Extension of measures introduced in the Corporate Insolvency and Governance Act (2020)

The measures the government put into place in June 2020 to protect businesses from insolvency due to the coronavirus pandemic have been extended by means of The Corporate Insolvency and Governance Act 2020 (Coronavirus) (Extension of the Relevant Period) Regulations 2020 which come into force on 29 September 2020.

The regulations, which were originally set to expire on 30 September 2020, extend some of temporary amendments are as follows:

· Companies and other qualifying bodies with obligations to hold Annual General Meetings will continue to have the flexibility to hold these meetings virtually until 30 December 2020. 

· Statutory demands and winding-up petitions will continue to be restricted until 31 December 2020 to protect companies from aggressive creditor action. 

· Termination clauses are still prohibited meaning that suppliers are unable to terminate their supply or demand additional payments whilst a company is going through a rescue process.  Small suppliers will, however, remain exempted 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 it has been subject to an insolvency procedure in the previous 12 months.

Of note, the suspension of provisions relating to Wrongful Trading have not been extended and will come to an end on 30 September 2020.