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Corporate Insolvency and Governance Act 2020 – the changes in 2021

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Corporate Insolvency and Governance Act 2020 – the changes in 2021

Some temporary relief measures introduced under the Corporate Insolvency and Governance Act 2020 (CIGA) are extending, the Government announced on 16 June 2021.

CIGA was introduced in June 2020 to support companies facing the threat of insolvency during the height of the Covid-19 pandemic. The most affected businesses were small and medium-sized enterprises (SMEs) and those in the entertainment, hospitality and tourism sectors.

There are some key changes that companies need to be aware of, which we have included below:

  1. The deadline for the temporary prohibition on creditors issuing statutory demands and presenting winding-up petitions for debts arising out of or in businesses affected by Coronavirus is extended from 30 June 2021 to 30 September 2021.

Currently, creditors can only present this type of petition if they successfully pass the “Coronavirus test”. This test requires them to prove to a court that they have reasonable grounds for believing that Covid-19 has had no financial impact on the company in debt or that the debt issues would have risen regardless of the pandemic’s impact on the company.

  1. Prohibition placed onforfeiture of commercial leases by landlords for non-payment of rent changes is now ending on 25 March 2022 instead of 30 June 2021.


  1. The temporary suspension of personal liability of directors for wrongful trading expired on midnight of 30 June 2021, meaning Directors are now not protected from wrongful trading liability arising under section 12 of CIGA and sections 214 and 246B of the Insolvency Act 1986. There has been no news of extending this.


If you are concerned about the possibility of your company facing insolvency, then please contact us at your earliest convenience.


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