Due to the ongoing COVID pandemic and associated economic downturn, the number of companies facing the prospect of insolvency, or being struck off the Register of Companies, is increasing daily. Whilst the rules on striking off have been relaxed by Companies House where late delivery of accounts etc has been caused by COVID, these are only temporary measures. Indeed, the compulsory striking off process has recently resumed for companies that Companies House don’t consider are currently operating, so it may be that normal practice isn’t far away.
Wrongful trading rules, which can result in directors being personally liable for losses incurred as a result of continued trading, are being temporarily suspended in recognition of the large number of businesses being impacted by COVID-19. While this news will be welcomed by businesses across the UK, directors should not be complacent about their responsibilities.