Today (9 September 2021) the government put out a press release on winding up companies from 1 October 2021 and many tenants will be breathing a sigh of relief.
In summary, new legislation will soon be brought in that will:
- Protect businesses (query whether this relates to all businesses or just smaller companies) by temporarily raising the current debt threshold for a winding up petition to £10,000 or more; and
- Require creditors to seek proposals for payment from a debtor business, giving them 21 days for a response before they can proceed with winding up action.
The announcement also states that the existing restrictions will remain on commercial landlords from presenting winding up petitions against limited companies for rent arrears built up during the pandemic. It will be interesting to see how this is dealt with in the legislation as some landlords were no doubt hoping to rely on this option come October.
These new measures will be in force until 31 March 2022.
The announcement repeats though that businesses should pay rent where they are able to do so.
Temporary insolvency restrictions protections are being lifted and new targeted measures to support small business and commercial tenants introduced.