Measures put in place to protect businesses from insolvency will
be extended to continue giving them much-needed breathing space
during the coronavirus (COVID-19) pandemic, the government announced
today (24 September).
A raft of changes to protect businesses from insolvency were
introduced in the Corporate Insolvency and Governance Act and
were due to expire on 30 September 2020. The temporary measures
include:
- companies and other qualifying bodies with obligations to
hold AGMs will
continue to have the flexibility to hold these meetings virtually
until 30 December 2020. This means that shareholders can continue
to examine company papers and vote on important issues remotely
- statutory demands and winding-up petitions will continue to
be restricted until 31 December 2020 to protect companies from
aggressive creditor enforcement action as a result of coronavirus
related debts
- termination clauses are still prohibited, stopping suppliers
from ceasing their supply or asking for additional payments while
a company is going through a rescue process. However, small
suppliers will remain exempted from the obligation to supply
until 30 March 2021 so that they can to protect their business if
necessary
- 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. Measures will also ease access for companies subject to a
winding up petition. The temporary moratorium rules will also be
extended to 30 March 2021
Business Minister said:
It is vital that we continue to deliver certainty to businesses
through this challenging time, which is why we are now
extending these important and necessary measures to protect
companies from insolvency.
Through this measure, we want to ensure businesses are able to
not only come through this testing period, but also to plan,
adapt and build back better.
- businesses will be protected from the threat of eviction
until the end of year following an extension to the commercial
eviction ban announced on 16 September 2020
- this extension will protect businesses that are struggling to
pay their rent due to the impact of COVID-19 from being evicted and help the
thousands of people working in these sectors feel more secure
about their jobs
- the government is clear that where businesses can pay their
rent, they should do so, as this support is aimed at those
struggling the most during the pandemic. This is set out in the
Code of Practice
which was published in June.
