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Law protecting companies from creditors gets Royal Assent

26 June 2020

The Corporate Insolvency & Governance Act aims to help companies survive the coronavirus fall-out. Photo © Andrianocz | Dreamstime.com

The Corporate Insolvency & Governance Act 2020, which received Royal Assent on 25 June, came into force on 26 June. 

The Act introduces a moratorium to give companies breathing space from their creditors while they seek a rescue.

It introduces a new restructuring plan sanctioned by a court that will bind creditors to the plan, even if they don't agree with it.

A restructuring plan does not take effect until a copy of the court order has been delivered to Companies House. It will then be registered against the company.

Directors will still need to meet their filing obligations with Companies House and late filing penalties will be applied if accounts are filed late.

However, the Act gives companies and other types of businesses registered at Companies House more time to file accounts. Filing deadlines will be updated automatically by Companies House for eligible businesses. You do not need to apply for an extension.

Companies with a moratorium will have a 'Monitor' appointed to oversee the moratorium.

Click here for guidance on how to apply for a moretorium.

There is an overview of the Act here, although it was written before it passed into law and refers to the Act as a Bill.

For reporting, Companies House says the following: 

Company type Company has not had an extension or shortened their accounting reference period
Public limited companies (PLCs)* Filing deadline extended from 6 to 9 months
Private company Filing deadline extended from 9 to 12 months
LLP Filing deadline extended from 9 to 12 months
Overseas companies who are required to prepare and disclose accounts under parent law Filing deadline extended from 3 to 6 months
SEs (Societas Europaeas)* Filing deadline extended from 6 to 9 months

*For PLCs and SEs whose original accounts filing deadline fell on or after 30 June 2020 before it was extended by the Corporate Insolvency & Governance Act 2020, this extension will apply and supersede the extension under the Act.

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