Business Recovery Factsheet - Flipbook - Page 3
The government has introduced legislation that will see the temporary suspension of wrongful trading
provisions for company directors to remove the threat of personal liability during the pandemic, applied
retrospectively from 1 March 2020.
The current wrongful trading rules have been of particular concern to directors in recent weeks, given the risk
of personal liability for directors if they fail to take every step to minimise potential losses to creditors once
there is no reasonable prospect of avoiding an insolvent liquidation/administration, which may push directors to
file the company for insolvency proceedings prematurely.
Existing laws for fraudulent trading and the threat of director disqualification will remain in force as a deterrent
against director misconduct.