The Companies and Intellectual Property Commission (Commission) issued a practice note on 24 March 2020 confirming that where a company is temporarily insolvent and still carrying on business or trading due to business conditions which were caused by the Covid-19 pandemic, it will not invoke its powers under section 22 of the Companies Act which empowers the Commission to issue notices, and if necessary compliance notices, to companies if it has reasonable grounds to believe that the company is trading or carrying on business recklessly, with gross negligence or for fraudulent purposes.
The practice note will lapse within 60 (sixty) days of the declaration of a national disaster being listed.