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Important Changes To Insolvency Legislation

As anyone involved in running a business will tell you, keeping up-to-date with changes is difficult.
Whether you’re a Company Director or a manager involved in running a business, you may feel that you’re being subjected to information overload right now. At the end of the traditional financial year and with Brexit looming large on the horizon there’s lots to be getting on with and contemplating.
Amongst all this noise, it’s understandable that you may have missed that new insolvency legislation comes into force on the 6th April 2017. This consolidates all of the existing legislation and is the biggest shake-up in the insolvency arena for over 30 years!
In brief, the rules attempt to bring insolvency into the 21st Century. They recognise the growth of electronic communications since the original Insolvency Act came into force in 1986.  The new rules move away from physical meetings and one of the main changes is that company voluntary liquidations (or Section 98 meetings as they were known) have been abolished. This brave new world includes the advent of electronic voting, virtual meetings and contacting creditors by email – in simple terms, there is no longer a requirement for creditors’ meetings.
There is also a new procedure of deemed consent, where unless an insolvency practitioner’s proposals are met with objections from 10% of creditors in value, the proposal is deemed to be approved. Therefore if you an ignore an email telling you that a supplier or debtor is going into liquidation then you may find that the company is wound up without you having your say.
These upcoming changes are important and could fundamentally affect you. Ignore them at your peril!
At Wilson Browne we can help – David Farmer is an expert in this area, able to provide advice and answer your questions.
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Extracted from website:
The new rules which will guide insolvency practice from April 2017 have been published.
Modernised and consolidated insolvency rules have been laid in Parliament and will come into force on 6 April 2017.
The new rules replace the Insolvency Rules 1986 and their 28 subsequent amendments. They have been developed working with the insolvency profession and have been approved by the Insolvency Rules Committee.
The rules have been recast to reflect modern business practice and to make the insolvency process more efficient. Changes include:
•enabling electronic communications with creditors
•removing the automatic requirement to hold physical creditors meetings, although creditors will be able to request meetings
•enabling creditors to opt out of further correspondence and for small dividends to be paid by the office holder without requiring a formal claim from creditors
Further details will be available in the Explanatory Memorandum, which is published alongside the Rules. We have also published a table of derivations (PDF, 426KB, 25 pages) .
The rules will apply in England and Wales. A parallel project to modernise the Scottish insolvency rules is currently underway with the Scottish Government. We are continuing to work on consequential amendments to other related legislation, including the Insolvent Partnerships Order.
Preparing for the introduction of the modernised rules
We will continue to support the insolvency profession to prepare for the introduction of the new rules. Our staff have taken part in a number of roadshows organised by the ICAEW and the Insolvency Practitioners Association, amongst others.
In November we will also launch an online community where you can ask questions of our technical team and share your comments with other insolvency professionals.
For a free initial discussion with no obligation call David Farmer today on 01536 410014 or contact him via email