Corporate Update - April 2020

Will sellers lose more than their liberty as result of Covid-19?

Coronavirus has already wreaked havoc on the UK’s economy in the space of just a few weeks. The FTSE 100 has plunged by more than 26% since February and businesses in a range of sectors are likely to see a significant downturn this year. - Read more

How will M&A buyers respond to Covid-19?

Coronavirus has already caused widespread economic carnage in the UK and the fall-out is likely to raise serious problems for buyers who have recently acquired a business and for those still actively considering acquisition opportunities. - Read more

Effect of Coronavirus on financial reporting

The Financial Reporting Council (FRC) has published fresh guidance on issues arising from the Covid-19 pandemic. - Read more

Social distancing and the use of electronic signatures

With vast numbers of people now working from home due to COVID-19 restrictions, finding more convenient methods of making binding transactions which are recorded in writing has become a priority. - Read more

Reviewing your existing financing arrangements in light of COVID-19: FAQs

Many of our clients are concerned about the effect of the current economic climate on the financial health of their businesses. We recommend that companies should consider reviewing their existing financing documents to identify any risks of potential defaults occurring and to decide how best to proceed. We have put together the following guide to help answer the most frequently asked questions we receive on this topic. - Read more

Financial support for SMEs: The Coronavirus Business Interruption Loan Scheme (CBILS)

Government-backed loans of up to £5 million to small and medium businesses. - Read more

Government announces the new Coronavirus Large Business Interruption Loan Scheme (CLBILS)

On 3 April 2020, the Government announced a new loan scheme to provide support for large businesses. - Read more

Financial support for larger firms: The COVID-19 Corporate Financing Facility

The COVID-19 Corporate Financing Facility (CCFF) is a quick and cost-effective way to raise working capital for those large businesses which need it. - Read more

Corporate solvency – matters to consider in light of COVID-19: FAQs

The UK Government has announced a number of changes to the UK insolvency framework in light of the economic storm caused by the COVID-19 pandemic. - Read more

Covid-19 – what it means for EMI options

You may wonder what the current Covid-19 crisis has to do with EMI options but in fact there are a number of potential consequences. - Read more

Counting the cost of the Coronavirus

The economic effects are rippling across the globe. It is interrupting supply lines and businesses are repatriating staff and/or restricting travel. Against this background, contractual obligations are not being met. But can a contracting party avoid performance - citing the virus - without risking a claim? If not, on what basis might a claim be defended?

Assuming the contract is governed by English law, the general position is that a non-performing party will be in breach of contract. The counterparty will then be entitled to claim damages to compensate them. To avoid liability two options may be worth considering: reliance on a force majeure clause and the doctrine of frustration. - Read more

Budget 2020 - New Kid on the Block

There was a sombre mood to the Budget initially, focusing as it did on measures to help deal with the coronavirus / Covid-19. Clearly the financial outlook is expected to be challenging, and our new Chancellor, Rishi Sunak, made sure to point out that the Office for Budget Responsibility forecasts have not (yet) taken the impact of Covid-19 into account. The House of Commons displayed a brief and begrudging unity in response to the issue. As the speech got more politically confrontational though, the house was soon back to its rambunctious and raucous routines. 

Other than a drastic and immediate reduction in the benefit offered by Entrepreneur’s Relief (renamed “business asset disposal relief"), most notable in the speech were all the spending announcements – not just on Covid-19 but on infrastructure and research and development. Among those headline-grabbing announcements, the tax changes were a little bit more low-key and predictable. So low-key in fact that everyone’s wondering where his money tree is. Nonetheless, here’s a selection of some of the key tax changes for businesses and entrepreneurs. - Read more

Restrictive covenants: key reminders recently highlighted by the Court of Appeal

In the recent case of Guest Services Worldwide Limited v David Shelmerdine the Court of Appeal found that a non-compete clause, restricting Mr Shelmerdine for a period of 12 months after he ceased to hold shares, was binding. The clause prohibited Mr Shelmerdine, a shareholder who was also a consultant of Guest Services Worldwide Limited (GSW), from being interested in competing businesses. - Read more

Types of directors: myths and common pitfalls

In this article we answer some of the most common questions and address frequent pitfalls in the often-confusing realm of company directors. - Read more

Terminating contracts: breaking up is never easy...

The UK has now left the EU. However, it remains unclear how our departure will unfold. In the face of uncertainty, prudent businesses are assessing contracts, their cost base and their exposure to currency fluctuations. As part of such a review, the well-prepared need to develop exit strategies where arrangements have become, or will become, unprofitable. - Read more

Court of Appeal refuses to depart from "natural and ordinary" meaning of commercial indemnity clause

The Court of Appeal has considered the construction of an indemnity clause in a deed of trust holding that the words used should be given their natural and ordinary meaning. The case highlights the importance of clear and careful drafting as the courts will not readily rescue parties from the effects of the words used even where this means an unexpected advantage for a party. - Read more

Visit some of our Passle posts here

Wrongful Trading claims suspended - Read more

IR35 reforms to be postponed due to Coronavirus - Read more
 
My contracts are affected by coronavirus - what should I do? - Read more
 
UK the number one choice for agency acquirers despite Brexit - Read more