Partner Mark Williams looks at the Corporate Insolvency and Governance Act 2020.
On 25 June 2020 the Corporate Insolvency and Governance Act 2020 (Act) received Royal Assent. It provides for some important changes to provisions contained in the Insolvency Act 1986 and the Companies Act (CA) 2006.
A key objective of the Act is to provide businesses with the flexibility and breathing space they need to continue trading and comply with their legal obligations in the difficult conditions arising from the COVID-19 pandemic. To achieve this purpose, the Act has temporarily relaxed certain company filing obligations and requirements relating to Annual General Meetings (AGMs). These measures apply retrospectively from 26 March 2020.
Below, these measures are considered in more detail.
Temporary measures have been introduced to allow companies and other “qualifying bodies” greater flexibility as to the manner in which they hold general meetings that take place between 26 March and 30 September 2020 (Relevant Period). The aim being to ensure that such meetings can be held in a manner consistent with the need to prevent the spread of COVID-19.
Any such meetings held during the Relevant Period:
- need not be held at any particular place;
- may be held, and any votes may be permitted to be cast, by electronic means or any other means; and
- may be held without those participating in the meeting being together at the same place.
In addition, members of the company will not have the right to attend a meeting in person or participate in the meeting other than by voting.
All of the above will apply notwithstanding any provision of the Company’s Articles of Association (Articles) to the contrary. The Act also allows the Secretary of State to extend the Relevant Period if required, but the temporary measures only apply for as long as they are needed to enable companies to hold meetings in a manner consistent with the need to prevent the spread of COVID-19.
The Act also permits companies to extend the period within which it must hold an AGM that would otherwise need to be held during the Relevant Period. Companies can now postpone the meeting up until the end of the Relevant Period without penalty and notwithstanding anything to the contrary in their Articles. As above, the Secretary of State has the power to extend this measure if required.
Power to extend filing periods
The Act also temporarily empowers the Secretary of State to introduce regulations which extend the deadlines for certain company filings, including the periods specified in the CA 2006. On 27 June 2020, the Secretary of State brought into force The Companies etc. (Filing Requirements) (Temporary Modifications) Regulations 2020 to modify the CA 2006 to include the extension of:
- the accounts and reports filing deadline by 3 months to 12 months for private companies;
- the 14 day deadline for the annual confirmation statement after the end of a company’s confirmation period to 42 days;
- the 14 day deadlines for submitting certain notices of relevant events after they occur to 42 days. Examples of relevant events are a change of director or person with significant control over the company; and
- the 21 day deadline for registering a charge to 31 days.
Introduction of the Act may ease the burden on companies and other qualifying bodies in terms of complying with their legal obligations in relation to holding meetings and filing documents at Companies House. Companies that held meetings in breach of their constitutions and/or the CA 2006 during the Relevant Period will also be saved from any potential liability due to the Act’s retrospective effect.