Insolvency Act 1986

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The Insolvency Act 1986 is the principal legislation governing corporate and personal insolvency in England & Wales. It provides the legal framework for administration, liquidation, company voluntary arrangements, receivership, bankruptcy, and individual voluntary arrangements. The Act sets out the duties and powers of insolvency practitioners, the rights of creditors, and the consequences for directors of insolvent companies.

Pwyntiau allweddol

• Administration — Schedule B1 provides for administration orders to rescue companies or achieve better results for creditors
• Liquidation — Parts IV and V govern compulsory and voluntary winding up of companies
• Company Voluntary Arrangements (CVAs) — Part I allows companies to propose binding arrangements with creditors
• Wrongful trading — s.214 imposes personal liability on directors who continue trading when they knew or ought to have known there was no reasonable prospect of avoiding insolvent liquidation
• Fraudulent trading — s.213 targets those knowingly party to carrying on business with intent to defraud creditors
• Transactions at an undervalue (s.238) and preferences (s.239) may be set aside by a liquidator or administrator
• Bankruptcy — Part IX governs personal insolvency, including the making of bankruptcy orders and the role of the trustee in bankruptcy
• Individual Voluntary Arrangements (IVAs) — Part VIII allows individuals to propose formal arrangements with creditors

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