Moratorium
A legally imposed period during which creditors cannot take enforcement action against a debtor. In corporate insolvency, an administration moratorium prevents creditors from enforcing security or commencing legal proceedings without the court's permission. A standalone moratorium was introduced by the Corporate Insolvency and Governance Act 2020.
Independent editorial summary — not the official statute text. Read the official version on legislation.gov.uk.
The standalone company moratorium sits in Part A1 of the Insolvency Act 1986, inserted by the Corporate Insolvency and Governance Act 2020. Part A1's overview provision states that it 'contains provision that enables an eligible company, in certain circumstances, to obtain a moratorium, giving it various protections from creditors set out in this Part'. Eligibility is defined by reference to Schedule ZA1 of the Act, and the moratorium is obtained through a formal process rather than arising automatically.
Under section A3, for an eligible company that is not already subject to an outstanding winding-up petition, 'The directors of the company may obtain a moratorium for the company by filing the relevant documents with the court' — a route that does not require a court hearing. Where a winding-up petition is already outstanding, section A4 instead requires the directors to apply to the court, which may make an order putting the company into a moratorium only if satisfied that this would achieve a better result for creditors as a whole than an immediate winding up. In every case the relevant documents must include a statement from a qualified 'monitor' confirming that the company is eligible and that they consent to act.
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Official sources
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