The Government publishes the Corporate Governance and Insolvency Bill

21 May 2020

The Government has published the Corporate Governance and Insolvency Bill 2019-21, which has had its first reading in Parliament. The text of the Bill can be found here, with explanatory notes which can be found here.

As has been previously reported in the DMH Stallard coronavirus hub (which can be found here), a key objective of the Bill is to provide businesses with the flexibility and breathing space needed to continue trading and comply with their legal obligations during the COVID-19 pandemic.

The Bill introduces a number of measures to provide companies and other qualifying bodies with temporary relaxations of certain company filing obligations and requirements relating to Annual General Meetings and other meetings, including:

•    Giving companies more flexibility for conducting general meetings up to 30 September 2020, including the power to hold meetings and vote by electronic means, whether or not permitted by the company's constitution.

•    Giving companies the flexibility to postpone AGMs due to be held between 26 March and 30 September 2020 up to the latter date, with the power to provide for further temporary extensions.

•    Granting a temporary extension to the period within which a public company is required to file its annual accounts and reports with Companies House.

•    Enabling regulations to be made to extend the deadlines for certain company filings, including company accounts and annual confirmation statements, and for registering charges.

The Bill also introduces a number of measures to temporarily suspend parts of insolvency law, including with effect from 1 March to 30 June 2020 (or, if later, one month after the measure comes into force) suspending a company director’s potential liability for an action by a liquidator or an administrator for wrongful trading. Under the measures proposed, the courts will be unable to declare a company's directors liable to contribute to the company’s assets as a result of losses caused to creditors during this period and subsequent to the point at which insolvency proceedings could not be avoided.

Most of the Bill's provisions, including those relating to company meetings, company filing obligations and the suspension of wrongful trading liability, will come into force on the day after the Bill it is enacted.

MPs will next consider all stages of the Bill on 3 June 2020.

If you require legal advice on any of these issues, you should get in touch with your usual contact in the DMH Stallard Corporate team, or Nick Williams at nick.williams@dmhstallard.com.
 

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