Small Business, Enterprise & Employment Act 2015
The Small Business, Enterprise & Employment Act 2015 has been given Royal Assent in Parliament this quarter which means there have been a number of changes that need to be acknowledged and understood going forward.
A new approach to the reporting of director misconduct by liquidators is being introduced which includes adding two new grounds for disqualifying a director in the UK against a person convicted of a company-related offence overseas and also against a person who has instructed a disqualified director.
This change means that there is a broader range of matters for a court to consider when assessing if disqualification is the correct punishment for the nature of their misconduct.
The Secretary of State will have new powers to be able to seek compensation against a disqualified director if their misconduct for which they were disqualified for caused identifiable loss to creditors. Liquidators will also be able to assign certain legal claims to third parties such as creditors.
Insolvency proceedings are going to increase the use of modern communication by being able to hold virtual meetings and electronic voting. The requirement to hold physical meetings in every case will be removed however creditors will still be able to ask for a physical meeting if they require one.
Changes to Company Administration
Following on from the Graham Review into Pre-Pack Administrations, a reserve power has been taken to either prohibit administration sales to connected parties or to be able to impose conditions to allow connected party sales to proceed. It must be noted however that these powers would only be used if the measures noted in the Graham report prove unsuccessful.
Insolvency Practitioners Regulation
A clearer framework within which an Insolvency Practitioner can carry out their duties will provide the Insolvency Service with a legislative framework to hold the regulators to account.
One of the new frameworks will be Insolvency Practitioners being required to provide up-front fees for the entirety of the liquidation in order to help avoid un-reasonable costs. This new framework will also enable a range of sanctions to make sure action is taken if actions are not in accordance with the regulatory objectives.
Finally the Insolvency Service will be able to apply directly to court in order to sanction an Insolvency Practitioner where it is in the public’s best interest to do so.
If you require any advice or help with regards to the changes mentioned in this article then please contact us today on 01455 555444 or email firstname.lastname@example.org.