On 1 July, precisely six months after the UK left the European Union, the UK Government’s Chancellor of the Exchequer announced planned reforms designed to re-focus and modernise the UK’s financial services industry.
They say that the house always wins, but as the recent case of Andrew Green -v- Petfre (Gibraltar) Limited t/a Betfred illustrates, even the house can get caught out sometimes.
When lucky punter Andrew Green won over £1.7m following a 5 ½ hour stint on Betfred’s ‘Frankie Dettori’s Magic Seven Blackjack’ game in January 2018, he was dismayed to find out a few days later that the company was refusing to pay out, claiming that there was a glitch in the game, and that the house rules stated that, in those circumstances, Betfred were not required to pay. Mr Green sued, and the matter eventually ended up in Court. Following a hearing on 15 October 2020, Mrs Justice Foster DBE granted Mr Green summary judgment and awarded him his winnings.
By Sam Pearse
As previously reported (see here), the UK Government launched the Future Fund on 20 May, with the intention of providing financial support to British start-ups. It has proved to be popular, with over £320m of convertible loans to 322 businesses having been approved.
One of the criteria for accessing the Future Fund was that the applicant had to be a UK-incorporated company or a group with a UK ultimate holding company. The UK Treasury has now elected to expand the programme to include certain overseas companies.
It is not uncommon for British start-up businesses to incorporate outside of the UK, or put a non-UK holding company in place, in order to be eligible for local funding programmes. For example, European businesses may incorporate in the US in order to be more attractive to investors in the US and being able to participate in US accelerator programmes. After all, the US seed and venture capital market has much deeper pockets than its European equivalents.
In order to address this, the British Business Bank has announced the expansion of the Future Fund in order to:
Revised eligibility – overview
By Linda Crow
The new Corporate Insolvency and Governance Bill will introduce new provisions to protect a company from suppliers wishing to terminate supply contracts or invoking more draconian terms when the company is entering into certain insolvency procedures, a CVA, or a new restructuring plan or moratorium (as introduced by the Bill), (each an “Insolvency Procedure”).
The purpose behind the new provisions is to maximise the possibility of a company being rescued or being able to sell its business as a going concern by helping it to trade through an Insolvency Procedure.
Where a company (the customer) becomes subject to an Insolvency Procedure, the supplier will be prohibited from: Continue reading “UK Corporate Insolvency & Governance Bill: Termination Clauses & Temporary COVID-19 Relief”
By Linda Crow
Last week the UK government introduced the Corporate Insolvency and Governance Bill in Parliament.
The main objective of the Bill is to provide businesses with the flexibility and space needed to continue to trade during this difficult time caused by the COVID-19 pandemic. That said, the provisions around the new moratorium and the new restructuring plan proposal have been under consideration for a few years.
The Bill’s measures can be split into three categories:
- Those that provide greater flexibility, allowing companies protection from creditor action and safeguarding supplies whilst it explores options for rescue.
- Temporary suspension of parts of insolvency law to support directors continuing to trade during the crisis without threat of personal liability and to prevent aggressive creditor action.
- Temporary extension of certain times for filing documents at Companies House and temporary relaxation of strict compliance with constitutional requirements relating to corporate meetings (including AGMs).
The insolvency measures are: Continue reading “Prompted By COVID-19: The UK Government Introduces Corporate Insolvency & Governance Bill”
By Sam Pearse
On 20 April the United Kingdom’s Chancellor of the Exchequer announced that the UK Government would launch the Future Fund as part of the British Business Bank Coronavirus Business Interruption Loan Scheme. The Future Fund is intended to provide support to the UK’s innovative companies with good potential, for which we might read start-ups, growth companies or emerging companies. The Future Fund was launched on 20 May. This alert summarises the scheme, eligibility and the application process.
What financing is available?
We look at the key issues company boards should be aware of with regards to corporate governance and reporting in the midst of the COVID-19 crisis
The UK government and by extension the financial regulators have taken steps to show that they are cognisant of the fact that there will be a clear impact on UK companies’ ability to display the ‘normal’ forms of corporate governance and reporting in light of the COVID-19 disruption. While there is no suggestion that this period will be viewed as some kind of amnesty for poorly-governed businesses or for inappropriate reporting, the notion that there may be some flexibility in what is expected is beginning to filter through to company boards.
In order to seek to assist boards to focus on what the general expectations are of them at this time, the Financial Reporting Council have published a number of guidance reports.
Of particular note in relation to governance, the FRC have advised that boards carefully consider the following:
By Sam Pearse
- AGMS for UK-incorporated public limited companies can and should still go ahead during the lockdown.
- Companies should take advantage of any flexibility in their articles of association to hold meetings either virtually or partly in-person and partly virtually.
- Companies can still hold AGMs even if their articles of association have not been amended to take advantage of the flexibility available to them, however they should consider amending their articles of association for subsequent years.
- Shareholders will be able to vote using proxy forms but should expect to have less opportunity for Q&A.
The annual general meeting (AGM) season is upon us. English company law requires public limited companies (English private companies do not have to hold AGMs, and most dispensed with them once the Companies Act 2006 (CA 2006) came into force) to hold their AGMs to be held within six months of the financial year end. With most public companies closing their books on 31 December, that means that the bulk of the AGMs need to be concluded before 30 June with notices calling the meetings being sent out by early June.
By Sam Pearse
- The OECD and HMRC have issued guidance on the impact of Covid-19 on corporate residence and permanent establishment.
- Both have expressed sympathy and understanding, and intimated that the restrictions caused by Covid-19 will not have an impact on assessment.
The travel restrictions imposed as a result of trying to control the spread of Covid-19 present myriad issues for corporate groups. Two such problems are the impact on the corporate residence of a company and whether a permanent establishment in the UK could be unwittingly created.
Her Majesty’s Revenue and Customs (HMRC) and the Organisation for Economic Co-operation and Development (OECD) have published guidance setting out their views on the impact of travel restrictions.
Although the onus remains on company officers to comply with their filing duties notwithstanding the disruption caused by the COVID-19 crisis, Companies House have made a number of procedural changes to help keep their services running as smoothly as possible.
Below is a summary of the key service alterations adopted by Companies House:
Companies House – Offices
The London, Edinburgh and Belfast Companies House offices are currently closed to the public, with the London office also not receiving post. The Cardiff office remain open 24 hours a day for the receipt of documents.
All same-day services have been suspended until further notice.
Additionally, Companies House telephone contact centre is closed. All enquiries should be sent by email to firstname.lastname@example.org.