Following many changes to legislation due to Covid-19, the Government have introduced further measures through the Corporate Governance and Insolvency Bill on 20th May 2020. This Bill aims to address some of the governance and insolvency challenges faced by businesses as a result of the coronavirus impact.
Businesses need to be aware of the changes in their corporate responsibilities as a result of the changes brought about by the Corporate Governance and Insolvency Bill to ensure that they are continuing to meet their statutory requirements. Namely, the Bill consists of six insolvency measures and two corporate governance measures.
Businesses, and in particular, Directors should consider the following changes to the legislation and what impact it may have on their business:
– For those businesses that have a legal duty to hold Annual General Meetings (AGMs) and general meetings (GMs) are now allowed to hold these meetings by another means, even if their constitution or articles would not normally allow this. For example, this could mean holding a meeting by video call. This removes the liability for directors for measures that need endorsing by shareholders, and the rights of the shareholders are preserved. This can be applied retrospectively from 26th March, and companies who were forced to postpone their meetings due to Covid-19 will be given a limited period following the introduction of the new bill to use these more flexible rules to hold their meetings.
– Shareholders will not be prevented from exercising their rights to vote under this new legislation although this may not be possible in person but may need to be by post or electronically.
– The Corporate Governance and Insolvency Bill enables the Secretary of State to regulate to extend certain filing deadlines for businesses, specifically the filling of Accounts, Confirmation Statements and Registration of Charges. This is aimed at reducing the pressure on companies that are currently struggling or unable to meet their filing deadlines due to the impact of Covid-19, with the intention of allowing them to focus their resources on keeping their businesses going, whilst still ensuring that the relevant filing requirements still take place within a reasonable time period.
If you are the director of a business it’s critical that you are aware of and meet your statutory requirements and here at Hibberts, our Commercial solicitors can help you with meeting your legal responsibilities. For more information contact our Commercial Law Department.