The Insolvency Act 2000, which today received royal assent, is designed to encourage enterprise and to support viable businesses.
The act will give small companies in financial difficulty the option of breathing space within which to present a rescue plan (called a Company Voluntary Agreement or CVA) to their creditors and will improve the efficiency and effectiveness of the procedure of the disqualification of unfit company directors.
It is hoped that this act will stop creditors from taking legal action against the assets of a floundering company before it has had the chance to agree a solution to the problem with them.
Implementation of the act will take place when the necessary secondary legislation is in place next year.
Department of Trade and Industry