Wrongful trading is an offence under the Insolvency Act 1986, which makes it unlawful for directors of a company to continue to trade if they know that liquidation of the business is unavoidable. 

Business Secretary Alok Sharma last week announced plans to amend insolvency legislation to suspend wrongful trading in order to help businesses overcome the unforeseen hardship caused by Covid-19. 

In line with other financial aid packages which have been announced recently, and in an attempt to help secure the futures of many companies across different sectors, this will likely be welcomed by businesses. In particular, smaller companies may be able to benefit from this initiative greatly as the threat of money trouble is much greater for them than it is for the larger, more financially stable businesses.