Insolvency Measures Extended To Help Charities

Further to our blog published on 25th August 2020 talking about the impact of Covid-19 on charities and their ability to hold general meetings, vital measures in the Corporate Insolvency and Governance Act 2020 are being extended to continue to take the pressure off charities dealing with Covid-19.

The measures were due to expire on 30th September 2020. The Corporate Insolvency and Governance Act 2020 (Coronavirus) (Extension of the Relevant Period) Regulations 2020 (the Extensions) was laid before the UK Parliament yesterday and will come into force on 29th September 2020.

Under the Extensions, charities can continue to hold meetings, whether Annual General Meetings (AGM) or general meetings, virtually. This means that:

• The meetings need not be held at a particular place;
• Meetings may be held and votes may be cast by electronic or other means;
• The meeting may be held without a quorum of participants having to be together in one place; and
• Members do not have the right to attend in person, to participate other than by voting, or to vote by particular means.

Members, however, continue to have a right to vote by some means, whether that is electronically or by the traditional proxy method.

The Extensions are intended to ensure that charities and other qualifying bodies are able to hold AGMs and other meetings in a manner consistent with the need to prevent the spread of the coronavirus. The requirements of a charity’s governing documents and any relevant provisions in legislation, now have effect subject to these temporary provisions.

The period within which a charity or other qualifying body must hold an AGM (whether as a result of legislation or a provision in the company’s articles) has been extended to 30th December 2020. This applies where a charity or other qualifying body was or is required to hold an AGM before the end of a period expiring during the period between 26th March 2020 and 30th December 2020. It has the effect of giving charities until the end of that period (or a later date, if extended again) to hold their AGM or general meeting.