Under section 359 of the Act (Petitions), the FSA may present a petition to the court under section 9 of the 1986 Act or article 22 of the 1989 Order, for an administration order in relation to a company or insolvent partnership which:
The court may make an administration order only if it is satisfied that a company or a partnership is, or is likely to become, unable to pay its debts. Sections 359(3) and (4) of the Act provide that a company or partnership is to be treated as unable to pay its debts for the purpose of section 8(1)(a) of the 1986 Act or article 21(1)(a) of the 1989 Order if it is in default on an obligation to pay a sum which is due and payable under an agreement where the making or performance of this agreement constitutes or is part of a regulated activity carried on by the company or partnership.
In addition, a court may only make an administration order if it considers that making the order would be likely to achieve one or more of the following purposes:
the approval of a company voluntary arrangement;
Under section 8(4) of the 1986 Act and article 21(4) of the 1989 Order, no administration order can be made in relation to an insurance company (within the meaning of the Insurance Companies Act 1982). Section 360 of the Act (Insurers) empowers the Treasury to order that provisions, or specified provisions, of the 1986 Act and the 1989 Order relating to administration orders are to apply in relation to insurance companies, with such modification as may be specified. As at the date of publication of this manual the Treasury has not yet made such an order.
Under section 355 of the Act (Interpretation of this Part), a 'body' is any body of persons over which the court has jurisdiction under any provision of the 1986 Act or the 1989 Order, or made under that Act or Order. It does not however include a body which is a building society, friendly society or industrial and provident society. For the purpose of section 367 of the Act, 'body' includes a partnership.
Section 367(4) and (5) of the Act state that the body is to be treated as unable to pay its debts, within the meaning of section 123 or 221 of the 1986 Act or article 103 or 185 of the 1989 Order, if it is indefault on an obligation to pay a sum due and payable under an agreement where the making or performance of this agreement constitutes or is part of a regulated activity carried on by the body.
an authorised person; and
the FSA may apply to the court, under section 112 of the 1986 Act, or article 98 of the 1989 Order, to determine any question which arises in the winding up of a company or to request the court to exercise all or any of the powers which the court might exercise if it were winding up the company.
Under section 365(7) of the Act, if, while a company is being voluntarily wound up, a compromise or arrangement is proposed between the company and its creditors, or any class of creditors, the FSA may apply to the court, under section 425 of the Companies Act 1985 or article 418 of the Companies (Northern Ireland) Order 1986, for an order requiring the convening of a meeting of the creditors or class of creditors
Under section 366 of the Act (Insurers effecting or carrying out long-term contracts of insurance), an insurance company carrying on long term insurance business may not be wound up voluntarily without the FSA's consent. If, in the case of such a company, notice of a general meeting is given specifying the intention to propose a resolution for voluntary winding up, a director of the company must notify the FSA as soon as practicable after he becomes aware of it. Where a moratorium is in place in relation to a company under Schedule A1 to the 1986 Act, the FSA may not petition for an administration order or winding up order in relation to the company while the moratorium is effective.
Under section 372 of the Act (Petitions), the FSA has power to present a petition to the court, under section 264 of the 1986 Act or article 238 of the 1989 Order, for the bankruptcy of an individual or, in Scotland, under section 5 of the 1985 Act for the sequestration of the estate of an individual. A petition may be presented only on the grounds that the individual appears to be unable to pay a regulated activity debt or appears to have no reasonable prospect of being able to pay a regulated activity debt.
A regulated activity debt is an obligation to pay a sum due and payable under an agreement where the making or performance of this agreement constitutes or is part of a regulated activity carried on by the individual.
the FSA has served a demand on him which requires him to establish, to the satisfaction of the FSA, that there is a reasonable prospect of his being able to pay a regulated activity debt, when it falls due; and
at least three weeks have elapsed since the demand was served; and
the individual has not complied with the demand and the court has not set it aside.
A demand (see ENF 10.5.15 G (1)) is to be treated for the purposes of the 1986 Act or the 1989 Order as if it were a statutory demand under section 268 of the 1986 Act or article 242 of the 1989 Order. In relation to petitions served under section 5 of the 1985 Act, the FSA is to be treated as a qualified creditor and, when the petition is presented on the grounds that the individual appears unable to pay a regulated activity debt, that ground is to constitute apparent insolvency for the purposes of the 1985 Act.