• Schedule Schedule

    • SCHEDULE 13 MODIFICATIONS TO THE INSOLVENCY REGULATIONS FOR LIMITED LIABILITY PARTNERSHIPS

      Provisions Modifications
      Section 1(3)(c)
      (Administration)
      For "Company or its Directors" substitute "Limited Liability Partnership"
      Section 5(3)(a)
      (General restrictions)
      For "resolution for voluntary winding up" substitute "determination to wind up voluntarily"
      Section 8(1)(b)
      (Administration application)
      Omit
      Section 29(2)
      (Power to appoint)
      Omit
      Section 32(2)
      (Notice of intention to appoint)
      Omit "or a record of the decision of the Directors (where the Directors intend to make the appointment)"
      Section 33(4)
      (Notice of appointment)
      For "Directors of the Company" substitute "Limited Liability Partnership"
      Section 44(2)
      (Moratorium on Insolvency Proceedings)
      For "resolution may be passed for the winding up of" substitute "determination to wind up voluntarily may be made by"
      Section 57(1)(d)
      (Administrator's statement of proposals)
      Omit
      Section 66(1)(d)
      (Contents of the administrator's revised proposals)
      Omit
      Section 76(4)
      (Effect of Deed of Company Arrangement on creditors)
      For "Section 117 (The members of a company) of the Companies Regulations" substitute "Section 3 (Members) of the Limited Liability Partnership Regulations 2015"
      Section 81(1)
      (Transfer of shares)
      For "shares in" substitute "interests in the property of", for "shares" substitute "interests"
      Section 94(6)(b)
      (Deed progress reports)
      In Section 94(6)(b) the reference to Section 470 (Auditor's general right to information) shall be read in respect of a Limited Liability Partnership as such provision is amended pursuant to the Limited Liability Partnerships Rules 2015
      Section 95(5)
      (General powers)
      For Section 95(5) substitute
      "(5) The administrator of a Limited Liability Partnership has power to prevent any person from taking part in the management of the business of the Limited Liability Partnership and to appoint any person to be a manager of that business."
      Section 122(5)(b)
      (Moving to creditors' voluntary liquidation)
      For "resolution for voluntary winding-up" substitute "determination to wind-up voluntarily"
      Section 122(7)(b)
      (Moving to creditors' voluntary liquidation)
      For "passing of the resolution for voluntary winding-up" substitute "determination to wind-up voluntarily"
      Section 122(7)(e)
      (Moving to creditors' voluntary liquidation)
      For "passing of the resolution for voluntary winding-up" substitute "determination to wind-up voluntarily"
      Section 128(2)(d)
      (Resignation of administrator)
      Omit
      Section 134(2)(d)
      (Administrator ceasing to be licensed)
      Omit
      Section 137(2)(c), (7) and (8)
      (Supplying vacancy in office of administrator)
      Omit
      Section 137(9)
      (Supplying vacancy in office of administrator)
      For "(5) or (7) substitute "or (5)"
      Section 141(1)(a)
      (Substitution of administrator appointed by Company or Directors: creditors' meeting)
      Omit "or Directors"
      Section 147(5)
      (Joint and concurrent administrators)
      Omit
      Section 150
      (Majority decision of Directors)
      Omit
      Section 174(1)
      (Circumstances in which a Company may be wound up voluntarily)
      For Section 174(1) substitute the following:
      "(1) A Limited Liability Partnership may be wound-up voluntarily when it determines that it is to be wound-up voluntarily"
      Section 174(2)
      (Circumstances in which a Company may be wound up voluntarily)
      For "passes a resolution for voluntary winding-up" substitute "determines that it is to be wound-up voluntarily", for "passing of such resolution" substitute "making of the determination" and for "resolution" where it appears for the third time substitute "determination"
      Section 175(1)
      (Declaration of solvency)
      For "the directors (or, in the case of a Company having more than two Directors, the majority of them) may at a meeting of the board of Directors make a declaration in a form prescribed by the Board in rules made by the Board)" substitute "the members of the Limited Liability Partnership may make a declaration."
      Section 175(2)
      (Declaration of solvency)
      For the existing subsection, substitute the following:
      "(2) Such a declaration must be made within the five (5) weeks immediately preceding the date when the Limited Liability Partnership determined that it be wound-up voluntarily or on that date but before the making of the determination."
      Section 175(3)
      (Declaration of solvency)
      For "a Director" substitute "the members"
      Section 175(4)
      (Declaration of solvency)
      For "in pursuance of a resolution passed" substitute "voluntarily"
      Section 178
      (Appointment of liquidator)
      Omit "at a general meeting"
      Section 179
      (Directors' powers)
      Substitute the following:
      "On the appointment of a liquidator the powers of the members of the Limited Liability Partnership shall cease except to the extent that a meeting of the members of the Limited Liability Partnership summoned for the purpose or the liquidator sanctions their continuance."
      Section 180
      (Vacancy in office of liquidator)
      For "the Company at a general meeting" substitute "a meeting of the members of the Limited Liability Partnership called for the purpose" and "a general meeting" substitute "a meeting of the members of the Limited Liability Partnership"
      Section 182(1)
      (Final meeting prior to dissolution)
      For "a general meeting" substitute "a meeting of the members"
      Section 183(1)
      (Effect of Company's insolvency)
      For "Directors" substitute "members"
      Section 184(a)
      (Conversion to creditors' voluntary winding-up)
      For "Directors" substitute "members"
      Section 184(b)
      (Conversion to creditors' voluntary winding-up)
      For "general meeting" substitute "meeting of the members"
      Section 186(1)
      (Meetings of members and creditors)
      Substitute the following:
      "(1) The Limited Liability Partnership shall cause a meeting of its creditors to be summoned for a day not later than the 14th day after the day on which the Limited Liability Partnership determines that it be wound-up voluntarily."
      Section 186(2) and (3)
      (Meeting of members and creditors)
      For "Directors" substitute "members"
      Section 187(1)
      (Appointment of liquidator)
      For "The creditors and the Company at their respective meetings mentioned in Section 186 (Meetings of members and creditors)" substitute "The creditors at their meeting mentioned in Section 186 (Meetings of members and creditors) and the Limited Liability Partnership"
      Section 188
      (Directors' powers)
      Substitute the following:
      "On the appointment of a liquidator the powers of the members of the Limited Liability Partnership shall cease, except so far as the Liquidation Committee (or if there is no such Liquidation Committee, the creditors) sanction their continuance."
      Section 191(1)
      (Final meeting prior to dissolution)
      For "a general meeting" substitute "a meeting of the members"
      Section 192(1)
      (Notice of resolution to wind up)
      For "passed a resolution for voluntary winding-up" substitute "determined that it shall be wound up voluntarily", for "passing of the resolution" substitute "determination", for "resolution" substitute "determination"
      Section 193
      (Commencement of winding-up)
      Substitute the following new Section — "A voluntary winding- up is deemed to commence at the time when the Limited Liability Partnership determines that it be wound up voluntarily"
      Section 196
      (Avoidance of share transfers after winding-up resolution)
      For "shares" substitute "the interests of any member in the property of the Limited Liability Partnership"
      Section 198A
      (Acceptance of shares, etc. as consideration for sale of company property)
      For the existing Section substitute the following:
      "198A. Acceptance of shares, etc. as consideration for sale of Limited Liability Partnership property
      (1) This Section applies, in the case of a Limited Liability Partnership proposed to be, or being, wound up voluntarily, where the whole or part of the Limited Liability Partnership's business or property is proposed to be transferred or sold to another company whether or not it is a Company within the meaning of the Companies Regulations 2015 ("the transferee company") or to a Limited Liability Partnership ("the transferee limited liability partnership").
      (2) With the requisite sanction, the liquidator of the Limited Liability Partnership being, or proposed to be, wound up ("the transferor limited liability partnership") may receive, in compensation or part compensation for the transfer or sale, shares, policies or other like interests in the transferee company or the transferee limited liability partnership for distribution among the members of the transferor limited liability partnership.
      (3) The sanction required under subsection (2) is —
      (a) in the case of a members' voluntary winding up, that of a determination of the Limited Liability Partnership at a meeting of the members of the Limited Liability Partnership conferring either a general authority on the liquidator or an authority in respect of any particular arrangement, and
      (b) in the case of a creditor's voluntary winding up, that of either the Court or the Liquidation Committee.
      (4) Alternatively to subsection (2), the liquidator may (with the sanction) enter into any other arrangement whereby the members of the transferor limited liability partnership may, in lieu of receiving cash, shares, policies or other like interests (or in addition thereto), participate in the profits, or receive any other benefit from the transferee company or the transferee limited liability partnership.
       
      (5) A sale or arrangement in pursuance of this Section is binding on members of the transferor limited liability partnership.
      (6) A determination by the Limited Liability Partnership is not invalid for the purposes of this Section by reason that it is made before or concurrently with a determination by the Limited Liability Partnership that it be wound up voluntarily or for appointing liquidators; but, if an order is made within a year for winding up the Limited Liability Partnership by the Court, the determination by the Limited Liability Partnership is not valid unless sanctioned by the Court.
      (7) If a determination of the Limited Liability Partnership has provided the sanction requisite for the liquidator under this Section, a member of the transferor limited liability partnership who did not vote in favour of providing the sanction required for the liquidator under this Section may express his dissent from it in writing addressed to the liquidator and left at the registered office of the Limited Liability Partnership within 7 days after the date on which that sanction was given, and require the liquidator either to abstain from carrying the arrangement so sanctioned into effect or to purchase his interest at a price to be determined by agreement or arbitration under this Section.
      (8) If the liquidator elects to purchase the member's interest, the purchase money must be paid before the Limited Liability Partnership is dissolved and be raised by the liquidator in such manner as may be determined by the Limited Liability Partnership."
      Section 199(a)
      (Circumstances in which a Company may be wound up by the Court)
      For "has by Special Resolution resolved" substitute "has determined"
      Section 199(c)
      (Circumstances in which a Company may be wound up by the Court)
      Omit "or"
      Section 199(e) and (f)
      (Circumstances in which a Company may be wound up by the Court)
      Add the following new paragraphs:
      "(e) the Limited Liability Partnership does not commence its business within a year from its incorporation or suspends its business for a whole year; or
      (f) the number of members is reduced below two."
      Section 202(2)
      (Application for winding-up)
      Omit "either"
      Section 202(2)(a)
      (Application for winding-up)
      Omit
      Section 208(1)
      (Commencement of winding-up)
      For "a resolution has been passed" substitute "a determination has been made" and for "the passing of the resolution" substitute "that determination"
      Section 209(2)(b)
      (Consequences of winding-up order)
      For "any transfer of shares" substitute "any transfer by a member of the Limited Liability Partnership of his interest in the property of the Limited Liability Partnership"
      Section 215(6)(a)
      (Property of the Company)
      For "resolution" substitute "determination"
      Section 217(8)
      (Powers of liquidator)
      For "a resolution passed" substitute "determination made"
      Section 220(1)(a)
      (Settling list of contributories, debts and calls)
      Omit "with power to rectify the register of members in all cases where rectification is required"
      Section 221
      (Liability to contribute of past and present members)
      Substitute the following —
      "When a Limited Liability Partnership is wound up every present and past member of the Limited Liability Partnership who has agreed with the other members or with the Limited Liability Partnership that he will, in circumstances which have arisen, be liable to contribute to the assets of the Limited Liability Partnership in the event that the Limited Liability Partnership goes into liquidation is liable, to the extent that he has so agreed, to contribute to its assets to any amount sufficient for payment of its debts and liabilities, and the expenses of winding up, and for the adjustment of the rights of the contributories among themselves. However, a past member shall only be liable if the obligation arising from such agreement survived his ceasing to be a member of the Limited Liability Partnership."
      Section 222
      (Limited Company formerly unlimited) and 223 (Unlimited Company formerly limited)
      Omit.
      Section 233
      (Statement of Company's affairs by Directors)
      For "Director" substitute "member" and "Directors" substitute "members"
      Section 242(4)
      (Meetings to ascertain wishes of creditors or contributories)
      Insert a new subsection (4) as follows —
      "(4) Meetings of members of a Limited Liability Partnership shall be convened and held subject to Part 13 (Limited Liability Partnership Meetings) of Schedule 6 (Meetings and Correspondence)".
      Section 244(1)
      (Fraud in anticipation of winding-up or insolvent administration)
      For "passes a resolution for voluntary winding-up" substitute "makes a determination that it be wound-up voluntarily".
      Section 245(1)
      (Transactions in fraud of creditors)
      For "passes a resolution for voluntary winding-up" substitute "makes a determination that it be wound-up voluntarily".
      After Section 252
      (Wrongful trading)
      Insert the following new Section 252A as follows —
      "252A Adjustment of withdrawals
      (1) This Section has effect in relation to a person who is or has been a member of a Limited Liability Partnership where, in the course of winding up of that Limited Liability Partnership, it appears that subsection (2) of this Section applies in relation to that person.
      (2) This subsection applies in relation to a person if —
      (a) within the period of two years ending with the commencement of the winding up, he was a member of the Limited Liability Partnership who withdrew property of the Limited Liability Partnership, whether in the form of a share of profits, salary, repayment of or payment of interest on a loan to the Limited Liability Partnership or any other withdrawal of property, and
      (b) it is proved by the liquidator to the satisfaction of the Court that at the time of the withdrawal he knew or had reasonable ground for believing that the Limited Liability Partnership —
      (i) was at the time of the withdrawal unable to pay its debts within the meaning of Section 200 (Definition of inability to pay debts), or
      (ii) would become so unable to pay its debts after the assets of the Limited Liability Partnership had been depleted by that withdrawal taken together with all other withdrawals (if any) made by any members contemporaneously with that withdrawal or in contemplation when that withdrawal was made.
      (3) Where this Section has effect in relation to any person the Court, on the application of the liquidator, may declare that that person is to be liable to make such contribution (if any) to the Limited Liability Partnership's assets as the Court thinks proper.
      (4) The Court shall not make a declaration in relation to any person the amount of which exceeds the aggregate of the amounts or values of all the withdrawals referred to in subsection (2) made by that person within the period of two years referred to in that subsection.
      (5) The Court shall not make a declaration under this Section with respect to any person unless that person knew or ought to have concluded that after each withdrawal referred to in subsection (2) there was no reasonable prospect that the Limited Liability Partnership would avoid going into insolvent liquidation.
      (6) For the purposes of subsection (5) the facts which a member ought to know or ascertain and the conclusions which he ought to reach are those which would be known, ascertained, or reached by a reasonably diligent person having both:
      (a) the general knowledge, skill and experience that may reasonably be expected of a person carrying out the same functions as are carried out by that member in relation to the Limited Liability Partnership, and
      (b) the general knowledge, skill and experience that that member has.
      (7) For the purposes of this section a Limited Liability Partnership goes into insolvent liquidation if it goes into liquidation at a time when its assets are insufficient for the payment of its debts and other liabilities and the expenses of the winding up.
      (8) In this section "member" includes a shadow member.
      (9) This section is without prejudice to Section 252."
      Section 253
      (Proceedings under Sections 251 and 252)
      Add after "Section 252 (Wrongful trading)" the following — "or Section 252A (Adjustment of withdrawals)"
      Section 255(2)(a)
      (Duty to co-operate with Office-holder)
      Omit "secretary of"
      Section 255(2)(d)
      (Duty to co-operate with Office-holder)
      Omit "or secretary of"
      Section 256
      (Inquiry into Company's dealings)
      Omit "or secretary"
      Section 298
      (Defined Terms) (definition of "Connected Person")
      Replace the existing definition of Connected Person with the following —
      ""Connected Person" means a person is connected with a Company (including a Limited Liability Partnership) if —
      (a) he is a Director or shadow director of the Company or an Associate of such a Director or shadow director (including a member or shadow member of a Limited Liability Partnership or an Associate of such a member or shadow member):
      (b) he is an Associate of the Company or of the Limited Liability Partnership;
      (c) he is an employee of the Company or of the Limited Liability Partnership; or
      (d) he is a trustee of a trust and the Company or the Limited Liability Partnership has an interest in the trust property or vice versa."
      Section 298
      (Defined Terms) (definition of "designated member")
      Insert a new definition of "designated member" as follows —
      ""designated member" has the same meaning as it has in the Limited Liability Partnership Regulations 2015."
      Section 298
      (Defined Terms) (definition of "Limited Liability Partnership")
      Replace the existing definition of Limited Liability Partnership with the following —
      ""Limited Liability Partnership" means a limited liability partnership registered under the Limited Liability Partnerships Regulations 2015."
      Section 298
      (Defined Terms) (definition of "Limited Liability Partnerships Regulations")
      Replace the existing definition of Limited Liability Partnership with the following —
      ""Limited Liability Partnerships Regulations 2015" means the Limited Liability Partnerships Regulations 2015, issued by the Board."
      Section 298
      (Defined Terms) (definition of "member")
      Replace the existing definition of member with the following —
      ""member" means a member of a Limited Liability Partnership."
      Section 298
      (Defined Terms) (definition of "shadow member")
      Insert a new definition of "shadow member" as follows —
      ""shadow member", in relation to a Limited Liability Partnership, means a person in accordance with whose directions or instructions the members of the Limited Liability Partnership are accustomed to act (but so that a person is not deemed a shadow member of a Limited Liability Partnership by reason only that members of the Limited Liability Partnership act on advice given by him in a professional capacity)."
      Section 299(2)
      (Meaning of "liability", "into liquidation" and "into insolvent liquidation" and "in administration", "enters administration" and "enters insolvent administration")
      For "passes a resolution for voluntary winding-up" substitute "makes a determination that it be wound up voluntarily" and for "passing such a resolution" substitute "making such a determination."
      Section 300(3A)
      (Meaning of "Associate")
      Insert a new subsection (3A) as follows —
      "(3A) A member of a Limited Liability Partnership is an Associate of that Limited Liability Partnership and of every other member of that Limited Liability Partnership and of the spouse (including former spouse) or relative of every other member of that Limited Liability Partnership."
      Section 300(10)
      (Meaning of "Associate")
      Substitute for subsection (10) the following—
      "(10) in this Section "Company" includes any body corporate (whether incorporated in the Abu Dhabi Global Market or elsewhere); and references to Directors and other officers of a Company and to voting power at any general meeting of a Company have effect with any necessary modifications."
      Schedule 2, paragraph (19)
      (Powers of the Administrator)
      For paragraph (19) substitute the following —
      "(19) Power to enforce any rights the Limited Liability Partnership has against the members under the terms of the Limited Liability Partnership Agreement."
      Schedule 3, paragraph (18)
      (Powers of the Administrative Receiver)
      For paragraph (18) substitute the following —
      "(19) Power to enforce any rights the Limited Liability Partnership has against the members under the terms of the Limited Liability Partnership Agreement."
      Schedule 6, Part 9
      (Contributories' Voting Rights and Majorities)
      For "general meeting" subsitiute "meeting of the members" and for "resolution is passed" substitute "determination made"
      Schedule 6, Part 13
      (Meetings and Correspondence)
      Insert a new Part 13 as follows —
      "PART 13

      LIMITED LIABILITY PARTNERSHIP MEETINGS
      48. Limited Liability Partnership meetings (general)

      Unless these regulations provide otherwise, a meeting of the members of the Limited Liability Partnership, must be called and conducted, and records of the meeting must be kept in accordance with the Limited Liability Partnership Agreement and the laws of the Abu Dhabi Global Market, including any applicable provisions in or made under the Limited Liability Partnerships Regulations 2015. The quorum required for a meeting of the members of the Limited Liability Partnership shall be any quorum required by the Limited Liability Partnership Agreement for meetings of members of the Limited Liability Partnership and if no requirement for a quorum has been agreed upon the quorum shall be 2 members."