Legislation passed in Parliament to ease pressure on struggling businesses
28th May 2020
UPDATED 29 JUNE 2020 - The Corporate Insolvency and Governance Bill received royal assent on 25 June and is now an Act.
Many businesses are experiencing the most challenging trading conditions in a generation. Whilst the support measures introduced by the government will help a large number of firms, these exceptional circumstances will place some businesses under impossible financial pressure. The stress of running a business in extreme financial difficulty will be severe for all directors and owners. However, changes to insolvency rules could help to ease the strain.
The Corporate Insolvency and Governance Bill was introduced on 20 May in Parliament and received royal assent on 25 June to become Corporate Insolvency and Governance Act 2020. The Act features a number of measures to support businesses facing unique challenges resulting from the impact of coronavirus.
introduces new corporate restructuring tools to the insolvency regulations to give companies the time they need to maximise their chance of survival
temporarily suspend parts of insolvency law to support directors during this difficult time
amends Company Law to introduce temporary relaxations on filing requirements, including extensions to deadlines for confirmation statements and accounts, and more flexibility around when and how Annual General Meetings (AGMs) are held.
companies will also receive an automatic extension for:
- confirmation statements
- registrations of charges (mortgage)
- event-driven filings, such as a change to your company’s directors or people with significant control
The government has also introduced a new moratorium to give companies breathing space from their creditors whilst they seek a rescue. The moratorium must be monitored by a licensed insolvency practitioner.
If you require advice or assistance surrounding insolvency matters, we have close links to a number of insolvency advisors and will be able to put you in contact with the right person. For more information, contact us at email@example.com or speak with your regular HB&O advisor.
There are a number of other measures intended to support businesses during these challenging times. Visit our dedicated Coronavirus Hub for more details.