On 20 May 2020 the Corporate Insolvency and Governance Bill 2020 was published. It seems that it will be enforced by the end of June and should provide a temporary relaxation by offering flexibility to businesses (& charities or social enterprises that are structured as companies, community benefit societies, co-operatives) until the end of September 2020.
This Bill aims to help to allow organisations to keep trading but with the potential to avoid insolvency in the stressed financial climate, such as, contractual terms allowing for termination on grounds of insolvency of the other party will not be effective; no winding up proceedings relying on a statutory demand procedure and if Covid-19 was the reason for winding–up proceedings to allow that process to stop.
There are a number of provisions of interest which will also impact on governance:
- AGMs or other members’ meetings will be able to be held electronically even if the governing document does not allow it - if your company should have held an AGM by now under its governing document it will be able to reorganise that to hold it electronically before the end of September;
- Board or committee meetings of the governing body can be held electronically such as by videoconference;
- Filings at Companies House will have extended filing deadlines such as filing of annual accounts, changes to directors, registration of charges. A 3 month extension on application to Companies House is already in place.
For further information please contact Jenny Ebbage or Sarah Burrows.