Corporate Insolvency and Governance Bill 2020 given royal assent
Farhana Young, 10th July, 2020
Following its first reading in Parliament in May 2020, the Corporate Insolvency and Governance Bill 2020 which contains measures to both temporarily suspend and permanently amend insolvency and company law, has now received royal assent (as at 25 June 2020). The bill is now the Corporate Insolvency and Governance Act 2020 (‘the Act’).
The content of the Act is predominantly the same as when the bill was first introduced into parliament (further detailed in our blogs, 'An overview of the Corporate Insolvency and Governance Bill 2020' and 'Commercial landlords banned from aggressive rent collection'). However, significantly the “relevant period” applicable to the temporary measures originally drafted to expire on the later of 30 June 2020 or one month after the bill’s enaction, has been extended to 30 September 2020. This is applicable to the following measures:
Suspension of wrongful trading;
Ban on statutory demands generally and winding-up petitions for Covid-19 related debts; and
Company filing deadlines and annual general meetings / general meetings.
The Act incudes provision for the Secretary of State to extend the measures in 6-month increments after 30 September 2020, if they consider it reasonable to do so to mitigate the effect of coronavirus. It is therefore likely that these protective measures will remain in place until the Government takes the view that coronavirus is no longer significantly impacting the economy.
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