Section 257MK | Ceasing to meet trading requirement: administration or receivership ^F1

(1)The social enterprise is not regarded as ceasing to meet the trading requirement merely because of anything done in consequence of the social enterprise or any of its subsidiaries being in administration or receivership, but this is subject to subsections (2) and (3).^F1

(2)Subsection (1) applies only if—^F1

(a)the entry into administration or receivership, and^F1

(b)everything done as a result of the company concerned being in administration or receivership,^F1

is for genuine commercial reasons, and is not part of any arrangements the main purpose or one of the main purposes of which is the avoidance of tax.

(3)The social enterprise ceases to meet the trading requirement if before the end of the shorter applicable period—^F1

(a)a resolution is passed, or an order is made, for the winding-up of the social enterprise or any of its subsidiaries (or, in the case of a winding-up otherwise than under the Insolvency Act 1986 or the Insolvency (Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19)), any other act is done for the like purpose), or^F1

(b)the company or any of its subsidiaries is dissolved without winding-up,^F1

but this is subject to subsection (4).

(4)Subsection (3) does not apply if the winding-up or dissolution is for genuine commercial reasons, and is not part of any arrangements the main purpose or one of the main purposes of which is the avoidance of tax.^F1