Northern Ireland Assembly and Covid-19 emergency legislation. What about co-ops?
On the 2nd June 2020, the Northern Ireland Assembly agreed that amendments to the Northern Ireland’s insolvency and company legislation to assist companies and mutuals in financial difficulties, as a result of the coronavirus pandemic, are to be included in the Corporate Insolvency and Governance Bill, as introduced in the House of Commons on the 20th May 2020.
These measures will improve the tools with which a financially distressed, but ultimately viable, business can be rescued, thereby preserving economic value and saving jobs in the current climate and improving the economic recovery. The objective is to provide a breathing space to companies and mutuals if they find themselves in difficulties due to the pandemic.
In ‘normal’ circumstances, these amendments would have required a local Act passed by the NI Assembly as this is a devolved matter, but given the emergency and the overarching need to provide the best chance of survival to companies and mutuals, the amendments are going to be become law in Northern Ireland via secondary legislation to the Bill passed in Westminster.
In summary, these measures will look to introduce greater flexibility into the insolvency regime and allow time (an extended moratorium) for rescue their business while protecting supplies, to support directors to continue trading through the emergency without threat of personal liability and protecting companies from aggressive creditor action. Finally, to provide companies with temporary easements on company filing requirements and requirements relating to meetings including annual general meetings.
The Department for the Economy has informed Co-operative Alternatives that relaxation of current requirements relating to filing accounts and holding AGMs, will be extended to co-operatives, community benefit societies and credit unions until the 30th September. These amendments are particularly particular important to societies that engage members in decision making without breaking any existing restriction due to the coronavirus. Following the motion passed on the 2nd June, we also expect to see the extension of the new temporary insolvency measures to co-operatives and community benefit societies to provide them with the same breathing space for recovery and the best chance to survival as companies.
Other legislative changes on the way.
Co-operative Alternatives was informed by the Department for the Economy about another matter for potential legislative change. The increase of the limit of the ‘nomination of property’ in co-operatives, community benefit societies and credit unions is under consideration. The current limit is £10,000 and ‘nomination forms’ are widely used by societies and credit unions to nominate potential beneficiaries in case of death. The Department of Finance will be responsible for the legislative change and at present there is no particular suggestion to what that limit increase may look like. Co-operative Alternatives would be interested in gathering some opinions from societies and credit unions who may have concerns about the current limit and/or the potential increase.
Please get in touch with us at firstname.lastname@example.org