Explanatory note

The Insolvency Act 1986 (Prescribed Part) Order 2003/2097 sets out the method of calculation of the prescribed part and is subject to a limit. The prescribed part is the part of the property of a company that a liquidator, administrator or receiver must reserve for unsecured creditors, under section 176A of the Insolvency Act 1986, and which would otherwise be available to satisfy claims secured by a floating charge.

This Order increases the limit on the value of the prescribed part from £600,000 to £800,000.

The increased limit does not apply where the company’s net property is available to be distributed to the holder of a first ranking floating charge created before this Order comes into force.

A full impact assessment has not been published for this instrument as it has minimal impact on the private, voluntary or public sector.

An Explanatory Memorandum has been prepared and is available alongside this Order at www.legislation.gov.uk. Hard copies of the Explanatory Memorandum are available from the Insolvency Service, Floor 16, 1 Westfield Avenue, London E20 1JN.