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  Frequently Asked Questions about the Enterprise Act

> General < > Company < > Individual < > Crown Preference < > Financial Regime <

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  1. What are the main insolvency provisions in the Enterprise Act?
  2. When did the insolvency provisions of the Enterprise Act 2002 come into force?
  3. Where can I find a copy of the Enterprise Act 2002?
  4. How can I find out more about the changes?

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1. What are the main insolvency provisions in the Enterprise Act?

Company (Click here for more detail)

  • Streamline the procedure of administration to make it more efficient and accessible in order to facilitate the rescue of viable companies, and, if this is not reasonably practicable, one of the other two objectives provided for.
  • Restrict the ability to appoint an administrative receiver to lenders who hold pre-existing floating charges, or who are financiers involved in certain capital market and other transactions where they must be able to appoint an administrative receiver if the market is to operate effectively.
  • Introduce powers to extend certain insolvency proceedings, with modifications, to foreign companies, Industrial and Provident Societies and Friendly Societies.

Individual (Click here for more detail)

  • Reduce the number of restrictions that are automatically imposed on undischarged bankrupts and provide for the automatic discharge of nearly all bankrupts after a maximum of 12 months.
  • Introduce Bankruptcy Restrictions Orders (BROs) to protect the public and the commercial community from bankrupts whose conduct before and during bankruptcy has been found to be culpable.
  • Introduce Income Payments Agreements (IPA) as an administrative alternative to court-based Income Payments Orders (IPO). IPAs will carry the same conditions as IPOs and both will be able to run for a period of up to three years.
  • Enable the Official Receiver (OR) to act as nominee and supervisor of new fast-track IVAs begun after  bankruptcy order has been made.
  • Require the Official Receiver to investigate why a bankrupt failed only where he thinks that this is necessary.
  • Limit to three years the period in which a trustee may deal with a bankrupt's interest in the sole or principal home of the bankrupt, the bankrupt's spouse or a former spouse before that interest revert to the bankrupt.

Abolition of Crown Preference (Click here for more detail)

  • Remove the Crown's preferential rights in all insolvencies and make provision to ensure unsecured creditors are major beneficiaries.

Modernisation of the Financial Regime of The Insolvency Service (Click here for more detail)

  • Reform the financial regime of The Insolvency Service, making it simpler, fairer to creditors and more transparent. Changes to the Insolvency Services Account will maximise the investment return to estates.

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2. When did the insolvency provisions of the Enterprise Act 2002 come into force?

The Act's provisions on corporate insolvency and the abolition of Crown preference came into force on 15 September 2003. The individual insolvency provisions and those reforming the Insolvency Service's financial regime came into force on 1 April 2004.

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3. Where can I find a copy of the Enterprise Act 2002?

An electronic copy of the Enterprise Act is available on the Stationery Office web-site. Click here to access the Act.

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4. How can I find out more about the changes?

You can contact The Insolvency Service Policy Unit via email.

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