Coronavirus COVID-19 - Temporary Changes to the Companies Act 1993
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Temporary Changes to the Companies Act 1993
The Government has recently announced that it will be introducing legislation to make temporary changes to the Companies Act 1993 to help companies facing insolvency due to COVID-19.
The temporary changes include:
- Giving directors of companies facing significant liquidity problems because of COVID-19 a ‘safe harbour’ from insolvency duties under the Companies Act 1993,
Commerce and Consumer Affairs Minister Kris Faafoi said that a “safe harbour’ will help businesses to keep trading, rather than prematurely closing up.
- Enabling businesses affected by COVID-19 to place existing debts into hibernation until they are able to start trading normally again,
According to Finance Minister Grant Robertson debts will be able to be placed into hibernation, known as a Business Debt Hibernation (BDH), until a business resumes normal trading with the agreement of 50 per cent of a business’s creditors.
- Allowing the use of electronic signatures where necessary due to COVID-19 restrictions,
- Giving the Registrar of Companies the power to temporarily extend deadlines imposed on companies, incorporated societies, charitable trusts and other entities under legislation, and
- Giving temporary relief for entities that are unable to comply with requirements in their constitutions or rules because of COVID-19.
We will provide updates on the new legislation as it is introduced.
In the meantime, if you have any queries, or we can be of assistance please contact our commercial team:
firstname.lastname@example.org or call 06 757 5183