Amendments to measures introduced in the Corporate Insolvency and Governance Act (2020)

Some of the measures the government introduced in June 2020 to help protect businesses from insolvency during the corona-virus pandemic have been further extended under The Corporate Insolvency and Governance Act 2020 (Corona-virus) (Extension of the Relevant Period) Regulations 2021.

The Regulations came into effect on 26 March 2021 and extend existing amendments that were due to expire either on 31 March or 30 April 2021.  They may be summarised as follows:

The suspension of liability for wrongful trading continues until 30 June 2021 for directors who continue to trade a company during the pandemic with the uncertainty that it may not avoid future insolvency.

The prohibition of termination clauses and the modifications to the new moratorium procedure, which were both introduced in the Corporate Insolvency and Governance Act (2020), are extended until 30 June 2021.

The use of statutory demands and winding-up petitions will continue to be restricted until 30 June 2021.