Partner Jeremy Laws provides a further update on the Corporate Insolvency and Governance Act 2020.
We have previously written about the implementation of the Corporate Insolvency and Governance Act 2020 and the various Regulations introduced after it dealing with the temporary measures created for companies and tenants as a result of COVID-19.
Following our last update, which can be found here, there has been a further extension to the temporary measures relating to winding-up a company. Previously due to end on 31 December 2020, once the Corporate Insolvency and Governance Act 2020 (Coronavirus) (Extension of the Relevant Period) (No.2) Regulations 2020 (“No.2 Regulations”) are implemented on 31 December 2020, the measures will continue to apply until 31 March 2021.
The result of the extension means that it will remain impossible to:
- Use a statutory demand as evidence that a company is unable to pay its debts; and
- Pursue winding-up proceedings if the debtor company has been financially impacted by COVID-19.
In addition to the No.2 Regulations, The Business Tenancies (Protection from Forfeiture: Relevant Period) (Coronavirus) (England) (No. 3) Regulations 2020 coming into force on 30 December 2020 will further extend the current protection provided to businesses who face eviction as a result of the pandemic.
This will result in businesses being provided with additional security, knowing that until 31 March 2021, repossessing business premises is prohibited, allowing landlord and tenant to decide how to proceed in terms of unpaid rent.