Changes to enable struggling UK companies to avoid insolvency

posted by 3 months ago in Covid-19
Changes to enable struggling UK companies to avoid insolvency

In yesterday’s daily press conference, the Foreign Secretary Dominic Raab announced that more than 51,000 people have so far tested positive and sadly 5,373 have died. The rising figures combined with the announcement that Boris Johnson has been moved to intensive care are a powerful reminder of why the country is currently on lockdown, with many businesses across the country closed. With businesses and their employees looking for ways through this national emergency, we take a look at the latest business news.

Changes to enable UK companies to continue trading

The Business Secretary has announced changes which will enable UK businesses to continue trading, when they are undergoing a rescue or restructuring process. The aim is to provide companies with the breathing space they need to avoid insolvency, while also enabling some to continue providing essential services and supplies.

The government has also temporarily suspended wrongful trading provisions for three months, to allow company directors to keep their business open without the threat of personal liability. Previously, insolvency rules stipulated that directors of limited liability companies could become personally liable if the business continued to trade after becoming uncertain about being able to repay debts.

Matthew Fell, the Chief UK Policy Director at the Confederation of British Industry supports the announcement and describes how the measures will give much needed headroom to many company directors. It is hoped that these measures when combined with other elements of the government’s support package will enable businesses which would otherwise be viable to weather the crisis.

Greater flexibilities for Annual General Meetings (AGMs)

The government has introduced legislation to assist companies which are legally required to hold Annual General Meetings (AGMs). The new legislation aims to meet the restrictions on movement and gatherings, so required meetings can be conducted safely while addressing the spread of coronavirus. These measures will enable companies to temporarily postpone their AGM or to hold their meeting online. This news follows the earlier announcement that businesses will automatically be granted a three-month extension on their accounts filing.

Use of face masks in the workplace

There have been many businesses querying whether face masks should be worn in the workplace, however the current government PPE guidance states that masks are only required within care settings. Instead, Public Health England recommends that any businesses which are open should optimise their workspaces to enable social distancing wherever possible.

In addition, it is important that businesses display clear signs around the workplace reminding people to wash their hands and avoid touching their eyes, mouth and nose. Employees should be provided with hand sanitiser and they should be able to take regular breaks to wash their hands. All employees should regularly be reminded not to attend work if they are suffering from a cold or fever.

Can your business offer coronavirus support?

The government is looking for businesses which may be able to offer coronavirus support in multiple areas. There are many ways your business can help, such as testing medical equipment, manufacturing PPE, providing hotel rooms, aiding with transport, providing expertise and even offering childcare to essential workers. There is a useful tool available on the government website, which will ask questions about the type of support you can offer. If your services are required, the government will be in contact with further information.

There have been many stories of companies offering their services already, including BrewDog and Ineos, which have been manufacturing hand sanitiser. As the government relaxes rules and fast tracks many applications, the availability of many PPE essentials is increasing thanks to UK wide business support.

Here at BusinessComparison our aim is to help businesses across the country, through our innovative comparison services. Whether you need to increase your cash flow with a competitive loan, business bank account or invoice finance, or reduce outgoings with cheaper insurance or energy, we can help you find the ideal option. To find out more about our services, please contact our team today.