Government gives businesses much-needed breathing space with extension of insolvency measures

CORPORATE INSOLVENCY AND GOVERNANCE ACT CHANGES EXTENDED

Changes to the Corporate Insolvency and Governance Act were due to expire on 30 September 2020. These measures from the Corporate Insolvency and Governance Act have been extended to relieve pressure on businesses dealing with coronavirus. These are summarised below;
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• Statutory Demands  - will continue to be restricted until 31 December to protect companies from aggressive creditors. In addition on 9 December 2020 the government announced it intends this further until 31 March 2021.
• Winding-up petitions - will continue to be restricted until 31 December to protect companies from aggressive creditors. In addition on 9 December 2020 the government announced it intends this further until 31 March 2021.
• Wrongful trading - On 25 November 2020 the government announced it intends to reinstate the temporary removal of the threat of personal liability for wrongful trading from directors until 30 April 2021.
• AGMs - flexibility to hold meetings virtually continues until 30 March 2021
• Termination clauses - will continue to be prohibited until 30 March 2021, stopping suppliers from ceasing their supply or asking for additional payments while a company is going through a rescue process.
• Moratorium procedure - temporary moratorium rules will also be extended to 30 March 2021, easing access the process.