Coronavirus Update for Charitable Companies - Insolvency and AGMs

We await further details of both proposals.

These are:

• New insolvency measures to help businesses: Legislation is to be introduced to relax the insolvency framework. Importantly, there is to be a three-month suspension of the wrongful trading rules, to be applied retrospectively from 1 March 2020 for an initial period of three months.

HM Government has said that it will "make changes to enable UK companies undergoing a rescue or restructure process to continue trading, giving them breathing space that could help them avoid insolvency", and that "this will also include enabling companies to continue buying much-needed supplies, such as energy, raw materials or broadband, while attempting a rescue, and temporarily suspending wrongful trading provisions retrospectively from 1 March 2020 for three months for company directors so they can keep their businesses going without the threat of personal liability".

For more on the proposed changes to insolvency law, please see this briefing by Ed Husband and Ambuja Bose in our Insolvency team.

For more on the key issues for charity trustees responding to the coronavirus crisis, please see this briefing from Con Alexander and Shivaji Shiva in our Charities team.

• Flexibility to hold Annual General Meetings safely:

The Business Secretary announced that:

"the government will introduce legislation to ensure those companies required by law to hold Annual General Meetings (AGMs) will be able to do so safely, consistent with the restrictions on movement and gatherings introduced to address the spread of coronavirus.

Companies will temporarily be extended greater flexibilities, including holding AGMs online or postponing the meetings."

For more on the challenges of charity administration during the coronavirus outbreak, please see this briefing from Jaime Hobday in our Charities team.

For specialist advice on how these new measures can help you, please contact Shivaji Shiva in our Charities team on 07788 313298, or complete the form below.