Next step in insolvency relief for businesses affected by COVID-19
Published: 05 May 2020
The Government is progressing with changes to insolvency and company law through the COVID-19 Response (Further Management Measures) Legislation Bill, which has been introduced to Parliament.
The Bill contains a range of measures to support businesses through COVID-19, including support for businesses facing insolvency due to the financial impacts of the pandemic.
Measures included in the Bill aim to help businesses remain viable by:
- placing businesses’ existing debt into hibernation until they can start trading normally again
- providing directors of companies facing significant liquidity problems due to COVID-19 with a ‘safe harbour’ for their insolvency-related duties under the Companies Act
- providing temporary relief for companies and other entities facing difficulties in complying with their statutory obligations, or obligations under their constitutions or rules, because of COVID-19
- allowing the use of electronic signatures and other electronic communications.
Once the Bill has had its first reading, it will be referred to the Epidemic Response Committee for consideration and reported back to the House on Tuesday 12 May. It will then move through the remaining legislative stages as quickly as possible.
More information about insolvency relief for businesses affected by COVID-19 is available on the Companies Office website(external link).
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