The Insolvent Partnerships Order 1994

PART IGENERAL

Citation, commencement and extent

1.—(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.

Interpretation: definitions

2.—(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(1);

“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—

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

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(2)

“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(3);

“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(4);

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

“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—

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.

Interpretation: expressions appropriate to companies

3.—(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.

PART IIVOLUNTARY ARRANGEMENTS

Voluntary arrangement of insolvent partnership

4.—(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.

Voluntary arrangements of members of insolvent partnership

5.—(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.

PART IIIADMINISTRATION ORDERS

Administration order in relation to insolvent partnership

6.—(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.

PART IVCREDITORS' ETC. WINDING-UP PETITIONS

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

7.—(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.

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

8.—(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.

PART VMEMBERS' PETITIONS

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

9.  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.

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

10.—(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.

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

11.—(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.

PART VIPROVISIONS APPLYING IN INSOLVENCY PROCEEDINGS IN RELATION TO INSOLVENT PARTNERSHIPS

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

12.  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.

Deposit on petitions

13.—(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.

Supplemental powers of court

14.—(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(5) 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(6) or section 92(1)(a) of the Banking Act 1987(7) 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.”.

Meaning of “act as insolvency practitioner”

15.—(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.

PART VIIDISQUALIFICATION

Application of Company Directors Disqualification Act 1986

16.  Where an insolvent partnership is wound up as an unregistered company under Part V of the Act, the provisions of sections 6 to 10(8), 15, 19(c) and 20 of, and Schedule 1(9) 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.

PART VIIIMISCELLANEOUS

Forms

17.—(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.

Application of subordinate legislation

18.—(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.

Supplemental and transitional provisions

19.—(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(10) 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(11) (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(12) 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.

Revocation

20.  The Insolvent Partnerships Order 1986 is hereby revoked.