On 23 March 2020, the government passed the Coronavirus Economic Response Package Omnibus Bill 2020 (“the Bill”).
As part of the Bill the government introduced temporary relief for financially distressed individuals and businesses.
The government has increased the threshold for a creditor to initiate bankruptcy proceedings from $5,000.00 to $20,000.00. In addition, the time period for compliance with a bankruptcy notice has been increased from 21 days to 6 months.
The governement has increased the threshold for a creditor to issue a Statutory Demand from $2,000.00 to $20,000.00. In addition, the time period for compliance with a Statutory Demand has been increased from 21 days to 6 months.
Safe Harbour provisions for Directors
As well as allowing companies more time to comply with a Statutory Demand, the government has also provided relief for directors from any personal liability for the company trading while insolvent in respect of debts incurred:
- in the ordinary course of business; and
- during at least the 6 month period after the commencement of the legislation (25 March 2020).
The government is hoping that this temporary relief, combined with other economic measures will ensure that businesses are not forced to permanently cease trading as a result of the COVID-19 pandemic.
Contact us for advice in relation to any of the COVID-19 measures introduced by the government to assist business to continue to trade
- Posted by Ana Haarsma
- On April 17, 2020
- 0 Comments