This article does not provide legal advice nor should it be relied upon by anyone receiving it for the purpose of making decisions in relation to their business or otherwise. This article sets out some general concepts which may be relevant for business owners and managers to consider bearing in mind the current uncertain financial landscape.
Current Issues
Nicola Sharp of Rahman Ravelli outlines a recent judgement that allowed a dissolved company to seek an order.
The judgement in the case of Yuzu Hair and Beauty Ltd (Dissolved) v Selvathiraviam [2019] is the first time that the High Court in England has given permission for a company that has been dissolved to apply for a freezing order.
The dissolved company applied for the continuation of a freezing order against its accountant. It had alleged that fraudulent activity by the accountant had led to the company being struck off the register at Companies House.
Directors' Duties and Related Matters, in the Context of COVID-19
25 March 2020
Scope And Purpose of This Note
This note summarises the duties that directors of companies incorporated in England and Wales are subject to.
This note explains those duties, and matters that directors should consider in relation to those duties, in the context of the developing coronavirus disease 2019 (COVID-19), commonly known as the "coronavirus" or simply, COVID-19, pandemic.
Today’s list of winding up petitions has been adjourned for a minimum of three months with petitions being re-listed for June, July and August. ICC Judge Mullen recited in his order that having considered the Protocol for Remote Hearings dated 20th March 2020 and the LCJ’s Review of Court Arrangements due to COVID-19 dated 23rd March 2020, he has concluded that the list “cannot presently be conducted remotely” and that “satisfactory arrangements to ensure safety cannot be put in place”.
Companies are now faced with unprecedented challenges presented by the coronavirus pandemic. In this context, company directors will be trying to do everything they can to protect and preserve the business. However, they do still need to remember their legal duties, so as not to expose themselves to the risk of personal liability if their actions go beyond what the law allows.
Practical steps which directors should be taking now, as explained in more detail below include:
The UK economy cannot ignore the financial shockwaves it feels as a direct impact of the coronavirus pandemic 2019-20. The UK Government has rolled out daily and unprecedented economic measures aimed at supporting and financing struggling business given the effect of this unprecedented economic climate. We recognise that in some cases, this simply will not be enough.
One of the key issues facing all public companies during the COVID-19 crisis is how and when to update necessary market disclosures relating to the risk impact of the pandemic on their business.
History has taught us that prolonged periods of market volatility increase the risks of litigation against both companies and their governing boards, and that the way in which they act now can have long-lasting effects.
Some companies may face severe solvency issues, which will lead to questions around the disclosure of the company’s financial position.
Sky News reports today that the Insolvency Service is considering reforms to insolvency laws which may include a moratorium on winding up petitions against companies and the suspension of rules on wrongful trading.
Businesses will be considering dramatic changes over the next few days and weeks. The Government last week closed certain business such as pubs, theatres, restaurants and cinemas. Last night, the Government went further and ordered that all non-essential retail businesses and hotels should close and that people should not leave their homes to work unless it absolutely cannot be done from home.
Covid-19 - the What, Why and Where?
Over recent weeks, all of us have had to grapple with the potential impact of the current severe strain of 'Coronavirus' known as 'Covid-19' and the impact it may have on us, our families and our businesses.
Although the position in the UK is changing rapidly, directors should think seriously about how they might mitigate the risks associated with the inevitable business disruption in the coming weeks and months.
What It Means For Businesses In the UK