The Charitable Incorporated Organisations (Insolvency and Dissolution) (Amendment) (No. 2) Regulations 2020

Amendment of the Charitable Incorporated Organisations (Insolvency and Dissolution) Regulations 2012

5.—(1) Paragraph 1 of Schedule 1 (application of the Insolvency Act 1986 to CIOs) is amended as follows.

(2) Sub-paragraph (2)(a) is amended as follows—

(a) before sub-paragraph (i) insert—

“(ai) sections A5, A15, A27 and A49 to A51;”;

(b) after sub-paragraph (iii) insert—

“(iiia) paragraphs 3 to 18 and 20 to 22 of Schedule ZA1;”;

(c) omit sub-paragraph (iv).

(3) In sub-paragraph (5), in substituted section 122(1) omit paragraph (d).

(4) In the table in sub-paragraph (7)—

(a) in the entry relating to section 4A (approval of arrangement), for the second column substitute “Omit subsections (5) and (5A).”;

(b) at the appropriate place insert—

“Section A3 (Obtaining moratorium by filing documents)	Omit subsection (1)(b).
Section A7 (Beginning of moratorium)	Omit subsection (1)(c).
Section A9 (End of moratorium)	In subsection (3) omit “section A15 (extension by court in course of other proceedings).”.
Section A16 (Entry into insolvency procedure etc)	Omit subsections (1)(a) and (2).
Section A17 (Obligation to notify change in end of moratorium)	In subsection (1) omit entry 8 of the table.
Section A20 (Restrictions on insolvency proceedings etc)
Subsection (1)	Omit paragraph (b) and for paragraph (c)  substitute: “(c) a resolution for voluntary winding up under section 84(1) may be passed only if the resolution is recommended by the charity trustees,”.
Subsection (3)	For subsection (3) substitute: “(3) For these purposes, “excepted petition” means a petition presented by the Attorney General or the Charity Commission under section 113 of the Charities Act 2011.”.
Section A21 (Restrictions on enforcement and legal proceedings)	Omit subsection (1)(b).
Section A22 (Floating charges)	In subsection (7) for “as defined by section A27”, in each place it occurs, substitute “as defined by section A31”.
Section A24 (Duty of directors to notify monitor of insolvency proceedings etc)	For subsection (2) substitute: “(2) The charity trustees must notify the monitor if, during a moratorium for the CIO, they recommend a resolution for voluntary winding up be passed under section 84(1).”.
Section A25 (Restrictions on obtaining credit)	In subsection (2)(b) omit “(in Scotland, hired)”.
Section A26 (Restrictions on grant of security)	Omit subsection (6).
Section A31 (Disposal of charged property free from charge)
Subsection (11)	Omit “(as defined by section A27)”.
New subsection (12)	After subsection (11) insert: “(12) In this section— “collateral security” has the same meaning as in the Financial Markets and Insolvency (Settlement Finality) Regulations 1999(1); “financial collateral arrangement” has the same meaning as in the Financial Collateral Arrangements (No.2) Regulations 2003(2); “market charge” has the same meaning as in Part 7 of the Companies Act 1989(3); “system-charge” has the meaning given by the Financial Markets and Insolvency Regulations 1996(4).”.
Section A32 (Disposal of hire-purchase property)	Omit subsection (7).
Section A42 (Challenge to monitor’s actions)	In subsection (2)(a) for “creditor, director or member” substitute “creditor or director”.
Section A43 (Challenges to monitor remuneration in insolvency proceedings)	In subsection (2)(c) omit “(or, in Scotland, the expenses)”.
Section A44 (Challenges to charity trustees’ actions)	In subsection (1) omit “or member”, and “or members” in both places.
Section A48 (Prosecution of delinquent officers of CIO)
Subsection (3)	Omit paragraphs (b) and (c).
Subsection (4)	At end insert “as if the CIO were a company.”.
Subsection (8)	Omit paragraph (b).
Subsection (10)	Omit “, the Lord Advocate”.
Section A52 (Void provisions in floating charge documents)	In subsection (4) for “as defined by section A27”, in each place it occurs, substitute “as defined by section A31”.
Section A54 (Interpretation)
Subsection (1)	In the definition of “unable to pay its debts” omit paragraph (b).
Subsection (3)	Omit subsection (3).
Section A55 (Regulations)	In subsection (2) omit “, unless they are made by the Scottish Ministers”.”;

(c) in the entry relating to section 432(4) (offences by bodies corporate), for the second column substitute “Omit the words “A27(1)” and “51, 53, 54, 62, 64, 66,””;

(d) at the appropriate place insert—

“SCHEDULE ZA1 (Eligible CIOs)
Paragraph 1	Omit the references to paragraphs 3 to 18.
Paragraph 2	For sub-paragraph (4) substitute: “(4) In sub-paragraph (3)(g) “relevant petition” means a petition presented by the Attorney General or the Charity Commission under section 113 of the Charities Act 2011.”.”;

(e) omit the entries relating to Schedule A1 (moratorium where directors propose voluntary arrangements);

(f) in the entry relating to Schedule 10 (punishment of offences), in the second column, after “table,” insert “omit the entries relating to sections A27 and A48, and”.

(1)

S.I. 1999/2979, amended by S.I. 2010/2993.

(2)

S.I. 2003/3226.

(3)

1989 c. 40, section 173(1), amended by S.I. 1991/880, regulation 9, S.I. 2017/1064, regulation 3(1), 19(a)(i), (ii), 19(b).

(4)

S.I. 1996/1469.