Where there have been other insolvency proceedings immediately prior to the winding-up order, the official receiver may consider that the statement of affairs submitted in those proceedings gives adequate information for the purposes of the winding up.
In the proceedings mentioned below, the statements of affairs are in a very similar form to that for winding up by the court and it is likely that any new statement will be made up to the date of the commencement of those proceedings rather than the date of the winding-up order.
Such statements of affairs may exist where:
In assessing whether a new statement of affairs should be required, the official receiver should take into consideration the length of time since the previous insolvency proceedings commenced and whether or not the company continued trading during those proceedings. Generally, if there has been a short period of time since the previous insolvency proceedings and no further trading, there will be minimal if any changes to the company’s position and the official receiver need not consider requesting a new statement of affairs. If trading was continued, the official receiver may consider that a new statement of affairs is desirable.
Note: Following the implementation of the EA2002 there are now two administration regimes in existence within the Insolvency Act 1986. The statement of affairs (Form 2.9) under the original administration regime [Note 4] is now only applicable to certain categories of public-utility companies and to building societies, and to companies where a petition for an administration order was presented to the court before 15 September 2003. A wholly new administration regime for companies [Note 5] was introduced by the relevant provisions of Part 10 of the EA2002 [Note 6], and was brought in to effect from 15 September 2003 [Note 7]. Form 2.14B (statement of affairs) is applicable in cases subject to the new administration regime.
Exceptionally (see paragraph 12.15), a statement of affairs may be submitted in winding-up proceedings which includes details subject to a limited disclosure order in administrative receivership proceedings. In order to ensure that the administrative receivership proceedings are not prejudiced by his/her actions, the official receiver should obtain written notice from the administrative receiver as to whether limited disclosure continues to be required. If still required, the official receiver should make an application to the court, in accordance with Rule 4.35, for a limited disclosure order regarding the information subject to the limited disclosure order obtained in the administrative receivership under Rule 3.5. He/she should also, where a meeting of creditors is to be held, seek the direction of the court with a view to withholding that information from the meeting of creditors. The official receiver should still seek the court’s directions regarding disclosure of information to the meetings of creditors in cases where he/she has decided not to require submission of a separate statement of affairs in the winding-up proceedings (i.e. using the statement of affairs submitted in the administrative receivership).
The official receiver can issue his/her report to creditors and contributories on the basis of the statement of affairs lodged in the other proceedings, if the position of the company has not changed (see chapter 18 for further details regarding reports to creditors).
It should be borne in mind that if the previous proceedings were as a result of an administrative receivership, administration order or company voluntary arrangement, it may be necessary to include in the report a special note about preferential claims, especially if there is likely to be any distribution to that class of creditor in the winding-up.
Where a winding-up follows an administrative receivership there may be different sets of preferential creditors for the two proceedings[note 8] [note 9]. If the company was previously in administrative receivership, the relevant date for the calculation of preferential debts is the date of appointment of the administrative receiver by debenture holders[note 10]. In an administration or company voluntary arrangement, there are no preferential creditors as such although persons who would have preferential claims were the company to be wound up are given special rights in a voluntary arrangement [note 11] [Note 12] [Note 13]. Where a winding-up order was made immediately upon the discharge of an administration order, the preferential debts are calculated as at the date of the making of the administration order[Note 14] [Note 15][Note 16] [Note 17] [Note 18]. If the company had previously been subject to voluntary winding up proceedings, the preferential debts are calculated as at the date of the resolution for the winding up of the company. [Note 19] Further information about preferential claims generally is given at chapter 36.84 onwards.
A statement of affairs may not be required in every case. In general, the decision to require a statement of affairs will not be a direct part of the administration process but will be taken at the time that the Case Assessment Record (CAR) is considered i.e. at the time that the decision is taken as to whether further investigation should be undertaken.
The official receiver may decide that a statement of affairs is required due to the action or inaction of the officers of the company; in order to identify, collect, secure and protect the assets of the estate, to ensure a proper preliminary examination of the affairs of the company or generally to fulfil the official receiver’s duties. The reasons for the official receiver’s decision should be set out in the CAR.
The official receiver should consider the usefulness of obtaining a statement of affairs before this time only if the circumstances merit it e.g. if there is a dispute about the identity of the creditors, the amount or nature of the company’s debts, the company’s assets or if prosecution or disqualification proceedings are identified at an early stage. If the decision is that a statement of affairs is not required, the official receiver should use the relevant information contained in the preliminary information questionnaire (PIQC) relating to assets and liabilities when preparing his report to creditors.
Where there is no suitable existing statement of affairs and the official receiver decides that one is required, he/she will also have to decide who is to lodge it. Persons who are officers of the company are included in the persons who are required to lodge the statement of affairs. It will normally be sufficient to require a statement of affairs to be submitted by the director principally concerned in the management of the company’s affairs (form SANR)
Where there is no director or other current company officer (e.g. the secretary) on whom notice to lodge a statement of affairs can be served, the official receiver may consider serving notice on others, as provided for by section 131(3) of the Insolvency Act 1986. [Note 20]
The persons concerned are :
a) past company officers
b) persons who, in the last year before the winding up order, have taken part in the formation of the company
c) current employees and employees in the last year before the winding up order, who are in the official receiver’s opinion capable of giving the information required
d) those who are or have been in the last year before the winding up order officers of, or in the employment of, a company which is, or was in the last year, an officer of the company.
(Where a provisional liquidator was appointed, the year runs from the date of his/her appointment instead of the date of the winding-up order.)
However, the official receiver should only issue the notice to those who would, or reasonably should, have the necessary knowledge to submit a statement of affairs.
By virtue of section 1173 of the Companies Act 2006 an officer includes a director, manager or secretary of the company. This definition is incorporated into insolvency proceedings by section 251 of the Insolvency Act 1986 [Note 21] and therefore applies in relation to section 131(3) of the Insolvency Act 1986.
Section 131(6) of the Act [Note 22] also allows the official receiver to require the submission of a statement of affairs by a consultant engaged under a contract for services by the company being wound up. This provision extends the scope to possibly an accountant or auditor but only if they were engaged under a contract for services.
An auditor appointed under Part 16, Chapter 2 of the Companies Act 2006 (formerly section 384(1) of the Companies Act 1985 ) can, for the purposes of section 131 of the Act, be regarded as an officer of the company (R v Shacter  2QB 252, CAA). An auditor appointed for a limited purpose may, depending on the terms on which he was employed, fall within the term "employee" for the purposes of paragraph 12.24 above. Before considering whether an auditor, appointed, should be asked to submit a statement of affairs, regard should be had to the level of his/her involvement with the company and whether he/she would have the necessary knowledge. Such a requirement should be made of an auditor only as a last resort and must not be made without the express permission of the official receiver responsible for the case. If an auditor requests an allowance for the preparation of the statement of affairs, this should be made where the allowance is reasonable and if funds are available (see also paragraphs 12.67-12.74).
The notice to submit a statement of affairs (form SANR) and the forms and guidance notes for preparing the statement of affairs (form SAWU), may be sent to the nominated person by post or electronically (if he/she has consented to electronic delivery and provided an electronic address). If the forms are sent electronically the nominated person must be told of their right to request hard copies and how this should be done. Alternatively they can be served personally. The forms may be handed to the nominated person when he/she attends for interview, if the decision has been made at that stage that a statement of affairs is required (see paragraph 12.22) [Note 23] [Note 24].
The official receiver should only issue the notice to those persons who would, or reasonably should, have the necessary information to submit the statement of affairs. Except in the case of past company officers, form SANR should be amended to delete the paragraph relating to disqualification, which will not be applicable to the person to whom the notice is being sent. The notice will give a date by which the statement of affairs must be submitted but at the latest this should not be later than 21 days after the notice is given to the nominated persons, unless a longer period has previously been agreed. His/her acknowledgement in writing of the receipt of the notice (form SARF) and accompanying documents should be obtained in all cases.
If the official receiver considers that a director who does not attend upon him/her should lodge the statement of affairs, the necessary notice, forms and notes should be sent to him/her by post or any other valid means of delivery.
Depending on the circumstances of the non-attendance, the official receiver may wish to use recorded delivery to provide better subsequent proof of service of the documents.
Notice requiring a statement of affairs may be given at any time after the winding-up order has been made. Section 131(4) of the Act [Note 26] requires a person given such notice to submit the statement of affairs by the date stated in the notice. The date given must be such that it does not fall on a day later than that immediately following the twenty-first day after that on which notice is given to the nominated person, unless a longer period has previously been agreed. Under Rule 12A.3 [Note 27] a notice served by post is deemed to be served as set out in the Civil Procedure Rules (CPR) Part 6 . For first class post the deemed date of service is the second day after posting provided that is a business day. For fax and email delivery, documents transmitted before 4.30pm on a business day are deemed to be served on that day, otherwise service is effective on the next business day. This needs to be taken into account when setting the date for submission of the statement of affairs.
The statement of affairs must be verified by a statement of truth [Note 28] [Note 29] (see paragraph 12.6) and must be submitted to the official receiver with a copy [Note 30] (although a statement of affairs should not be rejected if a copy is not supplied). In practice the official receiver will often accept the submission of the verified copy only. Immediately after the verified statement of affairs is received, having made a copy to be retained on file, the official receiver must, in cases where the petition was presented before 6 April 2010, send the verified copy of the statement of affairs and any statements of concurrence to the court.
In cases where the petition was presented on or after 6 April 2010, the requirement to file a statement of affairs and supporting documents at court has been removed and instead they must be sent to the registrar of companies (companies house form F4.41 - www.companieshouse.gov.uk/.../formF4-41NoticeOfStatementOfAffairs.pdf). [Note 31].
The nominated person’s failure to comply with his duty to submit a statement of affairs without a reasonable excuse makes him liable to a fine and a daily default fine to be imposed by the court, on conviction for this offence [Note 32]. There is no limit on the fine which may be imposed on conviction on indictment [Note 33]. Details of the action to be taken on a nominated person’s failure to submit a statement of affairs is covered in chapter 13.
Where a statement of affairs is lodged the official receiver may require a statement of concurrence from any other person who may be required under section 131 of the Act to submit a statement of affairs (whether or not such a requirement has actually been imposed) [Note 34]. The official receiver should provide the person concerned with a copy of the statement of affairs with which he/she is being asked to concur, together with two copies of a statement of concurrence verified by a statement of truth for completion and return (form SACONC).
That person must be told to return the copy statement and the completed forms to the official receiver within a specified time limit. The official receiver must also send the verified statement(s) of concurrence to the court (for cases with petitions before 6 April 2010) or the registrar of companies (for cases with petitions after 6 April 2010) and place a copy on the file. If the person concerned does not return a copy of the statement of concurrence, a photocopy should be taken rather than going back to that person for a copy.
A person who does not agree with or accept the contents of a statement of affairs in which he/she is being asked to concur may qualify his/her statement of concurrence accordingly (form SACONC, amended as necessary) [Note 35]. This is known as a statement of non-concurrence and should be filed in court (for cases with petitions before 6 April 2010) or sent to the registrar of companies (for cases with petitions after 6 April 2010) .If there are substantial differences between the parties, it is often more sensible and straightforward to require each person to submit his/her own statement of affairs (without attempting to have either person concur with the other’s document). It may be necessary to summarise each statement of affairs in any report to creditors which may be issued after their submission.
Where the court has appointed a provisional liquidator under section 135 of the Act, notice on form SANR may still be given at any time by the official receiver. If an insolvency practitioner is appointed as provisional liquidator the official receiver should consult him/her to establish whether it would be beneficial for the official receiver to exercise his/her discretion to require the submission of a statement of affairs, although the decision as to whether to require one remains that of the official receiver.
Where an insolvency practitioner has been appointed as provisional liquidator and it is decided that a statement of affairs should be submitted, the official receiver would not usually require the company’s officers to attend upon him/her and, depending upon the circumstances of the case (e.g. the date when the petition is to be heard) and taking into account any views of the provisional liquidator, the official receiver may refrain at that stage from a vigorous pursuit of its submission.
Where such a statement of affairs is required and a winding-up order is subsequently made, the requirement to submit a statement of affairs remains and there is no need to serve any further notice.
The date to which a statement of affairs is to be made up will normally be that of the winding-up order or, if a provisional liquidator was appointed, the date of his/her appointment under section 135 of the Act. Where there have been previous insolvency proceedings (i.e. voluntary winding up, administration, administrative receivership or company voluntary arrangement), the statement will usually be made up to the date on which those proceedings effectively commenced and form SANR should be amended accordingly, although in cases where a statement of affairs was lodged in those proceedings, it might be used in the winding up (see paragraph 12.18), unless for example, the company continued to trade. It will be the responsibility of the insolvency practitioner dealing with the previous proceedings to account for the company’s dealings after that date.
The official receiver is entitled to ask all questions necessary to enable him to carry out his/her functions under the insolvency legislation and a director or the bankrupt has a statutory duty to answer. The ruling of the European Court of Human Rights in Saunders v United Kingdom  BCC 872 stated that the use made by the prosecution of transcripts of evidence given to Companies Act inspectors under compulsory powers constituted an infringement of Saunder’s rights to a fair trial under Article 6(1) of the European Convention of Human Rights (ECHR).
The position relating to the admission of statements has been clarified by the Youth Justice and Criminal Evidence Act 1999, which introduced amendments to the Insolvency Act 1986 to address this issue, as detailed below.
Section 433 of the Insolvency Act 1986 (admissibility in evidence of statements of affairs, etc.) has been amended to include the following subsection at s433(2)– 433(3) [Note 36] :
"In criminal proceedings in which any person is charged with an offence to which this subsection applies-
The above applies to any offence other than -
It should be noted that Section 20 of the Company Directors Disqualification Act 1986, section 434 of the Companies Act 1985 and section 105 of the Financial Services Act 1986 have been similarly amended.
Where the official receiver is considering disqualification proceedings, he/she may wish to consider whether a statement of affairs would serve a useful purpose.