A fundamental consideration when embarking on any litigation is whether the defendant will be able to pay. In most cases, this is really a question of whether the defendant is insured (although in some cases a defendant may be uninsured and yet still have the means to pay).

What happens if the defendant is insolvent?

In this article the authors consider the practical aspects of the UK-wide rules for registration of company charges, including features of the new e-filing regime. Statute references are to the Companies Act 2006.

WHY REGISTER?

When you are focused on the day-to-day running of a business, it can be all too easy to miss the warning signs that you may be at risk of insolvency. Often, the signs might be interpreted as a “blip” or a “minor issue” paired with the assumption that the company can trade out of it. In this article, Stephen Young identifies some of the key warning signs that directors should be aware of.

With the aim of improving transparency around ownership and control of companies, all UK unquoted and limited liability partnerships are required to maintain new registers of People with Significant Control (PSC). The details should be recorded in the company’s own PSC register and are to be filed at Companies House.

Anyone who satisfies at least one of the following conditions:

From April 2016 companies and limited liability partnerships (“LLPs”) (except for publicly traded companies) will be required to create and maintain a register of persons with “significant control” over the company (“PSC Register”) and in due course send that information to Companies House where it will be publically searchable.

What’s the purpose of the new regulations?

An administrators’ appointment automatically ends after one year, unless steps are taken to extend it. The Enterprise Act introduced a new streamlined process for moving quickly and easily from administration to creditors’ voluntary liquidation, just by filing a notice at Companies House under para 83(3) Sch B1 of the Insolvency Act (IA)1986. Problems have arisen where that notice has been filed very late in the day and not received before the administrators’ term of office automatically ends.

Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings comes into effect on 26 June 2017 for insolvency proceedings that are opened on or after that date. The Recast Regulation replaces the EC Regulation (1346/2000) on insolvency proceedings and has direct effect in the UK until such time as the UK leaves the EU.

In our update this month we take a look at three cases that provide helpful clarification from the courts on issues that will be of interest to the insolvency and fraud industry - the key message from each case confirms:

Defendant's threat of insolvency did not prevent adjudicator's decision being enforced.