The Government rules which were published today over applications for a moratorium under the Corporate Insolvency and Governance Act 2020 give these firms a bit more time to get their business in order.
Applying for a moratorium under the Corporate Insolvency and Governance Act 2020
How to apply for breathing space to consider a rescue plan for your company, under measures to support companies and other types of business in financial difficulty. Published 26 June 2020 From: Companies House
- How to get a moratorium
- Extending a moratorium
- What to send to Companies House
- Who it applies to
- Companies House forms and more information
A moratorium gives struggling businesses formal breathing space in which to explore rescue and restructuring options, free from creditor action.
Except in certain circumstances, no insolvency proceedings can be instigated against the company during the moratorium period. It also prevents legal action being taken against a company without permission from the court – with the exception of employment tribunal proceedings, or proceedings between an employer and a worker, which do not require permission of the court to commence or continue.
Directors remain in control of the company and will still need to meet their filing obligations with Companies House. Late filing penalties will still be applied where accounts are filed late.
How to get a moratorium
The directors must file for or apply to court for a moratorium. It will give the company 20 business days to consider rescue options.