{
  "url": "https://openlegislation.uk/insolvent-partnerships-order-1994/schedule-1/part-II",
  "json_url": "https://openlegislation.uk/insolvent-partnerships-order-1994/schedule-1/part-II.json",
  "legislation": "uksi/1994/2421",
  "legislation_title": "The Insolvent Partnerships Order 1994",
  "legislation_url": "https://openlegislation.uk/insolvent-partnerships-order-1994",
  "path": "schedule/1/part/II",
  "kind": "part",
  "number": "II",
  "heading": "Modified Provisions of Schedule A1 to the Act",
  "text": "The following provisions of Schedule A1 to the Act are modified so as to read as follows:\n“3 (1) An insolvent partnership meets the requirements of this paragraph if the qualifying conditions are met—\n(a) in the year ending with the date of filing, or\n(b) in the tax year of the insolvent partnership which ended last before that date.\n(2) For the purposes of sub-paragraph (1) the qualifying conditions are met by an insolvent partnership in a period if, in that period, it satisfies two or more of the requirements set out in sub-paragraph (3).\n(3) The qualifying conditions referred to in this paragraph are—\n(a) turnover of not more than £5.6 million,\n(b) assets of not more than £2.8 million, and\n(c) no more than 50 employees.\n(4) For the purposes of sub-paragraph (3)—\n(a) the total of turnover is the amount which is or would be, as the case may be, entered as turnover in the partnership’s tax return,\n(b) the total of assets is the amount which—\n(i) in the case of the period referred to in paragraph 3(1)(a), is entered in the partnership’s statement of affairs which must be filed with the court under paragraph 7(1)(b), or\n(ii) in the case of the period referred to in paragraph 3(1)(b), would be entered in the partnership’s statement of affairs had it prepared such a statement on the last day of the period to which the amount for turnover is calculated for the purposes of paragraph 3(4)(a),\n(c) the number of employees is the average number of persons employed by the insolvent partnership—\n(i) in the case of the period referred to in paragraph 3(1)(a), in the period ending with the date of filing,\n(ii) in the case of the period referred to in paragraph 3(1)(b), in the period to which the amount for turnover is calculated for the purposes of paragraph 3(4)(a).\n(5) Where the period covered by the qualifying conditions in respect of the insolvent partnership is not a year the total of turnover referred to in paragraph 3(3)(a) shall be proportionately adjusted.\n(6) The average number of persons employed by the insolvent partnership shall be calculated as follows—\n(a) by ascertaining the number of persons employed by it under contracts of service for each month of the year (whether throughout the month or not),\n(b) by adding those figures together, and\n(c) by dividing the resulting figure by the number of months during which persons were so employed by it during the year.\n(7) In this paragraph—\n“tax return” means a return under section 12AA of the Taxes Management Act 1970,\n“tax year” means the 12 months beginning with 6th April in any year.\n4 (1) An insolvent partnership is excluded from being eligible for a moratorium if, on the date of filing—\n(a) the partnership is in administration,\n(b) the insolvent partnership is being wound up as an unregistered company,\n(c) there is an agricultural receiver of the insolvent partnership,\n(d) a voluntary arrangement has effect in relation to the insolvent partnership,\n(e) there is a provisional liquidator of the insolvent partnership,\n(f) a moratorium has been in force for the insolvent partnership at any time during the period of 12 months ending with the date of filing and—\n(i) no voluntary arrangement had effect at the time at which the moratorium came to an end, or\n(ii) a voluntary arrangement which had effect at any time in that period has come to an end prematurely,\n(g) a voluntary arrangement in relation to the insolvent partnership which had effect in pursuance of a proposal under section 1(3) has come to an end prematurely and, during the period of 12 months ending with the date of filing, an order under section 5(3)(a) has been made, or\n(h) an order has been made by virtue of article 11 of the Insolvent Partnerships Order 1994.\n(2) Sub-paragraph (1)(b) does not apply to an insolvent partnership which, by reason of a winding-up order made after the date of filing, is treated as being wound up on that date.\nEffect on creditors, etc.\n12 (1) During the period for which a moratorium is in force for an insolvent partnership—\n(a) no petition may be presented for the winding-up of the insolvent partnership as an unregistered company,\n(b) no meeting of the members of the partnership may be called or requisitioned except with the consent of the nominee or the leave of the court and subject (where the court gives leave) to such terms as the court may impose,\n(c) no order may be made for the winding-up of the insolvent partnership as an unregistered company,\n(d) no administration application may be made in respect of the partnership,\n(da) no administrator of the partnership may be appointed under paragraph 14 or 22 of Schedule B1,\n(e) no agricultural receiver of the partnership may be appointed except with the leave of the court and subject to such terms as the court may impose,\n(f) no landlord or other person to whom rent is payable may exercise any rights of forfeiture by peaceable re-entry in relation to premises forming part of the partnership property or let to one or more officers of the partnership in their capacity as such in respect of a failure by the partnership or one or more officers of the partnership to comply with any term or condition of the tenancy of such premises, except with the leave of the court and subject to such terms as the court may impose,\n(g) no other steps may be taken to enforce any security over the partnership property, or to repossess goods in the possession, under any hire-purchase agreement, of one or more officers of the partnership in their capacity as such, except with the leave of the court and subject to such terms as the court may impose,\n(h) no other proceedings and no execution or other legal process may be commenced or continued, and no distress may be levied, against the insolvent partnership or the partnership property except with the leave of the court and subject to such terms as the court may impose,\n(i) no petition may be presented, and no order may be made, by virtue of article 11 of the Insolvent Partnerships Order 1994, and\n(j) no application or order may be made under section 35 of the Partnership Act 1890 in respect of the insolvent partnership.\n(2) Where a petition, other than an excepted petition, for the winding-up of the insolvent partnership has been presented before the beginning of the moratorium, section 127 shall not apply in relation to any disposition of partnership property, any transfer of an interest in the insolvent partnership or alteration in status of a member of the partnership made during the moratorium or at a time mentioned in paragraph 37(5)(a).\n(3) Paragraph (a) of sub-paragraph (1) does not apply to an excepted petition and, where such a petition has been presented before the beginning of the moratorium or is presented during the moratorium, paragraphs (b) and (c) of that sub-paragraph do not apply in relation to proceedings on the petition.\n(4) For the purposes of this paragraph, “excepted petition” means a petition under—\n(a) article 7(1) of the Insolvent Partnerships Order 1994 presented by the Secretary of State on the grounds mentioned in subsections (b), (c) and (d) of section 124A of this Act,\n(b) section 72 of the Financial Services Act 1986 on the ground mentioned in subsection (1)(b) of that section,\n(c) section 92 of the Banking Act 1987 on the ground mentioned in subsection (1)(b) of that section, or\n(d) section 367 of the Financial Services and Markets Act 2000 on the ground mentioned in subsection (3)(b) of that section.\nDisposal of charged property, etc\n20 (1) This paragraph applies where—\n(a) any partnership property of the insolvent partnership is subject to a security, or\n(b) any goods are in possession of one or more officers of the partnership in their capacity as such under a hire-purchase agreement.\n(2) If the holder of the security consents, or the court gives leave, the insolvent partnership may dispose of the property as if it were not subject to the security.\n(3) If the owner of the goods consents, or the court gives leave, the insolvent partnership may dispose of the goods as if all rights of the owner under the hire-purchase agreement were vested in the members of the partnership.\n(4) Where property subject to a security which, as created, was a floating charge is disposed of under sub-paragraph (2), the holder of the security has the same priority in respect of any partnership property directly or indirectly representing the property disposed of as he would have had in respect of the property subject to the security.\n(5) Sub-paragraph (6) applies to the disposal under sub-paragraph (2) or (as the case may be) sub-paragraph (3) of—\n(a) any property subject to a security other than a security which, as created, was a floating charge, or\n(b) any goods in the possession of one or more officers of the partnership in their capacity as such under a hire-purchase agreement.\n(6) It shall be a condition of any consent or leave under sub-paragraph (2) or (as the case may be) sub-paragraph (3) that—\n(a) the net proceeds of the disposal, and\n(b) where those proceeds are less than such amount as may be agreed, or determined by the court, to be the net amount which would be realised on a sale of the property or goods in the open market by a willing vendor, such sums as may be required to make good the deficiency,\nshall be applied towards discharging the sums secured by the security or payable under the hire-purchase agreement.\n(7) Where a condition imposed in pursuance of sub-paragraph (6) relates to two or more securities, that condition requires—\n(a) the net proceeds of the disposal, and\n(b) where paragraph (b) of sub-paragraph (6) applies, the sums mentioned in that paragraph,\nto be applied towards discharging the sums secured by those securities in the order of their priorities.\n(8) In this paragraph “floating charge” means a floating charge created under section 5 of the Agricultural Credits Act 1928.\nEffect of approval of voluntary arrangement\n37 (1) This paragraph applies where a decision approving a voluntary arrangement has effect under paragraph 36.\n(2) The approved voluntary arrangement—\n(a) takes effect as if made by the members of the partnership at the time the creditors decided to approve the voluntary arrangement, and\n(b) binds every person who in accordance with the rules—\n(i) was entitled to vote in the qualifying decision procedure by which the creditors’ decision to approve the voluntary arrangement was made, or\n(ii) would have been so entitled if he had had notice of the procedure,\nas if he were a party to the voluntary arrangement.\n(3) If—\n(a) when the arrangement ceases to have effect any amount payable under the arrangement to a person bound by virtue of sub-paragraph (2)(b)(ii) has not been paid, and\n(b) the arrangement did not come to an end prematurely,\nthe insolvent partnership shall at that time become liable to pay to that person the amount payable under the arrangement.\n(4) Where a petition for the winding-up of the insolvent partnership as an unregistered company or a petition by virtue of article 11 of the Insolvent Partnerships Order 1994, other than an excepted petition within the meaning of paragraph 12, was presented before the beginning of the moratorium, the court shall dismiss the petition.\n(5) The court shall not dismiss a petition under sub-paragraph (4)—\n(a) at any time before the end of the period of 28 days beginning with the first day on which each of the reports ... required by paragraph 30(3) and (4) has been made to the court, or\n(b) at any time when an application under paragraph 38 or an appeal in respect of such an application is pending, or at any time in the period within which such an appeal may be brought.\nChallenge of actions of officers of insolvent partnership\n40 (1) This paragraph applies in relation to acts or omissions of the officers of a partnership during a moratorium.\n(2) A creditor or member of the insolvent partnership may apply to the court for an order under this paragraph on the ground—\n(a) that the partnership’s affairs and business and partnership property are being or have been managed by the officers of the partnership in a manner which is unfairly prejudicial to the interests of its creditors or members generally, or of some part of its creditors or members (including at least the petitioner), or\n(b) that any actual or proposed act or omission of the officers of the partnership is or would be so prejudicial.\n(3) An application for an order under this paragraph may be made during or after the moratorium.\n(4) On an application for an order under this paragraph the court may—\n(a) make such order as it thinks fit for giving relief in respect of the matters complained of,\n(b) adjourn the hearing conditionally or unconditionally, or\n(c) make an interim order or any other order that it thinks fit.\n(5) An order under this paragraph may in particular—\n(a) regulate the management by the officers of the partnership of the partnership’s affairs and business and partnership property during the remainder of the moratorium,\n(b) require the officers of the partnership to refrain from doing or continuing an act complained of by the petitioner, or to do an act which the petitioner has complained they have omitted to do,\n(c) require the summoning of a meeting of ... members of the partnership for the purpose of considering such matters as the court may direct,\n(ca) require a decision of the partnership’s creditors to be sought (using a qualifying decision procedure) on such matters as the court may direct,\n(d) bring the moratorium to an end and make such consequential provision as the court thinks fit.\n(6) In making an order under this paragraph the court shall have regard to the need to safeguard the interests of persons who have dealt with the insolvent partnership in good faith and for value.\n(7) Sub-paragraph (8) applies where—\n(a) the appointment of an administrator has effect in relation to the insolvent partnership and the appointment took effect before the moratorium came into force, or\n(b) the insolvent partnership is being wound up as an unregistered company or an order by virtue of article 11 of the Insolvent Partnerships Order 1994 has been made, in pursuance of a petition presented before the moratorium came into force.\n(8) No application for an order under this paragraph may be made by a creditor or member of the insolvent partnership; but such an application may be made instead by the administrator (or as the case may be) the liquidator.\n42 (1) If, for the purpose of obtaining a moratorium, or an extension of a moratorium, for an insolvent partnership or any of its members (a moratorium meaning in the case of an individual the effect of an application for, or the making of, an interim order under Part VIII of the Act), a person who is an officer of an insolvent partnership or an officer (which for this purpose includes a shadow director) of a corporate member in relation to which a voluntary arrangement is proposed—\n(a) makes any false representation, or\n(b) fraudulently does, or omits to do, anything,\nhe commits an offence.\n(2) Sub-paragraph (1) applies even if no moratorium or extension is obtained.\n(3) A person guilty of an offence under this paragraph is liable to imprisonment or a fine, or both.”.",
  "extent": null,
  "status": null,
  "version": "current",
  "annotations": [
    {
      "type": "F",
      "label": "F1",
      "text": "Sch. 1 substituted (1.1.2003) by The Insolvent Partnerships (Amendment) (No. 2)Order 2002 (S.I. 2002/2708), art. 1, Sch. 1 (with art. 11)"
    },
    {
      "type": "F",
      "label": "F2",
      "text": "Sum in Sch. 1 substituted (1.7.2005) by The Insolvent Partnerships (Amendment) Order 2005 (S.I. 2005/1516), arts. 1(1), 6(5)(a)"
    },
    {
      "type": "F",
      "label": "F3",
      "text": "Sum in Sch. 1 substituted (1.7.2005) by The Insolvent Partnerships (Amendment) Order 2005 (S.I. 2005/1516), arts. 1(1), 6(5)(b)"
    },
    {
      "type": "F",
      "label": "F4",
      "text": "Words in Sch. 1 substituted (1.7.2005) by The Insolvent Partnerships (Amendment) Order 2005 (S.I. 2005/1516), arts. 1(1), 6(6)"
    },
    {
      "type": "F",
      "label": "F5",
      "text": "Words in Sch. 1 substituted (1.7.2005) by The Insolvent Partnerships (Amendment) Order 2005 (S.I. 2005/1516), arts. 1(1), 6(7)"
    },
    {
      "type": "F",
      "label": "F6",
      "text": "Words in Sch. 1 Pt. 2 substituted (6.4.2017) by The Deregulation Act 2015 and Small Business, Enterprise and Employment Act 2015 (Consequential Amendments) (Savings) Regulations 2017 (S.I. 2017/540), reg. 1, Sch. 2 para. 5(2)(a) (with reg. 4)"
    },
    {
      "type": "F",
      "label": "F7",
      "text": "Words in Sch. 1 Pt. 2 substituted (6.4.2017) by The Deregulation Act 2015 and Small Business, Enterprise and Employment Act 2015 (Consequential Amendments) (Savings) Regulations 2017 (S.I. 2017/540), reg. 1, Sch. 2 para. 5(2)(b) (with reg. 4)"
    },
    {
      "type": "F",
      "label": "F8",
      "text": "Words in Sch. 1 Pt. 2 substituted (6.4.2017) by The Deregulation Act 2015 and Small Business, Enterprise and Employment Act 2015 (Consequential Amendments) (Savings) Regulations 2017 (S.I. 2017/540), reg. 1, Sch. 2 para. 5(2)(c) (with reg. 4)"
    },
    {
      "type": "F",
      "label": "F9",
      "text": "Words in Sch. 1 Pt. 2 omitted (6.4.2017) by virtue of The Deregulation Act 2015 and Small Business, Enterprise and Employment Act 2015 (Consequential Amendments) (Savings) Regulations 2017 (S.I. 2017/540), reg. 1, Sch. 2 para. 5(2)(d)(i) (with reg. 4)"
    },
    {
      "type": "F",
      "label": "F10",
      "text": "Words in Sch. 1 Pt. 2 inserted (6.4.2017) by The Deregulation Act 2015 and Small Business, Enterprise and Employment Act 2015 (Consequential Amendments) (Savings) Regulations 2017 (S.I. 2017/540), reg. 1, Sch. 2 para. 5(2)(d)(ii) (with reg. 4)"
    },
    {
      "type": "F",
      "label": "F11",
      "text": "Words in Sch. 1 Pt. 2 omitted (6.4.2017) by virtue of The Deregulation Act 2015 and Small Business, Enterprise and Employment Act 2015 (Consequential Amendments) (Savings) Regulations 2017 (S.I. 2017/540), reg. 1, Sch. 2 para. 5(3)(a) (with reg. 4)"
    },
    {
      "type": "F",
      "label": "F12",
      "text": "Words in Sch. 1 Pt. 2 inserted (6.4.2017) by The Deregulation Act 2015 and Small Business, Enterprise and Employment Act 2015 (Consequential Amendments) (Savings) Regulations 2017 (S.I. 2017/540), reg. 1, Sch. 2 para. 5(3)(b) (with reg. 4)"
    },
    {
      "type": "F",
      "label": "F13",
      "text": "Words in Sch. 1 substituted (1.7.2005) by The Insolvent Partnerships (Amendment) Order 2005 (S.I. 2005/1516), arts. 1(1), 6(8)"
    }
  ],
  "outstanding_effects": [],
  "provenance": {
    "source": "legislation.gov.uk",
    "source_url": "https://www.legislation.gov.uk/uksi/1994/2421/schedule/1/part/II",
    "retrieved_at": "2026-10-29T13:25:54.483589+00:00"
  },
  "licence": "Open Government Licence v3.0",
  "licence_url": "https://www.nationalarchives.gov.uk/doc/open-government-licence/version/3/",
  "attribution": "Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives."
}