In March 2020 one of the measures introduced in the Corporate Insolvency and Governance Act was the restriction of statutory demands and winding up petitions.
These restrictions were put in place to protect businesses from aggressive creditor enforcement, in an attempt to assist businesses concentrate their efforts on recovery.
Whilst they were due to expire on 30 June 2021, regulations are now set to be laid, that will mean the restrictions will remain for a further three months, until September 2021.
Currently a business that served a statutory demand between 1 March 2020 and 30 June 2021 cannot proceed with a winding up petition. A business can only present a petition for the winding up of a company, if it has a reasonable belief that the business has not been adversely affected by COVID-19 or that it would not have been able to meet the demand, regardless of the effects of the pandemic.
The Government’s full announcement can be found here.
Should you find yourself on either side of the fence, then now is the time to seek advice.