The unprecedented global pandemic caused by the spread of Coronavirus (“COVID-19”) has naturally resulted in worrying and uncertain times personally, professionally and economically.
It has been well documented that the global increase of COVID-19 cases has undoubtedly rocked the economic market with trading and production plummeting, interest rates being slashed as well as bringing uncertain times ahead for the aviation industry, the high street, self-employed traders and small businesses. The FTSE 100 has dropped to its lowest levels in eight years bringing widespread concern that a global recession could be on the horizon.
Whilst ensuring strict adherence to Government advice and taking a sensible, common sense approach to our health and others around us, it is important to keep a ‘business as usual’ attitude where possible. Whilst businesses will undoubtedly be focussing on immediate and short term business continuity steps and planning, directors must also remain mindful of their continuing professional obligations and their statutory duties particularly in safeguarding the business in the longer term.
Section 172 Companies Act 2006 requires directors, in their duty to promote the success of the company, to consider (amongst other factors) the long term impact of decision making on the business and the interests of employees. Consequently, directors must ensure their business decisions take account of and are updated regularly with current Government advice and anticipate, in these unprecedented times, that it will change, sometimes rapidly. It is important for directors to consider taking measures to mitigate the effects, where possible and thus safeguard employees, prevent further prejudice to creditors and ultimately try to preserve the business in the short term which should hopefully help protect the business in the longer term.
If you are concerned with the impact that COVID-19 may have on your business or you require advice on your statutory duties during this unsettling time, please get in touch with our dedicated Business Support and Insolvency team who would be able to assist.
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