Under the Corporate Insolvency and Governance Bill, UK companies will be given access to tools to help them restructure their debt and keep operating through the crisis.
It's hoped that the bill, which was presented to Parliament earlier today (20 May), will protect otherwise viable companies from collapse.
Measures introduced under the bill include the temporary suspension of wrongful trading provisions until at least the end of June, which will allow companies to continue operating without the threat of personal liability to its directors.
As outlined last month, a moratorium on the use of the use of statutory demands and winding up orders is also included, with landlords and investors asked to work collaboratively with high street businesses unable to pay their bills while the Coronavirus pandemic is ongoing.
Additionally, regulatory requirements on the timing of annual general meetings will be temporarily lifted; and the submission of filings to Companies House may be delayed.
Trade body UKHospitality has described the bill as an important piece of legislation.
"The [Corporate Insolvency and Governance] Bill should provide businesses with some very welcome respite from aggressive landlords and valuable breathing space to restructure their business," says UKHospitality chief executive Kate Nicholls.
"It is very encouraging to see the Government listening to the concerns of tenants and landlords, and acting decisively on what is a complex issue.
“It should give some impetus for bringing landlords to the table to understand the pressures that tenants are facing. The majority of landlords have been cooperative but a minority have aggressively pursued hospitality businesses that are moth-balled, have no revenue and cannot hope to pay. It is also positive to see protection extended to landlords to ensure they are not obliged to pursue tenants.
“Extension of the moratorium would allow more time for businesses and Government to get to grips with the scale of the crisis so we can begin to work out long-term solutions to protect local communities. Measures in the bill will provide more breathing space to deliver rent solutions with lower rent liabilities through mandated agreements.”
