UK company directors’ duties under threat of insolvency during the Covid-19 outbreak
Wednesday, 1st April 2020Guest blog from James Forsyth, Partner, TLT.
The profound business and market interruption already caused by the Covid-19 outbreak has introduced insolvency risks for many otherwise healthy businesses.
This guide summarises the key concerns for boards facing those risks – either directly, or within their customer and supplier networks.
We look at questions such as:
- Why is it important to know when a company is (or might be) insolvent and what should the board do next?
- How can directors ensure that they are acting in accordance with their duties?
- Can a company continue to trade if it is (or may be) insolvent?
- Does the suspension of the wrongful trading laws mean that directors can allow companies to continue to trade during the Covid-19 outbreak without any risk of personal liability or criticism?
- Do directors of companies providing ‘Essential Services’ for responding to the Covid-19 outbreak have new or different legal duties?
- Should all directors be taking advantage of any new funding being made available in response to Covid-19?
- The Government has ordered my business to close – what next?
For the latest legal insight into these issues and more, plus some practical advice on what to do now, please download our guide.