Company Voluntary Arrangements (CVAs) - Ineligibility to apply for a CVA with a moratorium
Schedule A1 - Insolvency Act 1986 - Paragraph 4K - Definition of "Person" for CVA ineligibility purposes
Paragraph 4 of Schedule A1 to the Act is concerned with what type of businesses are ineligible to apply for a CVA with a moratorium. The provisions of this ineligibility law requires definitions of certain words. Paragraph 4K of Schedue A1 defines the word "person" in this respect.
As Company Voluntary Arrangements apply to Companies with the emphasis on the word Company then, at first consideration, it might appear strange that the law uses the word "person" rather than "company".
All is revealed however when we read Paragraph 4K - we find that it refers to "partnerships" and "unincorporated associations" - and both of such entities are generally speaking entitled to propose CVAs - unless ineligible for one of the reasons set out in Paragraphs 4A to 4J of Schedule A1 to The Insolvency Act 1986.
The actual wording of Paragraph 4K of Schedule A1 to The Insolvency Act 1986 is reproduced below in bold.
Insolvency Act 1986 - Schedule A1 - Paragraph 4K - "Person"
For the purposes of paragraphs 4A to 4J, a reference to a person includes a reference to a partnership or another unincorporated group of persons.
The definition of the word "person" when considering what type of organisations are debarred from applying for a CVA with a moratorium is found at Paragraph 4K of Schedule A1 to The Insolvency Act 1986. For a plain English free explanation of what this might mean to your organisation please contact us & we will be happy to help.