Date posted: 6/04/2020

Insolvency relief for businesses impacted by COVID-19

The Government will introduce legislation to make changes to the Companies Act to help businesses facing insolvency due to COVID-19 to remain viable.

Changes to the Companies Act will support the Government's work to cushion the economic impact for New Zealand and to support businesses and protect jobs and incomes, Finance Minister Grant Robertson said.

The move was announced on 3 April "to give businesses certainty that these measures are being worked through. We will be asking Parliament to agree to make some of these changes retrospective."

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 until they are able to start trading normally again
  • 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.

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