New insolvency rules for companies from 6 April 2019
Margaret Linn, manager in our Business Recovery & Insolvency team, provides an overview of the changes that will affect creditors in corporate insolvency procedures.
This year, the 6 April does not only mark the start of the new tax year. It also marks the date of the implementation of new rules that govern corporate insolvency procedures in Scotland. It is the biggest shake up in over 30 years.
The changes are intended to make processes fit for the world we now live in by embracing information technology advances that allow simpler, quicker and more eco-friendly communication between the office holder and creditors.
How will this affect you as a creditor?
- Electronic communications with creditors
- While this has already been available in some processes, in liquidations office holders will be able to upload information onto hubs that creditors can access, and information can be sent by e-mail. If you prefer, hard copies can still be issued on request.
- Removing the statutory obligation to hold physical creditors meeting
- Annual meetings are being abolished. If requested, meetings can be called but these will be virtual meetings, removing the necessity for creditors to take travelling time out of their busy days.
- Opting out of further communications
- If you don’t like getting those lengthy liquidators reports, you will be able to opt out of receiving communications, but you will still automatically receive any notifications regarding proposed dividends, change of office holder and any notices required to be given by Court order.
- There is to be provision for office holders to pay small dividends without requiring a formal claim
Office holders will ensure that creditors receive all the details they require to receive or access information on the insolvency process. Remember the office holders are there to work for the benefit of creditors, so you should not hesitate to contact them if you have any queries.
If you have any questions or concerns about these changes, please get in touch with Margaret Linn.