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On 6 April 2017, the rules on acceptance of appointments of receivers over assets owned by a limited company changed. Were you aware of this? If not, it might be worth checking that your acceptance forms comply.

The main points are:

  1. Section 33 Insolvency Act 1986 (“IA”) applies to the appointment of two or more persons as joint receivers of a company’s property, subject to such modifications as may be prescribed by the rules. Section 33(1) IA provides that an appointment of a person as a receiver of a company’s property is of no effect unless it is accepted by that person before the end of the business day next following that on which the instrument of appointment is received by him or on his behalf and subject to this, is deemed to be made at the time at which the instrument of appointment is so received   
  2. Rule 4.1(3) of the Insolvency Rules (England and Wales) Rules 2016 (“Rules”) requires that a person who is appointed as a receiver of a company’s property and accepts the appointment in accordance with s33(1)(a) IA, but not in writing, must confirm acceptance in writing to the person making the appointment within five business days   
  3. The appointment is only valid if it is accepted in this timescale   
  4. Where it is a joint appointment it has to be accepted by each receiver separately so there should be two signatures, even if the same person signs once on their own behalf and a second time on their co-receivers behalf   
  5. If you are accepting on someone else’s behalf it is preferable to have prior written authorisation   
  6. Rule 4.1(4) provides the acceptance “must” contain all of the following: the name and address of the appointer, the name and address of the appointee, the name of the company concerned, the time and date of receipt of the instrument of appointment and the time and date of acceptance   
  7. It would be advisable to incorporate the additional required information pursuant to rule 1.6, namely an e-mail address or telephone number through which the receiver may be contacted   
  8. Best practice would suggest that the same approach should be used for appointments over property owned by private individuals.

The rules came in to force on 6 April 2017 and therefore you should ensure that your acceptances comply, if your acceptances don't comply, it's not necessarily fatal but it might be worth seeking further advice. Get in touch with our specialist Restructuring & Insolvency Team to learn how they can help get your business up to speed.

 

 

Key Contact

Doug Robertson