The Corporate Insolvency and Governance Bill was published and had its first reading in Parliament on 20 May 2020.
The objective of the Bill is to provide businesses with the flexibility and breathing space they need to continue trading and comply with their legal obligations in the difficult conditions arising from the COVID-19 pandemic. The legislation is expected to be fast-tracked through Parliament.
The Bill will allow corporate entities that need to hold meetings to do so in ways that are aligned with the current social distancing rules. The period which the measure will cover is between 26 March 2020 and 30 September 2020 (“relevant period”). The September date is flexible and there is the ability for the Government to extend the date in increments until 5 April 2021. Equally, the period may be reduced should social distancing measure be relaxed earlier than anticipated.
During this relevant period, it will be possible for:
- Members' meetings to be held, and votes to be cast, by electronic means, irrespective of whether this is permitted by their constitution; and
- If their constitution requires an AGM to be held on a date falling within the relevant period, they can postpone holding that meeting up to 30 September 2020 (subject to any further extension of time by the government).
The flexibilities mentioned within the bill will be available to charitable companies, charitable incorporated organisations (CIOs) mutual societies (including co-operative and community benefit societies and friendly societies). The Charity Commission
guidance on the Coronavirus recognises that charities may have no choice but to decide to cancel or postpone their AGM or other critical meetings. Therefore, this bill will be welcomed by charities who are now provided with the option to proceed with their AGMs subject to abiding by the social distancing rules in place at the time.
For more information please contact Saffa Mir 01604 233233 or click here
to email Saffa.