New insolvency legislation has been introduced to protect businesses that are struggling to cope with the economic impact of the coronavirus pandemic.
The Corporate Insolvency and Governance Bill is designed to protect ‘otherwise viable’ companies from collapse during the pandemic. It introduces a variety of temporary measures, including the suspension of winding up petitions and statutory demands from creditors, when companies are unable to pay debts due to the coronavirus.
Wrongful trading provisions are also suspended under the new rules meaning that directors can continue trading without having to worry about incurring personal liability.
The move comes after industry experts called for a short-term relaxation of insolvency legislation to help battling businesses weather the crisis.
Tom Fox, Licensed Insolvency Practitioner at Umbrella Insolvency said: “This is the biggest shift in insolvency legislation in a generation. Whilst the enhanced protections for directors and companies will surely be welcome, many ‘viable’ companies will struggle to survive on an extended period of life support while the virus spreads.”
The new rules also lift regulatory requirements on the timing of annual general meetings (AGMs) and allow extensions to deadlines for submitting information to Companies House.
The temporary easing of filing requirements and AGMs means that deadline extensions will be available on company confirmation statements, accounts, registrations of charges (mortgage) and event-drive filings, such as changes to company directors or people with significant control.
If you know that your company will not be able to meet its filing deadline you can apply for a three month extension. Any applications citing issues around coronavirus will be automatically granted.
For more information about government support during the coronavirus pandemic or to learn more about company insolvency, speak to a member of the Umbrella Insolvency team today. Call: 0800 611 8888.