Many businesses were already stumbling and facing challenges before the coronavirus crisis manifested itself, particularly as Brexit had created problems for a number of organisations, particularly those doing business across Europe. Everyone agrees that the coronavirus pandemic is a disaster never before encountered. The human cost is an incalculable tragedy. The cost to the world economy is, at present, also incalculable.

Whilst the government has thrown unprecedented lifelines to UK business, in the form of grants, loans and temporarily waiving or postponing a variety of tax payments, it has to be recognised that in the present critical times all business leaders will have to draw on every part of the knowledge, skill and expertise that they possess to successfully navigate through the current crisis. Legal Law Limited’s commercial lawyers across all our offices are especially capable when advising companies regarding the streamlining of a business to maintain a viable structure, which is never been more important than during the present crisis. Organisations need cool heads and to be fast on their feet – shelve expansion plans and take rapid action to protect their supply chains in order to have a chance of surviving.

The Chief UK Policy director of the Confederation of British Industry (CBI) commented on the assistance the government has provided by its reforms to insolvency law saying, “The CBI welcomes these interventions at a critical time for business. The temporary suspension of wrongful trading provisions, along with other measures, will give much needed headroom for company directors to enable otherwise viable businesses to use the government’s support package and weather this crisis”.

The Business Secretary also announced last week that the government will introduce legislation to ensure those companies required by law to hold Annual General Meetings (AGMs) will be able to do so safely and consistently within the parameters of the restrictions introduced with regard to gatherings and movement now that the ability to travel is subject to controls. This will probably mean that AGMs will be held online or postponed until the immediate threat of the transmission of coronavirus has passed.

The announcement of the immediate automatic granting of permission to delay the filing of accounts by three months on application has been taken up by over 10,000 businesses so far.

Contravention of the wrongful trading rules, which in many cases, would be hard to avoid given the speed that the coronavirus pandemic and its shocking effect has overtaken the world. The government decision in this regard is the correct one to enable businesses, which through no fault of the directors or their business practices, find themselves in a difficult and compromised position. Jonathan Geldart, the director-general of the Institute of Directors (IoD) stated “We’re calling on the government to prioritise jobs and business survival by relaxing existing insolvency obligations put on directors and thereby providing business leaders greater room for manoeuvre at this critical juncture,” he further commented. “We should not allow a single viable business to go to the wall because of this crisis.” The Federation of Small Businesses’ director of external affairs hit the nail on the head when he commented “these are not normal times”.