Insolvency relief for businesses impacted by COVID-19
The Government will be introducing legislation to make changes to the Companies Act to help businesses facing insolvency due to COVID-19 to remain viable, with the aim of keeping New Zealanders in jobs.
The temporary changes include:
- giving directors of companies facing significant liquidity problems because of COVID-19 a ‘safe harbour’ from insolvency duties under the Companies Act
- enabling businesses affected by COVID-19 to place existing debts into hibernation for up to 7 months
- allowing the use of electronic signatures where necessary due to COVID-19 restrictions
- giving the Registrar of Companies the power to temporarily extend deadlines imposed on companies, incorporated societies, charitable trusts and other entities under legislation
- giving temporary relief for entities that are unable to comply with requirements in their constitutions or rules because of COVID-19.
How these new measures will work
