On 26 June the long-awaited Corporate Insolvency and Governance Act 2020 came into force and introduced emergency measures to provide protection to directors of companies which continue to trade notwithstanding the threat of insolvency, and to prevent, where possible, companies entering into insolvency due to COVID-19.
- Wrongful trading provisions in the Insolvency Act 1986 will be suspended retrospectively between 1 March 2020 and 30 September. During this time if a director is otherwise found liable for wrongful trading, when considering the contribution a directors is required to make to a company’s debts, the court is entitled to assume the director was not responsible for worsening the financial position of the company.
- The Act in…
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