Corporate moratorium
Temporary protection for an eligible company while its directors pursue a viable rescue.
The standalone corporate moratorium gives an eligible financially distressed company a limited breathing space while directors pursue rescue. Directors remain in control and an independent insolvency practitioner acts as monitor. This is separate from the protection arising within administration and from personal debt moratoria.
Eligibility and the rescue test
A moratorium is not available to every company or business. The legislation excludes particular entities and circumstances. Directors must provide the required statements, and the proposed monitor must address the statutory tests, including the likelihood of rescuing the company as a going concern.
The entry route depends on matters such as an outstanding winding-up petition or overseas status. Ordinary filing and court-application routes should not be treated as interchangeable. A moratorium does not itself write off liabilities or approve a restructuring.
Protection does not mean every payment stops
The legislation restricts specified enforcement and insolvency actions, with exceptions and routes to seek court permission. It also distinguishes pre-moratorium debts with a payment holiday from debts that must continue to be paid.
Wages, certain rent and ongoing supplies, monitor costs and relevant financial-contract debts can fall outside the general payment holiday. Cash-flow planning must account for these obligations. A business unable to pay the debts required during the period cannot assume that protection will continue.
Technical detail
Consult the current debt categories and exceptions in Part A1 of the Insolvency Act 1986 or Part 1A of the Northern Ireland Order. Historic coronavirus modifications and the older small-company nominee moratorium must not be substituted for the permanent monitor-led regime.
Directors and the monitor have different jobs
Directors continue the day-to-day business but face restrictions on certain disposals, borrowing and payments. They must supply the monitor with information needed to perform the statutory function.
The monitor checks the continuing rescue prospect and required payments. The monitor must bring the moratorium to an end when specified termination conditions arise. Appointment of a monitor is therefore not a guarantee that a proposed rescue will be completed.
Duration, extension and exit
The initial period is 20 business days. A further 20-business-day extension without creditor consent is possible if the statutory conditions and filings are met; longer extensions require the relevant creditor consent or court process.
Extensions must be dealt with before expiry. The company may emerge rescued or move into a CVA, restructuring plan, administration or liquidation, depending on the facts and available routes. Ending the period does not itself settle what creditors are owed.
The Scottish framework
The company moratorium in Scotland uses Part A1 of the Insolvency Act 1986, with the relevant Scottish court procedure and filings. It is a corporate rescue measure with a monitor, not an application for a Scottish individual debt moratorium.
Accountant in Bankruptcy’s individual moratorium and the Scottish Debt Arrangement Scheme operate under separate legislation. A shared word does not make the protections or eligibility interchangeable.
The process, at a glance
- Assess eligibility and funding. Directors and the proposed monitor test the rescue prospect and the ability to meet debts that remain payable.Process stage — practical timing varies
- File the documents or obtain an order. The correct statutory route starts the moratorium and appoints the monitor.Statutory milestone — check its trigger and exceptions
- Pursue rescue under supervision. Directors run the company. The monitor checks the statutory conditions while restrictions protect the rescue opportunity.Statutory milestone — check its trigger and exceptions
- Extend if the conditions permit. Required statements, consent or a court order must support any extension before the current period ends.Statutory milestone — check its trigger and exceptions
- Rescue, expiry or early termination. The period ends by time, termination or entry into another procedure. Protection is temporary rather than a debt release.Statutory milestone — check its trigger and exceptions
Sources & review
Read the source in its own context. Legislation may contain commencement provisions and changes not yet applied to the displayed text. Professional guidance is identified separately from law.
Initial source-based editorial review: 26 Oct 2026. Next scheduled review: 26 Nov 2026. Substantive changes are reviewed before publication.
Source-checked editorial overview. It does not assess an individual case or replace the current legislation and court directions.
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