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Directors duties update - three month extension to file accounts and wrongful trading

View profile for Julie Hunter
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The art of sharing and setting up a private company

The government continues to issues briefings on their measures to ease the regulatory burden on companies during the current crisis. Further measures to assist directors and SMEs are expected over the coming weeks, and we will continue to update our advice as necessary.

Meanwhile, current measures to assist include:

  • A three month extension of the time limit in which to file accounts with Companies House: note that directors must apply for this extension of time to Companies House through its fast tracked online system and must provide Covid-19 related reasons for the extension to be automatically granted. Late filing penalties will still be applied if accounts are filed late or after the extension period has expired.
     
  • Appeals against late filing penalties based on Covid-19 factors will be considered on a case by case basis and directors will need to demonstrate the reasons for late filing are directly linked to Covid-19 issues.
     
  • The rules on wrongful trading will be temporarily suspended. This is yet to be implemented into law but if and when it is, it will be back dated to 1st March 2020. Any wrongful trading activity before 1st March 2020 will still be enforced. Once the law is in place, it is designed to remove the threat to directors incurring a personal liability and intended to assist otherwise financially distressed companies by allowing them to continue to trade through the crisis.

If you require specific advice regarding your company’s operations or terms of trade, please contact our commercial law team on 01616966229.

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