Important changes to restrictions on winding up petitions
- 1st October 2021
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The UK Government has recently announced that, from 1 October 2021, the restrictions on the use of winding up petitions imposed by the Corporate Insolvency and Governance Act 2020 will be phased out subject to a number of additional temporary conditions. The measures were initially brought in place to protect viable businesses from insolvency as a result of financial difficulties caused by the COVID-19 pandemic.
Whilst the phasing out of protections will begin on 1 October, the updated restrictions will:
- Continue to protect businesses from creditors insisting on repayment of relatively small debts, by temporarily raising the current debt threshold for a winding up petition to £10,000 or more.
- Require creditors to seek proposals for payment from a debtor business, giving them 21 days for a response before they can proceed with winding up action.
These new measures will be in force until 31 March 2022.
For more information about the changing restrictions, please read the full press release.
If you need any specialist advice from our team of legal experts about the impact of COVID-19 on your business, please email firstname.lastname@example.org or call us on 02920 224433. Please contact Senior Partner, Mark Loosemore, or Partner, Siôn Tudur to find out more.