#

Ease of Doing Business in

United Kingdom

United Kingdom Download Profile (1759.2KB, pdf)
Region OECD high income
Income Category High income
Population 65,138,232
GNI Per Capita (US$) 43,340
City covered London

190

1

DB 2017 Rank

1

100

DB 2017 DTF (% points)

  • local_library
  • group
Topics DB 2017 Rank DB 2016 Rank info_outline Change in Rank DB 2017 DTF (% points) info_outline DB 2016 DTF (% points) info_outline Change in DTF (% points) info_outline
Overall 7 6 down
1
82.74 82.73 down
0.01
Starting a Business 16 13 down
3
94.58 94.57 up
0.01
Dealing with Construction Permits 17 16 down
1
80.34 80.29 up
0.05
Getting Electricity 17 15 down
2
89.12 89.12
-
Registering Property 47 46 down
1
74.11 74.50 down
0.39
Getting Credit 20 19 down
1
75.00 75.00
-
Protecting Minority Investors 6 5 down
1
78.33 78.33
-
Paying Taxes 10 11 up
1
90.74 90.37 up
0.37
Trading across Borders 28 28
-
93.76 93.76
-
Enforcing Contracts 31 30 down
1
69.36 69.36
-
Resolving Insolvency 13 13
-
82.04 82.04
-

DB 2017 Rank:

13

DB 2016 Rank:

13

Change in Rank:

0

DB 2017 DTF (% points):

82.04

DB 2016 DTF (% points):

82.04

Change in DTF (% points):

0.00

Indicator United Kingdom OECD high income
Recovery rate (cents on the dollar) info_outline 88.6 73.0
Time (years) info_outline 1 1.7
Cost (% of estate) info_outline 6 9.1
Outcome (0 as piecemeal sale and 1 as going concern) info_outline 1 ..
Strength of insolvency framework index (0-16) info_outline 11 12.1
  • Indicator Explanation Answer
    Recovery rate (cents on the dollar) 88.6
    Proceeding BizBank will most likely apply for the administration procedure. The directors could file for administration or else BizBank could put the company into administration since it has a floating charge over substantially the whole of the company's property. Administration would be the most likely procedure to be chosen since it is a rescue procedure, designed to save all or part of the business. It would be more likely to preserve value for the creditors than a liquidation, where fire sales can depress the value of the company's property. An administrator's first objective is to rescue the company as a going concern, if possible. If this is not possible, his objective is to achieve a better result for the company's creditors as a whole than would be likely if the company were wound up, or failing that he must realize property to make a distribution to secured or preferential creditors. reorganization
    Outcome The administrator will be focused on achieving the best outcome for the creditors as a whole and in this case, this would be achieved by the sale of the business as a going concern. The administration moratorium provides protection for the company from various creditor enforcement actions: - enforcement of security- repossession of hire-purchase goods- forfeiture by landlords- commencement of legal proceedings against the company. This moratorium gives the company a breathing space in which to implement a solution to its financial difficulties. The administrator takes over from the directors in the management of the company and has broad powers to carry on the business of the company so that it can continue to operate as a going concern. He can enter into new contracts on behalf of the company and pay the expenses of the administration in priority to all other creditors (apart from fixed charge holders) so that the business can continue to operate. The hotel is likely to be sold as a going concern. The administrator may continue to trade the business from administration while seeking a purchaser. going concern
    Time (in years) The administration procedure will take approximately one year. BizBank, the company's directors (probably with BizBank's approval), or (less likely in practice) the company acting on a majority resolution of its shareholders could apply for the company's administration. If BizBank puts the company into administration, it would give notice of intention to appoint administrators to any prior ranking qualifying floating charge holder (N.B. this can be dispensed with if BizBank is certain there are no such charge holders). 2 business days later, BizBank would file a notice of appointment of administrator (and various short accompanying documents) at court. The administrator's appointment takes effect from the moment of this filing. If the directors/company were to appoint the administrator, they would give notice of intention to appoint to BizBank. BizBank could either consent to the director/company's choice of administrator (probable since in practice the directors would probably consult BizBank on the choice of administrator) or appoint its own choice of administrator following the procedure above. Upon receiving Bizbank's consent, or after 5 business days if BizBank is silent and takes no action, the directors/company would file a notice of appointment and accompanying documents at court. The administrator's appointment takes effect from the moment of this filing. The administrator is obliged to advertise his appointment, to send notice of his appointment to all creditors of whom he is aware and to give his name and the fact of the administration on all business documents issued by the company or administrator and on any company website. The administrator would take control of the management of the company and continue to run the hotel whilst seeking a buyer for the business. The administrator's duty on any sale is to achieve fair market value at the time of the sale, although he is not obliged to wait to sell in case more favorable market conditions materialize. The administrator is not obliged to seek the creditors' consent before concluding a sale but he would likely discuss any potential sale with BizBank as the secured creditor who stands to recover its loan from the sale proceeds. Within the first 8 weeks, the administrator must send a statement of his proposals to all creditors and shareholders detailing, amongst other things, (a) how he envisages the purpose of administration will/has been achieved (in this case, sale of the business) and how the administration will be brought to an end; (b) a statement of the company's affairs; and (c) the basis upon which his remuneration will be fixed. The administrator must hold a creditors' meeting within the first 10 weeks to approve his proposals. This creditors' meeting is not required if the company has insufficient property to make a distribution to unsecured creditors (which may be the case here), although in this situation creditors with at least 10% of the total debts can order the administrator to summon a creditors' meeting if they wish. The administrator would also investigate the affairs of the company, in particular (a) directors' conduct to establish whether there are any grounds for a potential disqualification action; and (b) recent transactions to determine whether he should apply to court to challenge any as transactions at an undervalue, preferences or transactions defrauding creditors. The administrator would pay out BizBank after receiving the sale proceeds and deducting the expenses of the administration. 1.0
    Cost (% of estate) Major expenses include remuneration of the administrator (around 3%), auctioneer's fees (around 1% and possible premium) and attorneys’ fees (around 2%). 6.0
    Answer Score
    Strength of insolvency framework index (0-16) 11.0
    Commencement of proceedings index (0-3) 3.0
    What procedures are available to a DEBTOR when commencing insolvency proceedings? (a) Debtor may file for both liquidation and reorganization 1.0
    Does the insolvency framework allow a CREDITOR to file for insolvency of the debtor? (a) Yes, a creditor may file for both liquidation and reorganization 1.0
    What basis for commencement of the insolvency proceedings is allowed under the insolvency framework? (c) Both (a) and (b) options are available, but only one of them needs to be complied with 1.0
    Management of debtor's assets index (0-6) 5.0
    Does the insolvency framework allow the continuation of contracts supplying essential goods and services to the debtor? No 0.0
    Does the insolvency framework allow the rejection by the debtor of overly burdensome contracts? Yes 1.0
    Does the insolvency framework allow avoidance of preferential transactions? Yes 1.0
    Does the insolvency framework allow avoidance of undervalued transactions? Yes 1.0
    Does the insolvency framework provide for the possibility of the debtor obtaining credit after commencement of insolvency proceedings? Yes 1.0
    Does the insolvency framework assign priority to post-commencement credit? (b) Yes over ordinary unsecured creditors but not over secured creditors 1.0
    Reorganization proceedings index (0-3) 1.0
    Which creditors vote on the proposed reorganization plan? (b) Only creditors whose rights are affected by the proposed plan 1.0
    Does the insolvency framework require that dissenting creditors in reorganization receive at least as much as what they would obtain in a liquidation? No 0.0
    Are the creditors devided into classes for the purposes of voting on the reorganization plan, does each class vote separately and are creditors in the same class treated equally? No 0.0
    Creditor participation index (0-4) 2.0
    Does the insolvency framework require approval by the creditors for selection or appointment of the insolvency representative? Yes 1.0
    Does the insolvency framework require approval by the creditors for sale of substantial assets of the debtor? No 0.0
    Does the insolvency framework provide that a creditor has the right to request information from the insolvency representative? No 0.0
    Does the insolvency framework provide that a creditor has the right to object to decisions accepting or rejecting creditors' claims? Yes 1.0

Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice”.