Section 426: Winding up under the 1986 Act, Proceeds of Crime Act 2002

In this section "company" means any company which may be wound up under the 1986 Act.

If an order for the winding up of a company is made or it passes a resolution for its voluntary winding up, the functions of the liquidator (or any provisional liquidator) are not exercisable in relation to the following property—

property for the time being subject to a restraint order which was made under section 41, 120 or 190 before the relevant time;

property for the time being detained under or by virtue of section 44A, 47J, 47K, 47M, 47P, 122A, 127J, 127K, 127M, 127P, 193A, 195J, 195K, 195M or 195P;

property in respect of which an order under section 50, 128(3) or 198 is in force;

property in respect of which an order under section 67A, 131A or 215A is in force.

Subsection (2)(a) applies to heritable property in Scotland only if the restraint order is recorded in the General Register of Sasines or registered in the Land Register of Scotland before the relevant time.

If an order for the winding up of a company is made or it passes a resolution for its voluntary winding up the powers referred to in subsection (5) must not be exercised in the way mentioned in subsection (6) in relation to any property—

which is held by the company, and

in relation to which the functions of the liquidator are exercisable.

These are the powers—

the powers conferred on a court by sections 41 to 67B, the powers conferred on an appropriate officer by section 47C and the powers of a receiver appointed under section 48 or 50 ;

the powers conferred on a court by sections 120 to 136 and Schedule 3 , the powers conferred on an appropriate officer by section 127C and the powers of an administrator appointed under section 125 or 128(3);

the powers conferred on a court by sections 190 to 215B, the powers conferred on an appropriate officer by section 195C and the powers of a receiver appointed under section 196 or 198 .

The powers must not be exercised—

so as to inhibit the liquidator from exercising his functions for the purpose of distributing property to the company's creditors;

so as to prevent the payment out of any property of expenses (including the remuneration of the liquidator or any provisional liquidator) properly incurred in the winding up in respect of the property.

But nothing in the 1986 Act must be taken to restrict (or enable the restriction of) the exercise of the powers referred to in subsection (5).

For the purposes of the application of Parts 4 and 5 of the 1986 Act (winding up) to a company which the Court of Session has jurisdiction to wind up, a person is not a creditor in so far as any sum due to him by the company is due in respect of a confiscation order made under section 6, 92 or 156.

The relevant time is—

if no order for the winding up of the company has been made, the time of the passing of the resolution for voluntary winding up;

if such an order has been made, but before the presentation of the petition for the winding up of the company by the court such a resolution has been passed by the company, the time of the passing of the resolution;

if such an order has been made, but paragraph (b) does not apply, the time of the making of the order.

In a case where a winding up of a company commenced or is treated as having commenced before 29 December 1986, this section has effect with the following modifications—

in subsections (1) and (7) for "the 1986 Act" substitute ;" the Companies Act 1985 "

in subsection (8) for "Parts 4 and 5 of the 1986 Act" substitute ." Parts 20 and 21 of the Companies Act 1985 "

Section 426: Winding up under the 1986 Act

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