The Government has made substantial funds available to help as many businesses as possible that have been affected by the level 4 lockdown.
As many companies will know, wage subsidies are available to try to make it easier for companies to pay their staff. More details can be found here; https://www.workandincome.govt.nz/products/a-z-benefits/covid-19-support.html
In short, a company can apply for a 12-week wage package if it can demonstrate a 30% reduction in revenue.
While that can help with the wages, most businesses still face other costs that will still need to be met.
The Finance Minister, Grant Robertson, announced on Friday 3rd April that the Government will be introducing legislation to made changes to the Companies Act to help businesses facing insolvency due to COVID-19. The aim is to help businesses survive.
In summary, the temporary changes will include;
- Giving company directors facing solvency problems a “safe harbour” from their duties under the Companies Act. Essentially, this proposal prevents a director from being pursued for breach of duties for a period of time.
- Enabling a business to place their debts in hibernation for a period of time.
- Allowing the use of electronic signatures where necessary.
- Giving the Registrar of Companies the power to temporarily extend compliance deadlines.
- Giving temporary relief for entities (not just companies) unable to comply with their rules or constitutions.
There are several other proposals in the legislation changes. Watch this space for updates over the coming weeks.
In the meantime, if you or your business want some independent advice on whether these measures could assist your business get through this difficult time, then please call us for a free consultation on 0800 343 343.