COVID-19 Advice Series: Key steps for business owners
The Covid-19 outbreak has caused a lot of uncertainty for many people and is having a huge effect on businesses, small and large across the United Kingdom. As with much of the general health advice surrounding Covid-19, business owners should focus on matters that are within their control to ensure continuity throughout their business.
Consider putting a Shareholder or Partnership Agreement in place if you don’t already. In times of uncertainty with tensions running high between shareholders, directors or partners (depending on your corporate structure) a shareholder or partnership agreement can bring a level of certainty to your business. An agreement of this nature sets out the terms in which you all agree to run your business, avoiding any disputes as to who can make decisions in relation to expenditure and if and when dividends can be called when the company may need to focus on reserving it’s cashflow. In short, a shareholder / partnership agreement can reduce the risk of any one shareholder or partner making decisions that should be decided unanimously.
Consider your realistic options in relation to cashflow. Speak to your lenders and creditors about the possibility of payment holidays. You may also be entitled to government grants. The government have announced on 17th March 2020 that businesses in retail, hospitality and leisure sectors who do not have pandemic cover under their insurance will not need to pay business rates this year (provided they have a rateable value of less than £51,000) and could be entitled to a grant of up to £25,000.
Another option to consider is whether a director, shareholder or partner within the business is in the position personally to provide a cash injection and support the Company financially through this uncertain period by way of a director, shareholder or partner’s loan. It is important that a loan of this nature is correctly documented to avoid any ambiguity for any repayment terms.
The above are only some of the measures you can think about to help maintain business continuity. For more information about protecting your business throughout this challenging time please get in touch with our corporate commercial team by emailing either firstname.lastname@example.org or email@example.com who will be more than happy to discuss all options available to you.