Coronavirus Insolvency and Governance Act 2020 – provisions extended
On 29 September 2020 the Corporate Insolvency and Governance Act 2020 (Coronavirus) (Extension of the Relevant Period) Regulations 2020 (“The Regulations”) came into force across the UK, extending many of the temporary provisions put in place by The Corporate Insolvency & Governance Act 2020. Whilst some provisions, such as the prevention of creditors issuing winding up petitions, unless the debt has not arisen as a result of Covid 19, will continue until 31 December 2020 (if not longer), there has not been an extension to the suspension of the wrongful trading provisions.
Suspension of wrongful trading NOT extended
This suspension was terminated on 30 September 2020, meaning that company directors may now be found personally liable for company debts, where they continue to trade whilst in the knowledge the company will not be able to avoid liquidation.
Directors advised to take professional advice
Given the risk of further lockdowns and the growing number of restrictions being imposed by the Government, directors of companies in sectors affected by Covid 19 such as hospitality and leisure must carefully consider whether they can continue to trade without falling foul of the wrongful trading legislation and should seek the appropriate professional advice.
The content of this page is a summary of the law in force at the present time and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.