Covid-19 - Insolvency Archives - Grunberg & Co

New Corporate Insolvency and Governance Bill to extend accounting deadlines

admin — Fri, 22 May 2020 14:54:58 +0000

The new Corporate Insolvency and Governance Bill will help maximise your business’ chance of survival throughout the coronavirus pandemic, it has been suggested.
The remarks come after the Government introduced the new laws to Parliament on Wednesday 20 May.
Under the proposed legislation, the bill will introduce temporary easements on filing requirements and Annual General Meetings (AGMs) and new corporate restructuring tools to the insolvency regime, and temporarily suspend parts of insolvency law to support directors in financial distress.
This includes giving companies more flexibility around important filing requirements by extending deadlines for confirmation statements, accounts, registration of charges and “event-driven filings”, such as a change to your company’s directors or people with significant control (PSC) register.
However, these changes have not yet come into force, meaning business owners should continue to comply with corporate reporting rules until told otherwise. If you are struggling to pay tax or meet key accounting deadlines as a result of the Covid-19 pandemic, businesses do have the option to extend their filing deadline by up to three months.
In the meantime, a number of financial support schemes are also available, including the Self-Employment Income Support Scheme (SEISS), the Bounce Back Loans scheme, the Coronavirus Business Interruption Loan Scheme (CBILS), and the extended Coronavirus Job Retention Scheme (CJRS), among others.
Commenting on the proposed changes, a Companies House spokesperson said: “The Bill was introduced on Wednesday 20 May and will now make its way through Parliament. Many of the measures in the Bill will need secondary legislation before they come into force, and this will be introduced in due course.
“Nothing will change until that legislation is introduced.”
For support meeting your reporting deadlines or accessing corporate finance, please get in touch with our expert team today.

The post New Corporate Insolvency and Governance Bill to extend accounting deadlines appeared first on Grunberg & Co.

One-third of SMEs ‘may never re-open’ after Covid-19, study reveals

admin — Wed, 20 May 2020 14:41:48 +0000

One-third of small businesses believe they will never reopen as a result of Covid-19 disruption, according to the latest research.
The finding forms part of the Federation of Small Businesses’ (FSB) new membership survey – a poll of more than 5,000 small firms in the UK.
According to the research, four in 10 (41 per cent) members were forced to close their doors following strict lockdown restrictions.
But over a third (35 per cent) are “not sure” if they will ever reopen again.
The study points to financial distress as the major cause of doubt. Around a quarter (28 per cent) of those surveyed say they have failed to make, or faced severe difficulties in making, rent or mortgage repayments as a result of Covid-19 disruption.
A further 25 per cent, meanwhile, say cash flow issues have forced the cancellation of major growth or development plans, while a similar proportion (21 per cent) report reducing or cancelling international expansion.
However, seven in 10 small firms say the Coronavirus Job Retention Scheme (CJRS) has “aided the survival” of their organisation. Still, more than a third (37 per cent) are considering or have already made redundancies in response to the changing business environment.
Commenting on the figures, FSB National Chairman Mike Cherry said the impact of the coronavirus pandemic has been felt “right across the small business community”, but Government support will help thousands of business owners survive.
“Policymakers now need to realise that the economy will not go from zero to a hundred overnight once we’re into the recovery phase. The crucial support that’s on offer needs to be kept under review, and adapted to reflect the new normal as we chart a course back to economic recovery.”
He added: “We’re hearing from business owners who are falling through the cracks and taking their stories straight to the top of government. Policymakers need to be in listening mode and prepared to help the most vulnerable over the challenging months ahead. No one should be left behind.”

The post One-third of SMEs ‘may never re-open’ after Covid-19, study reveals appeared first on Grunberg & Co.

Suspension of director liability for wrongful trading

admin — Tue, 31 Mar 2020 11:58:44 +0000

The Government has announced important changes to UK insolvency law that suspends director liability for wrongful trading.
Seeking to provide reassurance to business directors in light of the ongoing COVID-19 pandemic, the Government has retrospectively suspended restrictions around wrongful trading from the 1 March 2020 for three months.
Under English law, where a company continues to trade, even in the face of unavoidable insolvency, the company’s directors can be found personally liable for the losses suffered to creditors as a result, potentially leading to a court-ordered contribution to the assets of the insolvent company.
By suspending the rules, directors of struggling business who continue to operate, in the full knowledge that they face the prospect of insolvency, will not be penalised for doing what they can to keep their business operational.
Business Secretary Alok Sharma announced the changes and said they would offer a ‘breathing space’ for companies undergoing a rescue or restructure process to help them avoid insolvency.
On top of this suspension, the Government will also introduce new emergency legislation that will:

Create new restricting ‘tools’, including a moratorium, for companies giving them a holiday from creditors enforcing their debts for a period of time whilst they seek a rescue or restructure.
Introduce a new restructuring plan, that binds creditors to that plan;
Allow companies to buy essential supplies while attempting a rescue or restructure.

The Government hopes that by taking these measures they can reduce the number of contract cancellations, supply chain issues and a wide range of other issues that are affecting the UK economy.

The post Suspension of director liability for wrongful trading appeared first on Grunberg & Co.