Details released of Emergency Covid-19 Insolvency and Debt Recovery reforms

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The Business Secretary Alok Sharma will be given new powers to help company directors during the current pandemic. This will enable him to extend deadlines for company filings amongst other new measures.

The majority of the new measures are aimed at providing Limited Companies maximum survival chances. It is said it will help protect jobs and aid the Country’s economical recovery post Coronavirus.

Many Companies have already fallen victim to the Lockdown including Debenhams and Carluccios going into administration. Thousands of jobs have put put at risk following the Coronavirus pandemic.

Additional measures include a moratorium preventing legal action being taken against companies without permission of the courts. The new bill also prevents suppliers from terminating agreements to stricken companies which could present an absolute nightmare for many.

Further measures include the removal of personal liability for Company Directors for wrongful trading. Other measures include the removal of winding up orders for companies with unpaid debts and voiding all statutory demands.

All these details are said to be in a document being circulated by the Department for Business.

Companies House has already done all it can under existing law to offer extensions to those deadlines,” the BEIS document said.

“Over 50,000 companies have taken advantage of this flexibility already, but they may need more.

“The bill allows the Secretary of State temporarily to make further extensions, enabling struggling businesses to focus on the things that matter most while they have reduced resources and restrictions.”

Critics state that instead of just a few companies being at risk, some of the proposed changes will put many more at risk. The removal of any debt recovery threat will essentially create a free for all.

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