Covid 19: Suspension of UK Wrongful Trading Laws
The UK Government will temporarily suspend wrongful trading laws as one element of a package of measures intended to assist UK businesses with coping with economic difficulties resulting from difficulties arising from the coronavirus pandemic. However, wrongful trading laws will not be suspended for all companies in the UK.
The following companies will be excluded from the temporary suspension of wrongful trading laws:
- insurance companies;
- electronic money institutions;
- investment banks and investment firms;
- payment institutions;
- operators of payment systems;
- recognised investment exchanges and clearing houses;
- securitisation companies;
- companies that are party to capital market arrangements;
- public-private partnership project companies; and
- overseas companies that correspond with the above exceptions.
It is therefore imperative that directors consider whether their companies fall within any of the numerous exceptions set out in the Bill prior to relying on the temporary suspension of wrongful trading laws to shield them from liability which otherwise would fall under the Insolvency Act 1986.
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Please note that this article is provided for general information only. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content of this blog.