The Corporate Insolvency and Governance Act 2020 (CIGA): Relaxing the compliance burden on businesses during the Covid-19 outbreak

CIGA makes changes to company and insolvency laws. These are directed at easing the burden on businesses during the Covid-19 crisis and giving them flexibility to enable them to continue to trade, and promote their chances of survival.  CIGA and secondary legislation made under it also relax various compliance timescales for companies, CICs and LLPs.

CIGA came into force at the end of June.  In summary CIGA: 

1. grants an automatic extension for filing annual accounts, confirmation statements, mortgages and charges and for making event-driven filings;
2. allows more flexibility around when and how annual general meetings (AGMs) are held;
3. introduces new corporate restructuring tools to the insolvency regime to give companies the time they need to maximise their chance of survival; and
4. temporarily suspends wrongful trading provisions to support directors during this time.

We consider the first of these in more detail below.  For an outline of the changes regarding AGMs, the restructuring tools and the suspension of wrongful trading provisions, please see our previous article.

The time periods for the Companies House event driven filings set out below have been automatically extended by regulations made under CIGA.  These temporary provisions came into force on 27 June 2020 and expire on 5 April 2021.

• Annual accounts – Filing period extended from 9 to 12 months from the end of the financial year for a private company, CIC or LLP and from 6 to 9 months for a public company. The extension does not apply to any entity which has already applied for an accounts filing extension that was offered Companies House offered from the start of the Covid-19 crisis.
• Confirmation statements – Filing period extended from 14 to 42 days from the annual data review date, which is also known as the ‘made up date’.
• Mortgages & charges – Filing period extended from 21 to 31 days from the date of creation or variation of the charge. This does not apply filing date has already been extended by a court order.
• Officer notifications – Period extended from 14 to 42 days to give notice of the appointment or removal or change in details of a director or secretary.
• PSC notifications – Period extended from 14 to 42 days to give notice of a person becoming or ceasing to be a person with significant control, a ‘relevant legal entity’ or an ‘other registrable person’, a change in the control or any change in the controller’s details.
• Registered office address – Period extended from 14 to 42 days to give notice of a change of registered address.

There will be no extension for those companies, CICs and LLPs whose accounts or confirmation statement filing dates fall on or after 6 April 2021.  The normal timescales shall apply.

Part of the quid pro quo for members having limited liability is a right for members of the public to be able to inspect the statutory registers of a company e.g. the register of allotments, the register of members, the register of directors, the register of secretaries, the register of people with significant control and the register of charges.  The Regulations temporarily extend the timescale within which an entity must comply with this seldom exercised right from 14 days to 42 days.

These various timescales have been temporarily relaxed to enable entities suffering staff shortages due to Covid-19 to more easily fulfil their compliance obligations.  Best practice, however, remains to a) promptly notify Companies House in respect of any such events, which in most cases can be done using the Companies House electronic filing service and b) promptly record all relevant changes in the statutory registers of the entity.

If you would like further guidance on Companies House filing requirements or you would like to receive company secretarial training, please contact Richard Hiscoke or your usual member of our Corporate Team.