 1986(b) and the Insolvency Fees Order 1986(c) apply with the necessary modifications for the purpose of giving effect to the provisions of Parts I and IV to XI of the Act which are applied in relation to insolvent partnerships with the modifications specified in this Order.
(2) In the case of any conflict between any provision of the Insolvency Rules 1986 and any provision of this Order, the latter provision shall prevail.
(3) Sections 414(4) and 415(3) of the Act shall apply with the following modifications:—
(a) where an order provides for any sum to be deposited on presentation of a winding-up or bankruptcy petition, that sum shall, in the case of an insolvent partnership, only be required to be deposited in respect of the petition for winding up the partnership; and
(b) production of any receipt for the sum deposited upon presentation of the petition for winding up the partnership shall suffice for the filing in court of an insolvency petition against an insolvent member.
Application of provisions of the Company Directors Disqualification Act 1986 in relation to insolvent partnerships
6. 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 apply in relation to the partnership as if any member of the partnership were a director of a company, and the partnership were a company as defined by section 22(2)(b) of that Act.
PART 2
WINDING UP OF INSOLVENT PARTNERSHIP ONLY
7. The provisions of Part V of the Act specified in Schedule 1 to this Order shall apply in relation to the winding up of insolvent partnerships as unregistered companies with the modifications specified in that Schedule where no insolvency petition is presented by the petitioner against an insolvent member.
(a) S.I. 1986/1925.
(b) S.I. 1986/1994.
(c) S.I. 1986/2030.
PART 3
WINDING UP OF INSOLVENT PARTNERSHIP INVOLVING INSOLVENCY PETITIONS AGAINST TWO OR MORE INSOLVENT MEMBERS
Application of provisions of the Act with modifications
8.— (1) Sections 220(1) and 221 of the Act shall apply in relation to the winding up of insolvent partnerships as unregistered companies where an insolvency petition is presented by the petitioner against two or more insolvent members, with the following modifications:—
(a) in section 220(1), before the words "any association" there shall be inserted the words "any insolvent partnership,";
(b) for section 221(1) there shall be substituted the following:—
"(1) Subject to the provisions of this Part, any insolvent partnership which has a principal place of business in England and Wales may be wound up as an unregistered company under this Act; and all the provisions of this Act and the Companies Act about winding up apply to the winding up of such a partnership as an unregistered company with the exceptions and additions mentioned in the following subsections and in Part I of Schedule 2 to the Insolvent Partnerships Order 1986."; and
(c) for section 221(5) there shall be substituted the following:—
"(5) The circumstances in which an insolvent partnership may be wound up are that the partnership is unable to pay its debts.".
(2) All the provisions of the Act and the Companies Act about winding up of companies by the court shall apply in relation to the winding up of a corporate member where the insolvent partnership is wound up as an unregistered company under paragraph (1) above, with the modifications specified in Part II of Schedule 2 to this Order, and all the provisions of the Act about bankruptcy of individuals shall apply in relation to the bankruptcy of an individual member, with the modifications specified in Part III of Schedule 2 to this Order.
Priority of expenses of insolvency proceedings where insolvency orders are made in relation to an insolvent partnership
9.— (1) The provisions of paragraphs (2) to (5) below shall apply as regards priority of expenses of insolvency proceedings, where insolvency orders are made in relation to an insolvent partnership, incurred up to and including the date of the appointment of a person to act as liquidator of the partnership and to act as the responsible insolvency practitioner in relation to any insolvent member against whom an insolvency order has been made.
(2) The joint estate of an insolvent partnership shall be applicable in the first instance in payment of the joint expenses of the insolvency proceedings in winding up the partnership, and the separate estate of each insolvent member shall be applicable in the first instance in payment of the separate expenses of the insolvency proceedings relating to that member.
(3) Where the joint estate of the partnership is insufficient for the payment in full of the joint expenses of the insolvency proceedings in winding up the partnership incurred up to and including the date mentioned in paragraph (1) above, the unpaid balance shall be apportioned equally between the separate estates of the insolvent members and form part of the expenses to be paid out of those estates.
(4) Where any separate estate of an insolvent member is insufficient for the payment in full of the expenses of the insolvency proceedings so incurred to be paid out of that estate, the unpaid balance shall form part of the expenses to be paid out of the joint estate of the partnership.
(5) Where after the transfer of any unpaid balance in accordance with the preceding paragraphs of this Article any estate is insufficient for the payment in full of the expenses to be paid out of that estate, the balance then remaining unpaid shall be apportioned equally between the other estates, and if after such an apportionment one or more estates are insufficient for the payment in full of the expenses to be paid out of those estates, the total of the unpaid balances of the expenses to be paid out of those estates shall continue to be apportioned equally between the other estates until provision is made for the payment in full of the expenses or there is no estate available for the payment of the balance finally remaining unpaid, in which case it abates in equal proportions between the estates which are then insufficient.
(6) The provisions of...
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