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01st October 2020

Update to Corporate Insolvency and Governance Bill

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In May we wrote about the charity aspects of the Corporate Insolvency and Governance Act 2020 (“the Act") which was introduced to provide businesses with the flexibility and the breathing space needed to comply with their legal obligations in the difficult conditions arising from the COVID-19 pandemic. One of the main benefits for corporate entities included in the Act was the ability to hold member meetings and enable votes to be cast by electronic means, irrespective of whether this is permitted in their constitution and the ability to postpone the AGM up until 30 September 2020.

The latest update to the Act has been the extension of the deadline from 30 September 2020 to 30 December 2020. By way of reminder the flexibilities mentioned within the Act will be available to charitable companies, charitable incorporated organisations (CIOs) and mutual societies (including co-operative and community benefit societies and friendly societies). The Charity Commission guidance on Coronavirus recognises that charities may have no choice but to decide to cancel or postpone their AGM or other critical meetings. Therefore, this update to the Act 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. Whilst the Act does not apply to unincorporated charities, the Charity Commission guidance sets out their response to their most commonly asked questions, covering topics such as financial support, using reserves and restricted funds, reporting serious incidents and fundraising. The intention of their guidance is to assure all charities that in regards to regulation they will be taking a flexible and pragmatic approach which is in the public interest, whilst at the same time helping trustees to be aware of and think about the long term impact of their decisions on their charity.

For more information on the items raised in this article please contact Saffa Mir on 01604 233233 or click here to email Saffa.