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The proposed measures are not yet law, so some details are scant. The government has announced these temporary changes will come into effect from the date of announcement, but detailed legislation is unlikely to be available before the end of April.
Key changes the government announced are:
It is envisaged directors’ decisions to keep on trading, as well as decisions to take on new obligations, over the next 6 months would not result in a breach of duties if:
Key features of the proposal are:
The Government has stressed “these changes will not mean that directors are free to disregard the consequences of their actions for the next six months. Other protections in the Companies Act, such as those addressing serious breaches of the duty to act in good faith and punishing those who dishonestly incur debts, will remain in place”.
The proposals are subject to change between now and when Parliament is able to enact them, and businesses should take care prior to the enactment of any legislation.
If you have any queries, please contact your usual advisor. If you are a creditor concerned about the ability of debtors to repay their debts, or are a business needing assistance with managing creditor obligations, Baker Tilly Staples Rodway have a team of experts who can assist.
Please note, the information contained in this article is correct at the time of publication, but under ever evolving conditions, information may change.
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