Insolvency measures supporting businesses during the pandemic and
helping them recover, are set to be extended till the end of June
2021.
The measures were introduced in the Corporate Insolvency and
Governance Act in March 2020, including protecting businesses
from aggressive creditor enforcement and removing personal
liability on company directors, and have been previously extended on a
number of occasions.
The measures being extended till the end of June 2021:
- Statutory demands and winding-up petitions will continue to
be restricted to protect companies from creditor enforcement
action due to debts related to coronavirus (COVID-19).
- Small suppliers will not have to continue to supply a
business in insolvency. However, larger suppliers will not be
able to cease their supply or ask for additional payments while a
company is going through a rescue process.
- Entry into a moratorium will remain relaxed and a company
will be able to enter a moratorium if they have been subject to
an insolvency procedure in the previous 12 months. These measures
will be extended until 30 September 2021
Minister for Corporate Responsibility, , said:
We’re extending these important measures to give businesses the
extra breathing space they need as we cautiously reopen the
economy and look to build back better from the pandemic.
With the threat of aggressive creditor action and insolvency
eased, companies will be able to focus all their efforts on
their recovery.
Dr Roger Barker, Director of Policy & Corporate Governance at
the Institute of Directors said:
During the pandemic, it has been essential to provide company
directors with the means by which they can sustain inherently
viable businesses. An important component has been the
temporary suspension of the potential liability faced by
directors if they continue to operate a company that is facing
financial difficulties. During the exceptional circumstances of
the pandemic, this has been an appropriate step for government
to take in order to ensure that viable businesses survive and
are in a position to contribute to a meaningful economic
recovery.
Notes to editors
- The temporary measures were introduced in the Corporate Insolvency and
Governance Act 2020
- The temporary measures apply to England, Wales &
Scotland. Insolvency in Northern Ireland is devolved and NI
Ministers are considering a corresponding extension of their
legislation.
