Coronavirus - COVID-19 - Director FAQs

The COVID-19 pandemic has wreaked havoc on businesses around the world. Directors of UK companies need to be aware of what this means for them and what action they can take now.

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Dominic Offord, Partner

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Gillian White, Partner

The ongoing Coronavirus crisis is having an impact on almost every aspect of the director's role. From the mundane, such as signing documents and meeting with other board members, to critical monitoring and decision-making around the company's operations, staffing and financial position.

We've set out the 5 key topics for consideration. Click the links below for our practical answers to the most frequently asked questions.

Government guidance
For the latest Government guidance, refer to the following resources for:
Latest government advice on coronavirus as a whole
Details of government support available for business
Updates on how Companies House is providing services to business

Facing the immediate cash flow crisis

These FAQs look at the impact of a sudden precipitous drop in trading – how the resulting cash flow hit may affect the directors' duties, what they need to be concerned about, and what possible steps they can take to address this.

Managing your business through the storm

These FAQs look at how matters which were previously routine – signing documents, holding meetings, filing accounts, considering dividend payments – are affected now that the country is in lockdown, travel is nigh-on impossible and face-to-face contact severely curtailed.

Preparing for the recovery

How businesses plan and prepare for the eventual return of demand for goods and services is as important as how they deal with the current crisis. What working capital will be available to meet orders? How quickly can it redeploy its workforce and re-establish supply chains? Post-COVID-19 will the business model be transformed? Whether through traditional rescue and restructuring processes, new Government measures to support business rescue or simply taking prudent management decisions, our FAQ's will look at measures to ensure that a business can roar back to life.

Disrupted and frustrated contracts

Contractual relationships are in the spotlight given the disruption caused by the virus and the governmental restrictions in place. Parties are finding themselves unable or unwilling to perform. Understanding your rights and obligations is key to finding a way forward and avoiding disputes. There are some key clauses to look out for and certain legal principles that are likely to come into play.

Three people working. One person pointing at a document.

Renegotiating and varying agreements

There will be times when speaking directly to other contractual parties will be the best approach. It may be possible to agree a mutually acceptable way forward. There are some important considerations to bear in mind when negotiating postponements and other variations.

Restructuring and Insolvency - what you need to know

On 20 May 2020, the Government presented the Corporate Insolvency and Governance Bill (the "Bill") to Parliament. The Bill sets out the Government's proposed temporary measures in response to the COVID-19 pandemic, as well as long-planned – and permanent – reforms to insolvency and company law to facilitate the rescue of financially distressed businesses.