The Corporate Insolvency and Governance Act 2020 (CIGA 2020) inserted a new Part A1 into the Insolvency Act 1986 (IA 1986) which provides for a new insolvency process whereby directors of a company can obtain a free-standing moratorium for the company. This lasts for an initial period of 20 business days, which can be extended.
It is designed to allow viable businesses time to restructure or seek new investment free from creditor action. The intention is to provide a streamlined procedure that keeps administrative burdens to a minimum, makes the process as quick as possible and does not add disproportionate costs on to struggling businesses.
The moratorium is free-standing—it is not a gateway to or tied to a particular insolvency or restructuring process.
For an overarching guide to the moratorium, see Practice Note: Moratorium—an introductory guide.
The company needs to meet the following criteria:
it is, or is likely to become, unable to pay its debts, and
it is likely that the moratorium would result in the rescue of the company as a going concern
In
To view the latest version of this document and thousands of others like it, sign-in with LexisNexis or register for a free trial.
**Trials are provided to all LexisNexis content, excluding Practice Compliance, Practice Management and Risk and Compliance, subscription packages are tailored to your specific needs. To discuss trialling these LexisNexis services please email customer service via our online form. Free trials are only available to individuals based in the UK, Ireland and selected UK overseas territories and Caribbean countries. We may terminate this trial at any time or decide not to give a trial, for any reason. Trial includes one question to LexisAsk during the length of the trial.
This week's edition of Restructuring & Insolvency weekly highlights includes: the publication by the Insolvency Service of monthly insolvency...
The Insolvency Service has reported that Ademilson Nascimento has been disqualified as a company director for 15 years after fraudulently obtaining a...
The Insolvency Service has announced that Newcastle recruitment consultant Lucien Ekamba-Elombe had been sentenced for offences including Covid-19...
Lord Briggs of Westbourne, Justice of the UK Supreme Court, delivered a keynote address at the Oxford Civil Justice Systems Conference, warning that...
How to commence a voluntary winding-upThis Practice Note sets out the position from 6 April 2017.The resolution to wind-upA company may only enter voluntary liquidation if:•it has a fixed period for its duration which has expired or an event has occurred which its articles say is an event leading to
Receivership—an introductory guideThe appointment of a receiver is a remedy for creditors and certain third parties to protect their interest in assets of a company.This guide gives an introduction to the types of receiverships available and some of the effects of appointing a receiver. For links to
Dissolution of a company following compulsory liquidation or creditors' voluntary liquidationCompulsory liquidation or winding up by the courtWhere the Official Receiver is appointedOn the making of a winding-up order by the court, the official receiver (OR) is appointed as liquidator.When the OR
How an administration comes to an endThere are several ways in which an administration can come to an end depending on the specific circumstances of the administration.The starting point is that an administration should not last longer than 12 months—the administration will come to an automatic end
0330 161 1234