FAQs for Employers

Katie Pearson shares some answers to frequently asked questions and useful links for employers in light of the current Coronavirus outbreak, including:

Reducing the risk to your employees
What do do if an employees is in quarantine, but not sick
Changes to Statutory Sick Pay (SSP)

COVID Cashflow - Time is of the Essence

In these uncertain and unprecedented times, the importance of protecting your business has never been greater. With social distancing slowing down production and trade, we are all having to think more creatively to adapt and ensure the personal safety of our families, colleagues and employees.

The reality is that this adjustment is going to undoubtedly affect the cashflow of most, if not all, businesses. This means that both recovering and paying debts is going to be more difficult, but doing both will be essential for survival. Jennifer McNichol gives some practical advice.

Transfer Documents, Companies House Filing Changes

HMRC recently announced yesterday that due to the COVID-19 pandemic they have temporarily amended procedures for processing Stock Transfer Forms and other transfer documents, such as the Form SH03 used in share buy-backs.

Ross McGregor discusses how e-signatures and electronic formats are helping businesses to process transfer documents and Companies House filings

New FCA Measures for Customers Struggling with Repayments

New measures introduced to provide temporary financial support to customers being hit by the effects of coronaviruss are due to come into force on Thursday 9 April if approved.

If the temporary measures are brought in, they will not automatically be applied to you – you must ask your lender for assistance and continue making any repayments in the meantime.

Emergency Changes to UK Insolvency Rules

Viable companies are experiencing unprecedented financial difficulties as a result of the continuing outbreak of COVID-19. Following a number of government announcements over the past few weeks concerning measures to support businesses affected by the outbreak and resulting lockdown, on 28 March 2020, Business Secretary Alok Sharma announced emergency changes to the UK-wide insolvency regime to alleviate pressures on companies and directors, in a bid to support companies to “weather the storm”.

Coronavirus (Scotland) Act 2020

Emergency measures have been put in place to protect tenants from having their commercial leases terminated as a result of late payment of rent.

Currently, in Scotland landlords must give tenants written notice before terminating a commercial lease for non-payment of rent or other sums due.

Convertible Loan Deals – About to make a comeback?

Prior to and during the Global Financial Crisis, convertible loan notes (CLNs) were frequently used by investors to de-risk their investments in high-growth and high-risk businesses.

Following that crisis, CLNs lost their appeal for various reasons as the market shifted toward traditional equity fundraising models, alongside venture debt for leverage. In past 12-24 months, CLNs have been quietly been making a comeback and given Covid19 and the government’s recently announced CLN co-investment scheme to cope with the Covid19 crisis, we think CLNs will become in vogue once more.

Digital Deals – How to sign documents without leaving your house

While the UK may be in lockdown, that does not mean that life cannot continue and the business world must stop, if anything it is even more important now that we continue to press on with business transactions and embrace technology to help us do this.

How to Raise Equity Investment During an Economic Crisis

Having spoken with investors and entrepreneurs, many say that in a crisis, you see the best and worst of behaviour from VCs. Whilst the strong message from many is that VCs are still open for business, in the last few weeks we’ve seen term sheets being pulled at the last moment and deals stall at a relatively advanced stage. Starting a deal from scratch right now is undoubtedly more of a challenge but for some, it will be unavoidable in order to survive.

What help is available to employers affected by Covid-19

On Friday 20 March 2020 the government announced the introduction of a temporary scheme, the Coronavirus Job Retention Scheme, to support employers whose businesses have been severely affected by coronavirus. The scheme will be open to all UK employers for at least four months starting from 1 March 2020. Employers are able to use a HMRC portal (open as of 20 April) to claim 80% of furloughed employees’ (employees on a leave of absence) usual monthly wage costs, up to £2500 a month, plus (not including) the associated employer national insurance contributions and minimum automatic enrolment employer pension contributions on that wage.

Future Fund Updates

A month or so ago, I published my thoughts on the Future Fund. Following a period of deliberation and degree of criticism of the scheme from various segments of the funding community, the key documentation has now been published. It is this documentation that companies and investors will have to sign up to in order to obtain the matched-funding from the Future Fund.

Frustrating Times: Coronavirus and Commercial Contracts

Interruptions in supply chains, delays, travel disruptions and threats to the labour force are commonplace right now.

In this blog, Danielle Prado discusses contractual rights and obligations of businesses and their clients, customers, suppliers and other third parties. Arcane legal terms such as “force majeure”, “frustration of purpose” and “time is of the essence” are becoming more commonplace. What do these terms mean and what are their implications?

EMI Options

Alexander Lamley discusses the impacts of the pandemic on EMI Options.

Firstly, Alex discusses the how employees who have been awarded grants of EMI options should be careful to continue to comply with the working time requirements in order to ensure continued EMI tax treatment.

Secondly, he explains the impacts of furlough status on EMI Option grant holders.

Conveyancing and Security Transactions

The Property Law Committee of the Law Society of Scotland is strongly recommending that parties to conveyancing and security transactions should attempt to reschedule settlements rather than settling during the closure of the Application Record.

The obvious risk of settling a transaction during the Application Record closure is that, following settlement, the Disposition in favour of the purchaser, and any Standard Security in favour of a lender, will not be capable of registration until such time as the Application Record reopens.

Online Fraud - When there's blame to go around

With the lockdown in full force, the transfer of money electronically has never been so prevalent and, indeed, so necessary. However, that means that there is more opportunity than ever for the unscrupulous fraudster to intercept this money and prevent it from ever reaching its intended recipient! In this post, we discuss where the buck stops when a fraudster intercepts a transaction where professionals are involved and who should pick up the bill when it all goes wrong.

Doing Business in the US during the COVID-19 Pandemic

The legal ramifications of the current Covid-19 pandemic are complex on an international level in this constantly changing landscape. The US Congress as well as US State legislatures and local governments have been moving swiftly in recent weeks to address the pandemic and provide support to businesses and individuals. Different approaches are being taken by some States and even at the city and local municipality level varying laws may apply.

What Help is Available to Employers Affected by Covid-19?

On Friday 20 March 2020 the government announced the introduction of a temporary scheme, the Coronavirus Job Retention Scheme, to support employers whose businesses have been severely affected by coronavirus. The scheme will be open to all UK employers for at least four months starting from 1 March 2020.

Personal guarantees and the COVID-19 Business Interruption Loans Scheme (CBILS)

The new COVID-19 Business Interruption Loans (CBIL) scheme can provide facilities of up to £50 million to small businesses who are struggling financially as a result of the COVID-19 pandemic. It is also available for start-up businesses. The scheme went live on 23 March 2020 and will run until September 2020, allowing applications for term loans, overdrafts, asset finance and invoice finance.

Survival of the Happiest

How ESOPs might give your company the lead on surviving the Pandemic

Employee Share Option Plans (ESOPs) can be a fantastically useful tool in the toolbox of founders and investors alike. Whether used to incentivise employees or management, they provide a way to provide an opportunity to take part in a future capital windfall. This can be especially useful as a trade off against a lower salary or a way to secure and fill roles such as non-executive chairman if not simply to show how much the company appreciates the contributions of staff.

Post Lockdown: Slowly Returning to Normality

Whilst it appears almost certain that the UK wide lockdown shall be extended into early Summer and possibly longer, it is worthwhile putting some thought into how, precisely, businesses should most effectively return to their offices post lockdown

The Self-Employment Income Support Scheme - FAQs

The SEISS was announced by Chancellor Rishi Sunak on 26 March 2020. The Government has since published further guidance on what the scheme will provide, who is eligible and how to claim.

The scheme provides financial assistance to self-employed workers and members of partnerships who carry on a trade which has been adversely affected by the COVID-19 pandemic.

Future Fund – What companies and investors need to know

I knew the Future Fund would be popular but if the unconfirmed press reports are to be believed, on the first day alone somewhere in the region of £450m in matched funding was applied for meaning that £900m of funding for new businesses has been pledged.

Although I fully expect the pot to be increased due to demand, remember we have been told only £250m is in the pot on day 1……in theory at least, there isn’t enough money to go round.

FAQs for Companies & Directors

Our Corporate Team have been fielding various questions from companies and directors being impacted by the Coronavirus.

- How to sign documents if you can't meet face-to-face.

- Are electronic signatures valid?

Caveats: Protecting you and your business against the unexpected

With so many customers and workers currently staying home, some businesses will be facing an increased risk of insolvency.

You may be caught unawares should legal proceedings be raised against you or your business. Putting caveats into place can help bring peace of mind.

Top Tips: Dealing with your Bank

With many businesses facing concern and uncertainty over cashflow in the coming months, reliance on finance from banks is going to be crucial for survival for many SME.

MBM Commercial’s Dispute Resolution team have a long history of acting against large institutional lenders in matters relating to bank’s actions amid the 2008 recession, and remain the only firm ranked in Chambers for Banking Litigation in Scotland on the borrower side.

Coronavirus Business Interruption Loan Scheme (CBILS) – A lifeline thrown too late?

CBILS is a new scheme that can provide facilities of up to £5m for smaller businesses across the UK who are experiencing lost or deferred revenues, leading to disruptions to their cashflow as a result of Covid-19. CBILS is intended to support a wide range of business finance products, including term loans, overdrafts, invoice finance and asset finance facilities.

Managing your Business Relationship with your Bank During the Pandemic: Loan to Value Covenants

In any economic downturn banks will look very closely at their customers’ performances and in particular their customers’ loan covenants. Against this backdrop, banks will be looking closely at their customers’ performance, and in particular at the loan to value or “LTV” covenant.

U.S. Ban on Immigration: How Far Does It Go?

On Monday evening (20 April), President Trump announced on Twitter that “In light of the attack from the Invisible Enemy, as well as the need to protect the jobs of our GREAT American Citizens, I will be signing an Executive Order to temporarily suspend immigration into the United States!” Last night, the text of the “Proclamation Suspending Entry of Immigrants Who Present Risk to the U.S. Labor Market During the Economic Recovery Following the COVID-19 Outbreak” was published..

Silver Linings

One of the few silver-linings of the current Covid 19 crisis has, without doubt, been the willingness of people to help. We should perhaps expect nothing less from our entrepreneurial client base but it has been particularly motivating and inspiring to see so many clients respond to the challenges of this unprecedented crisis.

Negotiating an Investment Term Sheet

In the current challenging times, many businesses will want to close investment rounds quickly and efficiently so that they can get back to building the business. With that in mind, below are our top tips to successfully negotiate an investor term sheet.

Landlords and Tenants – It’s good to talk!

All of a sudden, many tenants are struggling with cashflow difficulties as a result of the Coronavirus. Most tenants either don’t require their premises or are unable to use them due to enforced shutdown on the grounds of public health.

Over the last few weeks we have seen wholesale closures of shops, offices and other facilities with a growing number of tenants unable to afford to continue with rental payments.

New Protections for Commercial Tenants in the Coronavirus Outbreak

In response to the dramatic reduction in cashflow for most small businesses, commercial tenants in Scotland are now benefiting from additional protection from eviction on the grounds of non-payment of rent amidst the COVID-19 pandemic.

The Coronavirus (Scotland) Act 2020 became law on 6 April 2020. As part of government measures to protect small businesses, this Act has brought in an extension on the period of notice for termination of a lease as a result of non-payment of rent.

Scottish Initiatives During the Pandemic

The Scottish Government have also rolled out Scottish-specific initiatives to help support business during these challenging times, more details of which can be found at www.findbusinesssupport.gov.scot.

Two of the funds set up to support businesses in May were:

Pivotal Enterprise Resilience Fund (“PERF”) – a support fund for viable but vulnerable SMEs in Scotland.
Creative, Tourism and Hospitality Enterprises Hardship Fund (“CTHEHF”) – aimed at small and micro creative, tourism and hospitality companies not in receipt of business rates relief.