Section 175

In a winding up the company’s preferential debts ... shall be paid in priority to all other debts after the payment of— any liabilities to which section 174A applies, and expenses of the winding up. Ordinary preferential debts rank equally among themselves ... and shall be paid in full, unless the assets are insufficient to meet them, in which case they abate in equal proportions. Secondary preferential debts rank equally among themselves after the ordinary preferential debts and shall be paid in full, unless the assets are insufficient to meet them, in which case they abate in equal proportions. Preferential debts— . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . so far as the assets of the company available for payment of general creditors are insufficient to meet them, have priority over the claims of holders of debentures secured by, or holders of, any floating charge created by the company, and shall be paid accordingly out of any property comprised in or subject to that charge. In this section “preferential debts”, “ordinary preferential debts” and “secondary preferential debts” each has the meaning given in section 386 in Part 12.

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Source: legislation.gov.uk · retrieved 2026-09-04