|Blog Article|||||By Knights PLC||23 July 2020|
At Simplyhealth, we work with a variety of businesses, from small and medium-sized enterprises, such as dental and veterinary practices, to large corporate partners. We understand the importance of keeping up to date with correct and relevant information and the value of guidance, support and advice. In collaboration with our legal partner, Knights PLC, we've put together a suite of business resources to help you through this challenging time.
What are the changes to Insolvency Legislation as a result of COVID-19?
The Wrongful Trading provisions are contained within sections 214 and 246ZB of the Insolvency Act 1986. The rules apply once a director concludes, or ought to have concluded, that there was no reasonable prospect of the company avoiding liquidation or administration. There is no requirement of dishonestly or fraudulent intent.
The proposed regime provides a Restructuring Moratorium that will be available to companies in financial distress, and that will need to undergo a financial rescue or restructuring process.
Continuing Obligations and Considerations
The Business Secretary has reiterated that "all of the other checks and balances that help directors fulfil their duties properly will remain in force".
Irrespective of the proposed regimes, it is imperative that companies and its directors continue to abide by other regulations that are unaffected by the government's proposals including those on fraudulent trading, transactions defrauding creditors and misfeasance.
This material may contain links to other websites operated by third parties. It is the responsibility of third parties to ensure such material and websites comply with all relevant laws and regulations. To the maximum extent permissible by law Simplyhealth disclaims all responsibility for such websites.