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Has wrongful trading been suspended?

The quick answer

Wrongful Trading was suspended on the 1st March 2020 until the 30th September 2020. This was because of the economic impact of the Coronavirus on businesses. 

In more detail

Wrongful Trading

The issue with Wrongful Trading is that the directors can be personally liable for the company debts if they keep trading and the situation gets worse (and they should have known better). 

It becomes very important to have accurate trading figures and have regular director meetings to decide if trading should continue if the business is insolvent.  If you do continue make sure that you keep a record of the reasons why you think trading will improve. 

When you are insolvent and continue trading you are risking creditors’ money not your own and you have a duty to those creditors not to make the position worse.

 If in doubt take some professional advice.

 

tip

If you need insolvency advice the earlier you talk to someone like us the better as you will have more options. We can help, contact us today.

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Author: David Kirk - ACA FABRP
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David Kirk

Licensed Insolvency Practitioner