The Government is introducing urgent law changes to the Companies Act to give directors temporary relief from potential personal liability when the business faces significant liquidity problems. The changes will not cover serious breaches of duty.
The temporary changes include:
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Giving directors of companies facing significant liquidity problems because of COVID-19 a ‘safe harbour’ from insolvency duties under the Companies Act.
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Enabling businesses affected by COVID-19 to place existing debts into hibernation until they’re able to start trading normally again
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Allowing the use of electronic signatures where necessary due to COVID-19 restrictions.
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Giving the Registrar of Companies the power to temporarily extend deadlines imposed on companies, incorporated societies, charitable trusts and other entities under legislation.
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Giving temporary relief for entities that are unable to comply with requirements in their constitutions or rules because of COVID-19.
The law changes will be retrospective. We’ll update you on how to access the relief package and the eligibility requirements once they have been finalised. Read more here.