New law aims to close loophole on company dissolution
New law aims to close loophole on company dissolution The government is set to introduce new rules preventing company directors from avoiding personal liability for their unlawful conduct. A loophole currently exists that allows company directors to prevent an investigation into their actions by informally striking off their own company. The so-called dissolution loophole prevents the Insolvency Service from conducting enquiries as only live companies or those in a formal insolvency process can currently be investigated for fraudulent
A guide to winding-up proceedings: How does the process work?
A guide to winding-up proceedings: How does the process work? A winding-up petition allows a company’s creditors to attempt to recover money owed to them by having the company’s assets sold, with the proceeds used to pay outstanding debts. It is a serious step and should only be undertaken as a last resort. A winding-up petition is one of the most severe actions that can be taken against a company by one of its creditors. It will potentially
The government consultation: Commercial property and rent arrears through the pandemic
The government consultation: Commercial property and rent arrears through the pandemic As legal restrictions on the recovery of commercial rent arrears continue, the government has launched a consultation on whether to extend, remove or replace the measures. During the pandemic, emergency legislation was put into place to protect commercial tenants who were struggling to survive because of lockdowns and downturns in their businesses. While this has undoubtedly protected tenants, it has left landlords in a difficult position. Covid-19
The 4 ways to legally terminate a contract: breach of contract, performance and agreement
The 4 ways to legally terminate a contract: breach of contract, performance and agreement Disruption is common in the business world, with unforeseen events or difficulties meaning that contracts sometimes cease to be beneficial or even possible. We take a look at various ways in which a contract can possibly be legally terminated. If you have entered into a contract that you later wish to terminate, it is important to follow the correct procedure. Failure to do this
What are the strategies for preventing shareholder disputes?
Strategies for preventing shareholder disputes Shareholder disputes can be disruptive to a company, diverting management attention from the business and potentially damaging its reputation. Putting the right framework in place to avoid disputes will not only help prevent shareholders from being disgruntled but can also make a company a more attractive proposition should it ever want to seek investment or new ownership. Shareholder agreement The most effective way of avoiding disagreement is by putting a strong shareholder agreement
What are the different types of misrepresentation?
What are the different types of misrepresentation? When entering into a business contract, a variety of statements are usually made setting out the details and background of the deal. If someone enters into a contract in reliance on a statement that later turns out to be untrue, this is misrepresentation. The false statement does not need to be in a formal written document, it can be information given in a conversation, meeting or sales pitch. If misrepresentation can
HMRC preferential status and the impact on personal guarantees
HMRC preferential status and the impact on personal guarantees The government’s reinstatement of HM Revenue & Customs (HMRC) to the position of a secondary preferential creditor in insolvent liquidations comes at a time when many businesses are being squeezed and cash flow is poor. Lenders may be more inclined to seek personal guarantees before releasing new funding, which could have the effect of slowing or stopping growth as directors hesitate to risk personal assets. Those creditors holding personal
Wrongful or insolvent trading: Can company directors be personally liable?
Wrongful or insolvent trading: Can directors be personally liable? Wrongful trading occurs when company directors continue to trade past the point when they knew or should have known that there was no reasonable prospect of avoiding insolvent liquidation and in addition they did not attempt to minimise potential loss to the company’s creditors at every step. It is an offence under section 214 of the Insolvency Act 1986, with the possibility of directors being made personally liable for