Now that HMRC has become a preferential creditor for certain debts, other creditors – such as suppliers – could lose out.
Under the Finance Act 2020, from 1 December 2020, HMRC became a preferential creditor in insolvency proceedings. This may have significant impact on what’s left for other creditors.
Life has a habit of testing us, personally and in business. In challenging circumstances, corporate insolvency can threaten even the strongest businesses, large or small.
Here are some tips to help you minimise the threat of insolvency.
The Corporate Insolvency and Governance Act (CIGA) came into force on 26 June 2020, introducing significant reforms intended to provide breathing space for companies during the coronavirus pandemic.
These measures may be a welcome relief to some struggling companies. However, they could prove problematic for suppliers, who will need to tread especially carefully when dealing with distressed or insolvent companies.
What has CIGA changed?
A new funding round could be a good time to sort out capital complexity. We take a high level view.
Many privately backed companies go through several financing rounds and find they end up with a very complex capitalisation structure, with various classes of preferred shares, ordinary shares and deferred shares, not to mention employee incentives and debt instruments. A new funding round is a good opportunity to restructure and simplify this legacy.
The draft Banking Business (Amendment No. 8) (Jersey) Law 201- has been adopted by the States of Jersey and is awaiting the approval of the Privy Council. The draft Law will amend the Banking Business (Jersey) Law 1991 to provide for offences and impose duties under the Depositors Compensation Scheme.
Introduction
In finance transactions, security over Guernsey situs assets is usually taken by way of security agreement under the Security Interests (Guernsey) Law, 1993, as amended (the "Law").
The States of Guernsey has announced the recommendations from the consultation carried out on proposed changes to the Companies (Guernsey) Law 2008. This coincides with a judgment from the Royal Court highlighting the timely nature of proposed changes.
The 2008 Law was the result of a wholesale revision and consolidation of the corporate legal framework. Whilst its focus was on corporate law it also encompassed the insolvency regime in Guernsey. The consultation exercise was to determine what, if any, changes may be required now that the 2008 Law had been in place for some time.
This Briefing addresses the usual manner in which solvent voluntary liquidations proceed. The discussion is subject to the particular provisions of the Memorandum and Articles of Association of any company seeking a voluntary liquidation.
Where a company is not a regulated entity, has no liabilities and is able to pay its debts as they come due, a voluntary winding up and dissolution may be commenced by a resolution of directors.
Where it is proposed to appoint a voluntary liquidator, the directors of the company shall:
Introduction
With the continuing development of sophisticated cross-border financial transactions, certain contractual practices have evolved and, with the passage of time, become recognised as standard in the relevant marketplace. Financial centres such as Jersey monitor such developments with a view to implementing policy and/or legislation as may be required or desirable to maintain and enhance the reputation of Jersey as a jurisdiction of choice for such cross-border transactions.