VIDEO: Managing your business’s funding – Directors’ responsibilities
Ward Hadaway in conversation with Begbies Traynor webinar was recorded on Tuesday 16th June.
The business spotlight is firmly on Directors. Difficult, sometimes drastic decisions need to be made in unprecedented times. But the consequences of those decisions have long shadows, and Directors need to consider their future position through the lens of their creditors, shareholders, funders, HMRC and even the courts.
In conversation with leading business rescue and recovery specialists, Begbies Traynor, we focused on the proactive approach Directors can take in these exceptionally challenging times. We discussed very practical advice about the quickest routes to funding, how to bolster cash flow, protecting the Board, and ultimately how to be proactive and in control of the process if you think there is no way back for your business as a result of the pandemic.
It is important to note that the changes to insolvency law currently before parliament only deal with wrongful trading – all other duties remain the same. So Directors must still ensure they are acting in the best interests of the company, its shareholders and creditors. In this context, the webinar discussed funding options for keeping a business solvent, and how to manage the process if this is not possible.
Ward Hadaway partner Emma Digby talked to fellow partner and insolvency specialist Jane Garvin and Kris Wigfield and Matthew Cluer from Begbies Traynor about these issues.
This webinar is the first of our Yorkshire “In conversations with…” where we explore with other experts how businesses can get on the front foot in #gettingbacktobusiness.
Related FAQs
Partners Damien Charlton and Jane Garvin look at the provisions of the Bill which impact on a supplier’s rights under a contract when their customer enters an insolvency procedure. They also outline other changes to insolvency procedures that the new law will introduce.
This webinar is part of a series designed for in-house lawyers. If you would like to register to receive invitations to future events for in-house legal counsel, please email damien.charlton@wardhadaway.com.
The Business and Planning Act 2020 entered the statute books on 22 July 2020. Section 18 of the Act includes provisions for the extension of the date by which a reserved matters application must be submitted where the original date falls between 23 March 2020 and 31 December 2020. Where the original time limit for the submission of reserved matters is on or after 19 August 2020, the relevant conditions will be automatically read as requiring the reserved matters application to be submitted by 1 May 2021.
Where the original time limit for the submission of reserved matters is before 19 August 2020, an application will need to be made to the LPA for an Additional Environmental Approval (“AEA”), which the LPA must determine within 28 days otherwise the approval is deemed to be provided. The purpose of the AEA is to consider whether the environmental assessments carried out at the time of the original outline determination remain valid and up to date, and where that is not the case, the AEA will be refused. In such circumstances a new planning application will be required where an application is now out of time to comply with the original date for submission of reserved matters.
The reporting requirements relating to cases of, or deaths from, COVID-19 under RIDDOR apply only to occupational exposure, that is, as a result of a person’s work.
You should only make a report under RIDDOR when one of the following circumstances applies:
- an accident or incident at work has, or could have, led to the release or escape of coronavirus (SARS-CoV-2). This must be reported as a dangerous occurrence
- a person at work (a worker) has been diagnosed as having COVID-19 attributed to an occupational exposure to coronavirus. This must be reported as a case of disease
- a worker dies as a result of occupational exposure to coronavirus. This must be reported as a work-related death due to exposure to a biological agent
You should speak to your advisors. We do not know presently how existing petitions will be dealt with by the Court. We do know that if any winding up order is made (based on a petition presented after 27 April), it could be found to be void and a creditor may face challenges. Even for petitions presented before 27th April, there is a risk that the Court will not be keen to make a winding up order so it is important that you look at the facts of your debt and weigh up all of the factors before deciding how to proceed.
- It is important to have a clear paper trail for any agreed reduction in salary, and hence any reduction in the amount of contributions. However, the contribution rates (as opposed to the amounts) should be the same as normal, and hence all processes and software should function as per normal and, amongst other things, remain compliant with auto-enrolment employer duties.
- However, if the period of affected contributions does not overlap precisely with the period of reduced salary, for example because of different cut-off dates, there may well be instances of non-compliance with auto-enrolment employer duties at the beginning as well as at the end of the period covered by the Coronavirus Job Retention Scheme.
- Accordingly, where an employer takes advantage of the Coronavirus Job Retention Scheme, good communication with the persons responsible for pensions administration and detailed record-keeping are essential to prevent non-compliances in the short-term and confusion in the long term.