The government has announced that temporary measures brought in to support businesses from insolvency during the pandemic will be phased out from 1 October. Companies in financial distress as a result of the pandemic have been protected from creditor action since June 2020. As the economy returns to normal trading conditions, the restrictions on creditor actions will be lifted.
The good news is that new measures will be brought in to help smaller companies get back on their feet to give them more time to trade their way back to financial health before creditors can take action to wind them up.
The new legislation will:
These measures will be in force until 31 March 2022.
Whilst this news may bring comfort to a lot of struggling businesses who have been trying to keep afloat for the last year, sadly not all businesses will be able to benefit and therefore professional advice should be taken as soon as possible, so that directors do not fall fowl of wrongful trading, which could have a personal cost to the directors of the company.
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