The Corporate Insolvency and Governance Act 2020 (Coronavirus) (Suspension of Liability for Wrongful Trading and Extension of the Relevant Period) Regulations 2020
| Year | 2020 |
2020 No. 1349
Insolvency
The Corporate Insolvency and Governance Act 2020 (Coronavirus) (Suspension of Liability for Wrongful Trading and Extension of the Relevant Period) Regulations 2020
Made 24th November 2020
Laid before Parliament 25th November 2020
Coming into force 26th November 2020
The Secretary of State makes the following Regulations in exercise of the power conferred by section 20(1)(c) of, and paragraph 2(2)(b) of Schedule 14 to, the Corporate Insolvency and Governance Act 20201.
Further to section 21(2) of that Act, the Secretary of State is satisfied that these Regulations are expedient for the purpose of securing that the duties of persons with corporate responsibility, or the liability of those persons to any sanction, take due account of the effects of coronavirus on business or on the economy of the United Kingdom.
Further to section 22(1) of that Act, the Secretary of State has considered the effect of these Regulations on persons likely to be affected by them.
Further to section 22(2) of that Act, the Secretary of State considers that—
(a) the need for the provision made by these Regulations is urgent;
(b) the provision made by these Regulations is proportionate to the purpose for which it is made;
(c) is it not practicable without legislation to bring about the result intended to be brought about by these Regulations; and,
(d) the Secretary of State cannot make the same provision in other subordinate legislation that is made in these Regulations.
Citation and commencement
1. These Regulations may be cited as the Corporate Insolvency and Governance Act 2020 (Coronavirus) (Suspension of Liability for Wrongful Trading and Extension of the Relevant Period) Regulations 2020 and come into force on 26th November 2020.
Suspension of liability for wrongful trading: Great Britain
2.—(1) In determining for the purposes of section 214 or 246ZB of the Insolvency Act 19862(liability of director for wrongful trading) the contribution (if any) to a company’s assets that it is proper for a person to make, the court is to assume that the person is not responsible for any worsening of the financial position of the company or its creditors that occurs during the relevant period.
(2) In this regulation the “relevant period” is the period which—
(a)
(a) begins with 26th November 2020, and
(b)
(b) ends with 30th April 2021.
(3) Paragraph (1) does not apply if at any time during the relevant period the company concerned is excluded from being eligible by any of the paragraphs of Schedule ZA1 to the Insolvency Act 1986 listed in paragraph (4), as they apply for the purposes of this paragraph (see paragraph (5)).
(4) The paragraphs of Schedule ZA1 to the Insolvency Act 1986 are—
(a)
(a) paragraph 3 (insurance companies),
(b)
(b) paragraph 4 (banks),
(c)
(c) paragraph 5 (electronic money institutions),
(d)
(d) paragraph 6 (investment banks and investment firms),
(e)
(e) paragraph 9 (payment institutions),
(f)
(f) paragraph 10 (operators of payment systems etc),
(g)
(g) paragraph 11 (recognised investment exchanges, clearing houses, etc),
(h)
(h) paragraph 12 (securitisation companies),
(i)
(i) paragraph 13 (parties to capital market arrangements),
(j)
(j) paragraph 15 (public-private partnership project companies), and
(k)
(k) paragraph 18 (certain overseas companies).
(5) In their application for the purposes of paragraph (3)—
(a)
(a) each of paragraphs 13 and 15 of Schedule ZA1 to the Insolvency Act 1986 has effect as if in sub-paragraph (1)—
(i) the words “, on the filing date” were omitted, and
(ii) paragraph (b) were omitted, and
(b)
(b) paragraph 18 of that Schedule has effect as if for “paragraph 2” in both places, there were substituted “paragraphs 2, 7 and 8”.
(6) Paragraph (1) also does not apply if at any time during the relevant period the company concerned—
(a)
(a) has permission under Part 4A of the Financial Services and Markets Act 20003to carry on a regulated activity, and
(b)
(b) is not subject to a requirement imposed under that Act to refrain from holding money for clients.
(7) This regulation has effect—
(a)
(a) in so far as it relates to section 214 of the Insolvency Act 1986, as if it were...
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