The Corporate Insolvency & Governance Act 2020 was enacted very quickly for the protection of viable businesses during the pandemic. It covers a number of areas including, some amendments were made under Section 10 from 1 October 2021 and predicted to remain in place until 31 March 2022 and beyond:
- Directors liability for trading whilst insolvent removed extended from 1 March 2020 to 30 September 2020 and 26 November 2020 until 30 June 2021
- A creditor may again rely upon an unpaid Statutory Demand as evidence of inability to pay debts when they fall due.
- A creditor must not present a Winding-Up Petition for excluded debt which is defined as debt due by a tenant under a business tenancy that is unpaid due to the financial effects of Covid 19.
- A creditor must not present a Winding-Up Petition for a debt less than £10,000.00, it must be due and a liquidated claim.
- A schedule 10 Notice must be delivered to the debtor (registered office or principle place of business) stating:-
- a) the creditor is seeking debtors proposals for payment of the debt; and
- b) if the debtor has not made a proposal that is to the creditor's satisfaction within 21 days, the creditor intends to present a Winding-Up Petition.
- A creditor may apply to the Court for an order that it does not need to deliver a Schedule 10 Notice or give the debtor 21 days to make a satisfactory proposal.
However the creditor's Winding-Up Petition will need to include both of the following statements:-
That the requirements of paragraph 1 of Schedule 10 have been met.
Either that no proposals for payment of the debt were made or a summary of the reasons why the proposals made were not to the creditor's satisfaction.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.