Last updated 1 July 2020
The Government announced on 28 March 2020 that changes would be made to the insolvency laws to give companies affected by the COVID-19 crisis breathing space and allow them to keep trading whilst exploring options for rescue.
These changes were introduced in The Corporate Insolvency and Governance Act, which received Royal Assent on 25 June 2020.
The changes include:
- a new moratorium to give companies breathing space from their creditors while they seek a rescue;
- introduction of a new restructuring plan for companies in financial distress;
- enabling the insolvency regime to flex to meet the demands of the crisis;
- temporarily removing the threat of personal liability for wrongful trading from directors who try to keep their companies afloat through the COVID-19 emergency;
- temporarily prohibiting creditors from filing statutory demands and winding-up petitions for COVID-19 related debts; and
- temporary easements to the rules around Annual General Meetings (AGMs).
Secondary legislation also extends the Companies House filing deadlines for accounts, confirmation statements and certain other documents.
Some of these announcements build on changes to the insolvency laws originally announced in August 2018 following consultation.
More information can be found in a collection of Corporate Insolvency and Governance Bill 2020 factsheets on GOV.UK