Four sets of extensions were granted by the Government on 29 September 2020 to the temporary provisions introduced by the Corporate Insolvency and Governance Act 2020 which had been due to expire on the 30 September 2020. This will be of particular interest to Company Directors that an extension was granted in relation to the provisions relating to winding up petitions, but no extension was granted to the suspension of the provisions relating to wrongful trading.

Winding up of Companies

  • As matters now stand a petition to wind up a company cannot be presented if it is based on a statutory demand presented between 1 March 2020 and 31 December 2020.


  • Up until 31 December 2020 a creditor cannot present a winding up petition on the basis that the company is unable to pay its debts unless they have reasonable grounds to believe that the ‘Coronavirus Test’ has been met, Furthermore the Court cannot make a winding up order unless it is satisfied that the ‘Coronavirus Test’ has been satisfied or that it appears to have been met.


  • Where a winding up order is made on the basis that a company is unable to pay its debts and the ‘Coronavirus Test’ has been passed then the winding up is deemed to have commenced on the making of the order rather than the date that the petition was presented.

The government’s reasoning for the extension is to allow companies breathing space whilst coronavirus restrictions remain in place and to protect them against aggressive creditor action.

Wrongful Trading

The suspension granted under section 12 of the Corporate Insolvency and Governance Act 2020 has not been extended. Section 12 suspended the remedy for liability of a director for wrongful trading for the period 1 March to 30 September 2020. Those provisions will still effect actions pursued under section 214 and 246ZB Insolvency Act 1986 for wrongful trading which include that period.

I understand that dealing with insolvency issues can be complex and stressful, so if you require any advice please do not hesitate to contact me on 01273 284055 or email me at You can also visit our insolvency service page for further details on all our insolvency services.

Darren Stone

Insolvency services