On Saturday 28 March 2020, the Business Secretary, Alok Sharma, announced two measures to help charities during the coronavirus (COVID-19) outbreak. Both measures are primarily relevant to charitable companies

We await further details of both proposals.

These are:

Directors have a duty to act in the best interests of the company. A director has the following general duties under the Companies Act 2006:

In this week’s update: Guidance on virtual board and committee meetings, updates and guidance on AGMs, pre-emption principles are relaxed and a few other items.

This week, in coronavirus-related news

Following the outbreak of a global pandemic unprecedented in recent memory, the UK is now reeling from the devastating effects of the coronavirus. Small and medium-sized businesses throughout the nation will already have been forced to come to terms with this new reality, through a combination of staff illness, forced closures, supply chain disruption and loss of business.

The Coronavirus Act 2020 is now in force and Section 82 of that Act effecting the postponement of the landlord’s right to forfeit for non-payment of rent is causing consternation amongst both landlords and tenants as they seek to navigate through these uncertain times.

On 28 March, 2020, the UK Government announced that it intends to amend insolvency law to give companies breathing space and allow them to keep trading while they explore options for rescue. The changes include (a) a temporary suspension of wrongful trading by directors of UK companies for three months commencing on 1 March, 2020 and (b) the in troduction of a moratorium for companies in financial difficulty preventing creditors enforcing debts for a period of time. Full details of the proposed changes are yet to be published.

Wrongful Trading

Despite what seemed like three months ago to be something only happening a very long way away, and would hopefully dissipate as quickly as it started, the Coronavirus pandemic has well and truly arrived on our shores.

Daily news reports are revealing the far-reaching effects of the outbreak, the likes of which have not been seen for generations. In what form, and to what extent, the health, financial and social implications will be in the aftermath of the pandemic remain an unknown quantity for us all.

The Government continues to develop its response to the COVID-19 pandemic. In this Insight we examine the weekend's announcement from the Business Secretary that provides some welcome good news for directors.

The government has announced a suspension of the wrongful trading rules under the Insolvency Act 1986. Wrongful trading can give rise to individual liability for company directors if it appears that they continue to trade a company when it is effectively insolvent. The suspension is part of a range of measures designed to help struggling companies keep trading during the Covid-19 outbreak. Further details of the implementation are awaited however the changes will apply retrospectively from 1 March 2020.

As businesses seek to adapt to deal with the financial impact of COVID-19, boards of directors have been faced with the difficult decision of having to file for insolvency or take steps to preserve business continuity and live to fight another day. Understandably directors' duties is a topic that has come keenly into focus with directors wishing to ensure that, whatever steps they take, they do not incur personal liability.