Companies Act 2014 section 676

Provisions as to arrangement binding creditors

Section 676 sets out the rules governing when an arrangement between a company being wound up and its creditors becomes legally binding, including the approval thresholds required and the right of appeal.

• An arrangement between a company about to be, or in the course of being, wound up and its creditors is binding on the company if sanctioned by special resolution, and binding on creditors if agreed to by three-quarters in number and value of the creditors.
• Any creditor or contributory may appeal the arrangement to the court within 21 days of its completion, and the court may amend, vary or confirm it as it sees fit.
• This section applies to both voluntary and court-ordered windings-up, broadening the scope of the earlier legislation it replaced.
• These provisions operate alongside the separate scheme of arrangement rules under Chapter 1 of Part 9, which also allow compromises or arrangements with a company to become binding.