Partner David Murray, in Blandy & Blandy Solicitors’ Dispute Resolution department and Insolvency & Restructuring team, provides an update on the measures within the Corporate Insolvency and Governance Act 2020 that have been extended as part of the Government’s support package for businesses and their owners.
Following on from my blog article in May this year, which focused on the proposed changes to the UK’s insolvency and restructuring regime that led to the introduction of the Corporate Insolvency and Governance Act 2020, new Regulations were laid before Parliament on 24 September 2020.
The Corporate Insolvency and Governance Act 2020 (Coronavirus) (Extension of the Relevant Period) Regulations 2020 (‘Regulations’) will come into force on 29 September 2020.
In summary, the amendments to the earlier Act are:
- Companies and other qualifying bodies with the obligation to hold Annual General Meetings (AGMs) will continue to be permitted to hold these virtually until 30 December 2020.
- Statutory demands and winding-up petitions will continue to be restricted until 31 December 2020.
- Termination clauses remain prohibited and small suppliers will continue to be exempt from the obligation to supply until 30 March 2021.
- The modifications to the new moratorium procedure, which relax the entry requirements to it, will also be extended until 30 March 2021. A company may enter into a moratorium if they have been subject to an insolvency procedure in the previous 12 months.
It is important to note that provisions relating to the suspension of liability for wrongful trading have not been extended under the new Regulations so will end on 30 September 2020.
This article is intended for the use of clients and other interested parties. The information contained in it is believed to be correct at the date of publication, but it is necessarily of a brief and general nature and should not be relied upon as a substitute for specific professional advice.