S The Preferential Payments in Bankruptcy Amendment Act 1897 (61 Vict. c.19) was an

Act of Parliament Acts of Parliament, sometimes referred to as primary legislation, are texts of law passed by the Legislature, legislative body of a jurisdiction (often a parliament or council). In most countries with a parliamentary system of government, acts of ...

of the

United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the continental mainland. It comprises England, Scotland, Wales and North ...

, affecting

UK insolvency law United Kingdom insolvency law regulates companies in the United Kingdom which are unable to repay their debts. While UK bankruptcy law concerns the rules for natural persons, the term insolvency is generally used for companies formed under the ...

. It amended the category of " preferential payments" for rates, taxes and wages, to take priority over a

floating charge A floating charge is a security interest over a fund of changing assets of a company or other legal person. Unlike a fixed charge, which is created over ascertained and definite property, a floating charge is created over property of an ambulator ...

in an insolvent company's assets. The Act was passed in broad response to the decision of the

House of Lords The House of Lords, also known as the House of Peers, is the Bicameralism, upper house of the Parliament of the United Kingdom. Membership is by Life peer, appointment, Hereditary peer, heredity or Lords Spiritual, official function. Like the ...

in . at paragraph 132, per Lord Walker: "''Saloman v Saloman & Co Ltd'' was decided by this House on 16 November 1896. WIth remarkable promptness Parliament responded by enacting sections 2 and 3 of the Preference Payments in Bankrtupcy Amendment Act 1897". Section 1 of the Preferential Payments in Bankruptcy Act 1888 first introduced the concept. It was amended by section 2 of the Preferential Payments in Bankruptcy Amendment Act 1897. The provisions were re-enacted in the

Companies (Consolidation) Act 1908 The Companies (Consolidation) Act 1908 was a United Kingdom Act of Parliament, which regulated UK company law. Its descendant is the Companies Act 2006. Cases decided under this Act *''Re Parkes Garage (Swadlincote) Ltd'' 929 Year 929 ( CMXX ...

, the

Companies Act 1929 The Companies Act 1929 (19 & 20 Geo.5 c.23) was an Act of the Parliament of the United Kingdom, which regulated UK company law. Its descendant is the Companies Act 2006. Provisions Forms made under the 1929 Act introduced the term "Companies Cou ...

and the

Companies Act 1948 The Companies Act 1948 (11 & 12 Geo.6 c.38) was an Act of the Parliament of the United Kingdom, which regulated UK company law. Its descendant is the Companies Act 2006. Cases decided under this Act *''Bushell v Faith'' 970AC 1099 *''Scottish ...

. Its provisions were largely ineffective as a floating charge would invariably crystallise into a fixed charge prior to enforcement. It was not until the

Insolvency Act 1986 The Insolvency Act 1986c 45 is an Act of the Parliament of the United Kingdom that provides the legal platform for all matters relating to personal and corporate insolvency in the UK. History The Insolvency Act 1986 followed the publication and ...

that the definition of floating charge was expanded to include any charge which was created as a fixed charge (i.e. irrespective of subsequent crystallisation).

Notes

{{UK legislation Insolvency law of the United Kingdom United Kingdom company law United Kingdom Acts of Parliament 1897 1890s economic history

See also

Notes